Editor’s Note: Chris Edwards is the director of tax policy studies at the Cato Institute, a libertarian think tank, and editor of www.DownsizingGovernment.org. The opinions expressed in this commentary are solely those of the author.
Chris Edwards: There is no magic money tree in Washington; states and private sector should pick up slack for cuts in Trump's proposed budget
But, he says, Trump's defense-spending boost doesn't help US save money: entitlement programs hold real key
Still, Edwards says, budget a good first step
When President Donald Trump released his first budget this week proposing to cut a range of agencies and programs, he declared, in an accompanying message “our budget blueprint insists on $54 billion in reductions to non-defense programs.” He said: “We are going to do more with less, and make the government lean and accountable to the people.”
Many of Trump’s proposals will not be greeted warmly on Capitol Hill. And, to be sure the $54 billion in non-defense cuts he put forth are matched by $54 billion in defense spending increases. So that focus on “lean” does not extend to the Pentagon, and there is no overall spending reduction to help get rising deficits under control.
What’s more, members of both parties defend subsidy programs that aid their states. Still, the broad sweep of Trump’s proposals gives him a strong starting position in budget negotiations. Since he dishes out the pain widely, his cuts will be perceived as being fair, as least by Republican voters.
And for fiscal conservatives there is indeed good news here.
The administration targets aid for state and local governments, for example, terminating Community Development Block Grants and the Economic Development Administration, which both provide subsidies for local business activities. It would cut numerous k-12 school programs that the administration says are ineffective. And it would cut various family aid programs, such as Home Energy Assistance and Weatherization Assistance for low-income families.
Liberals and lobby groups will complain that those are crucial programs. But if they are, then state governments should step in and fund the programs themselves. After all, the funding for federal aid ultimately comes from taxpayers who live in the 50 states — there is no magic money tree in Washington.
Indeed, it is more efficient for the states to fund their own local activities — such as school and antipoverty programs — because doing so eliminates the expensive federal middleman. By ending numerous federal aid programs, the Trump budget would cut the need for high-paid bureaucrats in Washington to administer the money going back to the states. It would also free the states from costly federal regulations that are tied to aid programs.
The Trump budget targets transportation for cuts. It would end the Essential Air Service program, which, as documented in a recent CBS News report, subsidizes half-empty flights to little-used airports. It would cut subsidies for Amtrak’s long distance trains, which a careful look at Amtrak’s own unaudited performance reports show are also half empty. And it would privatize the air traffic control system.
The common thread is that transportation funding would be shifted from taxpayers to the users of services. Thus, the budget would cut Amtrak’s most subsidized routes to improve the self-sufficiency of the overall system. As for the essential air service program, which provides air transportation to communities considered “underserved,” businesses and local governments should pay for the flights if they are so “essential.”
The Trump proposal for air traffic control is modeled on successful Canadian reforms. The idea is to move the system to a nonprofit organization that would be funded by charges on airlines. Using that structure, the Canadian air traffic control system is leading the way on efficiency and innovation, while our bureaucratic system is plagued by mismanagement and flight delays.
The Trump budget would cut energy subsidies, job training, and handouts to rural businesses. It would also cut subsidies to cultural organizations, including the National Endowment for the Arts, the National Endowment for the Humanities, and the Corporation for Public Broadcasting. These should all be funded privately by individuals, businesses, and charities.
It is true that Trump’s budget ax avoids blows to the large entitlement programs, including Social Security and Medicare. And those programs are the biggest threats to the nation’s fiscal health; they will have to be tackled sooner or later. However, the Trump plan is an improvement over the budget policies of the last Republican president. George W. Bush pushed for large increases in defense, security, education, health care, and other activities without sufficient offsets. Those policies ended President Bill Clinton’s string of budget surpluses, and put us on our current path of endless deficits and soaring debt.
For now, Trump’s proposed cuts will launch a useful debate about federal budget priorities. What state, local, and private activities should the federal government subsidize? And should the Pentagon be exempt from the “lean and accountable” approach that Trump is demanding of other agencies?
Trump’s budget also raises an interesting political question: Will congressional Republicans — who all express concern about deficits — support the President’s approach of offsetting spending increases with cuts?