The fiscal year (FY) 2021 President’s Budget acknowledges rampant waste and abuse in federal spending and proposes a detailed plan to curb some of Washington, D.C.’s worst excesses. But, the President’s plan doesn’t actually cut spending, it slows down the growth of spending by $4.4 trillion over the course of the decade. The full list of cuts can be found here, and TPA’s full statement on the FY 2021 budget can be found here.
Additionally, the FY 2021 budget uses rosy economic assumptions of 2.8 percent growth this year and above 3 percent growth in subsequent years to grow the country out of deficit spending. If these projections aren’t met, trillion-dollar deficits could be the new norm.
While President Trump tinkers around the edges of fiscal responsibility, absent significant entitlement and military procurement reform, spending will continue to increase and American taxpayers will be left holding the bill. President Trump’s plan skirts the issue of comprehensive entitlement reform and contains a hodgepodge of good and not-so-good proposals to change the trajectory of federal spending growth. Below, the Taxpayers Protection Alliance highlights the Good, Bad, and “Sad!” parts of the President’s budget.
Cutting farm subsidies
For decades, politicians and members of Congress have waxed poetic about helping the small American farmer stay in business against competition from international business. But, these small farmers have actually been undermined by federal farm subsidies, almost all of which go to large agribusinesses and city dwellers with few ties to farmland. In January 2020, The Philadelphia Inquirer reporter Alfred Lubrano found, “They don’t milk cows or plant corn, but nearly 900 Philadelphians have collected federal farm subsidies totaling $3.2 million in the last 25 years… Residents with addresses ranging from Center City to Chestnut Hill receive annual checks, often based on nothing more than their family connections to farms in states far afield from Pennsylvania.” Despite this poor targeting, farm subsidies show no signs of slowing down while payouts to agribusinesses reached a 14-year high last year. Fortunately, the Trump administration recognizes that U.S. agricultural policy is full of these outrageous, Robin Hood-in-reverse schemes, and has targeted farm subsidies for reduction in its FY 2021 budget. According to the blueprint, the administration “continues proposals to modify and target crop insurance, conservation, and commodity programs in a way that maintains a strong safety net” while striving “to eliminate wasteful duplication and excessive subsidies between federally subsidized crop insurance and mandatory disaster assistance.” There’s plenty of shearing to be done to the federal budget and limiting farm subsidies is a great place to start.
Increased Infrastructure Spending
President Trump boosts funding for a variety of infrastructure “investments,” despite little evidence that existing taxpayer dollars for transportation are well-spent. The President proposes a $1 trillion investment “across multiple sectors,” including a “historic 10-year, $810 billion reauthorization of surface transportation programs” (i.e. highway, transit, rail, highway safety, and hazardous materials safety programs). Never mind that existing highway spending rarely goes to the most frequently used roads and a majority of roads don’t even service enough traffic to pay for themselves in gasoline taxes. And if new lanes are added to existing, congested roads to build capacity, the problem of “induced demand” will almost offset any gains in road capacity. According to a 2009 study by University of Pennsylvania and University of Toronto researchers, increasing road capacity by 10 percent just increases the volume of cars on the road by 10 percent. Streetsblog USA contributor Angie Schmitt says it best: “Pumping billions of additional dollars into state DOTs without reforming the current system could actually make it worse [by] giving agencies license to spend lavishly on new projects that serve only to increase their massive maintenance backlogs.” Americans deserve more thoughtful spending on their infrastructure, not more wasteful federal spending.
Increased Military Spending
The U.S. may be in peacetime, but that hasn’t stopped the Pentagon from requesting an ever-increasing amount of taxpayer dollars. FY 2020’s Defense spending total of $738 billion already far exceeds the highest Defense budget (adjusting for inflation) enacted during the Reagan years at the height of the Cold War. Yet the President wants the Pentagon to have even greater access to hard-earned taxpayer dollars, proposing an astounding $407 billion (more than $40 billion a year) in increased spending through 2030. Protecting our country must, of course, remain a foremost priority for the Trump administration and members of Congress. But growing budgets reflect runaway earmark spending on supplies the Pentagon didn’t even ask for. The President signed the FY 2020 Defense Appropriations Act despite the legislation containing 785 earmarks totaling $16.1 billion (click here for the full list). These ludicrous requests included: $1.2 billion for fourteen additional F-35 planes, $541 million for three additional P-8A Poseidon aircraft, and $200 million extra for “National Security Innovation Activities.” Instead of proposing to further increase Pentagon spending, the President should pledge to return these wastefully spent dollars back to taxpayers.