Contestant #1 In Our Spending Challenge
Yesterday, we challenged those of you opposed to tax hikes to take the spending challenge, and show us how the debt can be stabilized with spending cuts alone.
Soon after, our first contestant stepped up. This commentor suggested that cutting government bureaucracy was the answer:
[The] US should cut 10-15% of all the bureaucracies in its government. Those genius bureaucrats should have no problem finding a job in the private sector. With similar personal income tax Canada provides health care to all the people and US provides benefits to a monstrous bureaucracy called HHS.
So how do the numbers add up?
Of course, it depends on how you define bureaucracy -- but lets take a broad approach and assume we are talking about all government employees. According to an OMB estimate, the government spent around $420 billion on wages and benefits in 2009. That includes not only agency employees, but also military personnel, postal workers, and those employed by the judicial branch (judges, clerks, etc).
Cutting 15% of that would save just over $60 billion - or 0.4% of GDP. Assume we laid off (or allowed to retire, without replacing) 15 percent of workers effective in 2011 (and took away their benefits); and assume the savings grew with the economy, accruing interest along the way.
In that scenario, the deficit in 2018 would be 6.2 percent of GDP instead of 6.8 percent of GDP. And debt held by the public would be 82 percent of GDP instead of 85 percent (remember that our target is 60 percent).
It's a start, but it still leaves a tremendous amount of that hole to be filled in. So now what?
(We welcome more contestants and more recommendations).
Government Motors
Privatize General Motors. Stop the spending on the recovery act (stimulus package) - whatever is left. Funds from repaid TARP should go back to closing the defficit not spend on something else.
big bureaucracy
When private companies go bankrupt people lose their jobs and benefits. It is not fair to be more sensitive about it when government is bankrupt and government workers lose their job. Also in my first post I meant not just firing 10-15% of the employees, but also 10-15% of the activities they perform (cut all earmarks and outsource to the private sector everything possible).
What happened with those 100 million dollars in cuts across all agencies that President Obama ordered year ago. Did that happen?
Forgive my grammar, English is my second foreign language.I am naturalized American.
I wrote about your contest at http://www.bigbureaucracy.com/?p=138
catfish-style boondoggles
Government waste and duplicative spending continues unabated. What we need is a second look at some of these little Government projects that ad up, take on fiscal lives of their own and end up costing tax payers millions before anyone realizes it. USDA is poised to spend $16 million to set up a “catfish” inspection program just because U.S. catfish farmers lobbied for it. FDA regulates ALL other fish except now “catfish.” Sure it’s just $16 million this year but what about all the new inspectors they’ll be hiring, all the new infrastructure they’ll be building and all the new bureaucracy we’ll be paying for just so some fish farmers can get a USDA stamp on their product? It won’t make the food any safer and it’s already being done by FDA. No one would be surprised to find dozens of other catfish-style boondoggles peppering the budget. A fine-toothed comb and a willingness to stand up to special interests could go a long way in cutting wasteful spending.
Catfish - and this is only part of the story!
This catfish-comment is spot on and a great example of something that seems minor in terms of raw dollars but in fact is a major issue in several ways perhaps not immediately obvious. As somebody with extensive firsthand experience in both the global and domestic seafood industry including catfish, I can attest that this comment about the USDA program doing nothing for food safety yet at the expense of increasing spending in the face of an already-meaningful FDA program is absolutely correct. No offense to USDA who is full of hard working individuals, but it is almost absurd on its face to start literally “splitting regulators depending on seafood species” and expect that this will have anything but a confusing and possibly negative effect on food safety slong with other related issues. It is also correct to assume that this is being viewed as just the start, at least by some, in terms of building a new and growing regulatory infrastructure regardless of its duplicative focus – so the 16 million is just a start.
To be candid, there has been a significant special interest lobby effort to try and stop anything even perceived at imported competition (or even domestic competition from some smaller companies) and it has been effective. What is at least as bad as the government waste in this case and something that will not be evident to those not involved in the industry itself – the main domestic producers have shown zero ability to meet growing demand for many years (or growth with exports). Thus, this new import barrier (one of the key reasons behind the effort because of some technical USDA issues that have nothing to do with food safety) will actually cost U.S. jobs in sectors like shipping, ports, trucking, warehousing and elsewhere – jobs that will not be replaced with new ones elsewhere. At the same time, the price of this particular commodity will go up to those not exactly at the upper end of the economic spectrum. In addition, the two main countries targeted with this legislation understand the exact nature of this effort and are already talking quite seriously about trade retaliation – the last thing we should be inciting at any time, but especially during tougher economic times.
This entire effort has been at the hands of an extremely narrow group and one that frankly already receives a remarkable amount of subsidies through numerous other government measures. I thought this was supposed to be the exact opposite of what we could expect going forward in terms of government waste. If we can’t stand up and stop something as brazen as this effort, then it really looks bleak going forward.
Though, not the full story
While I agree, in part, with some of your comments I must add my own input on others. I also have extensive experience in the seafood industry, including catfish, but with no real financial interests...in case you wonder.
I couldn't get past your statement that the FDA has an "already-meaningful" program. The FDA claims to inspect 1-2% of seafood products, domestic and import, which include catfish. Catfish is admittedly a food of generally low health concern (at least I've never seen it on the sushi menu) and falls low on the risk hierarchy so the actual amount of catfish inspected is probably much less than 1%. Statistically speaking, why even bother? To suggest that a meaningful program by the FDA already exists is laughable. More of a meaningless program.
Wasn't the USDA supposed to publish something 3 months ago? Maybe its already been erased...vaporized.
Last I saw with the domestic catfish industry, I would have to agree that they don't seem to have any interest in innovating their product which will probably lead to their demise. In my opinion, this is an important industry to have some measures to protect, but hopefully they'll show some interest in protecting themselves also. Besides politically, that is.
I've heard rumors of a trend toward a single food agency. This makes a lot of sense and would cut out issues of dual jurisdiction, which already exist in many areas between the FDA and USDA, by the way. Haven't fully digested the legislation giving them more money yet.
Also, you forgot about NOAA. From what I've seen they're nearly as useless as the FDA but with a greater physical presence.
Reply
Thanks for the suggestions, we'll be blogging on these in the next few weeks. - The Bottom Line
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