Before the 2010 election, Republican congressional candidates vowed to cut $100 billion from federal spending as one of their first acts in the 112th Congress. Now, even as the new Congress is barely sworn in, some Republican leaders are backing away from this pledge, suggesting it might not be that easy. Perhaps cuts of $50 billion would be more appropriate.
While many voters were suspicious of the Republicans - remembering their spotty record in their previous congressional majority - and may have voted against the Democrats as much as for the Republicans, this still would be a surprising defeat for those in favor of smaller, fiscally responsible government.
To assist the Republicans, let me lay out exactly how easy it would be to cut $100 billion from the federal budget. Although I will not name specific programs, Congress can figure that out by itself or simply tell each agency what its budget is and let the agencies figure out how to implement the cuts.
At the start of the past decade in January 2001, Bill Clinton was president, the Republicans controlled Congress and the federal budget had a $160 billion surplus. Since then, we have had Republican and Democratic presidents and Republican and Democratic Congresses. Under this bipartisan leadership, federal spending has risen by $1.86 trillion. Worse, federal spending has increased by $1.25 trillion above the increases necessary to keep up with inflation and population growth.
So two-thirds of the spending increases represent greater real per capita spending. That should leave plenty of room for spending cuts. Surely, Republicans in Congress can find $100 billion to cut out of the $1.25 trillion of new spending that has existed for less than 10 years.
Now, specific suggestions. All spending increases mentioned below are after adjusting for inflation and population growth, so these numbers represent real growth in spending. Spending under the Commerce Department has increased $10 billion. Cut it all. Education spending is up $60 billion. I’ll be generous in allowing some of the increased aid because school districts are in a tough budget time. So let’s cut half of it, $30 billion. The State Department budget is up $16 billion. Cut half of it, saving $8 billion. In the same vein, international assistance programs have increased by $8 billion. We cannot afford this at the moment; cut all $8 billion of the increase. In terms of bureaucracy, the Office of Personnel Management’s budget is up $4 billion; cut it. Technology should be giving us savings in functions like OPM’s, not cost increases.
So far, I have outlined $60 billion in agency-specific budget cuts. This doesn’t seem that hard. However, Democrats will be pretty angry about the education spending cuts and probably those to the State Department. So, why don’t Republicans even the slate, so to speak, in finishing the job of getting to $100 billion in cuts? The defense budget has risen by $350 billion if one adjusts for inflation but not population growth. (Because national defense does not get more expensive as population grows, this seems like a fair approach.) The wars in Iraq and Afghanistan are budgeted for $172 billion, so defense spending appears to have grown by $178 billion after accounting for inflation and the wars. If we cut one-quarter of that increase, or $43 billion, we get to $103 billion.
There is an easy, simple road map to $100 billion in federal spending cuts. Republicans should buck up and cut at least the promised $100 billion. We ought to be looking to cut the whole $1.25 trillion of post-Clinton spending growth.
Jeffrey H. Dorfman is a professor of economics at the University of Georgia.
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