It is Time to Look at Every Agency for Spending Cuts

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January 6, 2012

President Obama and Defense Secretary Leon Panetta announced a new Defense strategy on January 5, 2012.  The new strategy involves hundreds of billions of dollars in cuts.  The mysteries in these cuts are the specifics.  According to the Austin Business Journal, “President Barack Obama and Defense Secretary Leon Panetta gave few specifics about program cuts at the U.S. Department of Defense [DOD] during a briefing Thursday on DOD’s strategy…”  This is problematic because as much as the Pentagon budget needs to be cut, it should be done responsibly with the Pentagon still having the ability to meet the defense needs of the country.  In addition to the Defense cuts, President Obama should also require all federal agencies to do the same and come up with target cuts.

The Taxpayers Protection Alliance has long been supportive of cutting the Pentagon’s budget. But, instead of blindly chopping the DOD, Congress needs to do it wisely by first defunding all the earmarks the Congress added in the Omnibus Bill late last year (read more here).  Congress also needs to eliminate the Medium Extended Air Defense System (MEADS) which is costly and unnecessary (read previous blog postings here and here) and look into the awarding of the Light Air Support and Light Attack and Armed Reconnaissance (LAS/LAAR) program to a questionable Brazilian company instead of a domestic company (read previous blog posting here).

However, DOD should not be the last place to look for spending cuts.  With more than a $1 trillion in outlays, the Departments of Education (DoEd), Energy (DOE), Labor, and Health and Human Services (HHS) should be the next places to look.

Often criticized for not actually educating one child, DoEd is filled with wasteful and unnecessary programs and projects.  A prime example of wasteful spending is the Leveraging Educational Assistance Program (LEAP).  According to President Obama’s fiscal year 2012 budget, “The original goal of the LEAP program was to encourage States to provide grant aid and other financial assistance to their postsecondary students. This goal has been met.”

The Department of Energy (DOE) is an outdated agency that could be shuttered completely.   In the absence of that, the first cut should be to eliminate the Weatherization Assistance Program.  According to a report by Sen. Tom Coburn (R-Okla.), “The program received $230 million in FY 2011 through regular appropriations. The program also received an additional $8.1 billion from the American Recovery and Reinvestment Act (ARRA), nearly eight times the normal amount of annual funding for weatherization purposes across all federal programs.  The DOE IG has described ARRA funding for green energy as ‘so at odds with the realities on the ground that it was akin to attaching a lawn mower to a fire hydrant.‘”

The Department of Labor (DOL) is agency that at times gets in the way of labor, rather than helping.  The first order of business should be the repeal of the Davis Bacon Act.  Worried about unfair competition in the form of roving bands of gypsy construction workers undercutting local wages, Congress passed the Davis-Bacon Act in 1931 to ensure that “prevailing wages” are paid on federal construction projects worth $2,000 or more.  What most people don’t know is that the Davis-Bacon Act inflates the cost of federal construction projects, discriminates against small businesses, women, and minorities, and prevents federally subsidized low income housing units to be refurbished at a reasonable cost.  The Heritage Foundation estimated that “the Davis–Bacon Act (DBA) requires government contractors to pay wages averaging 22 percent above market rates.”  According to the Chamber of Commerce, repealing the Davis-Bacon Act would save taxpayers $6 billion over five years.

The Department of Health and Human Services is a treasure trove of potential spending cuts.  The big kahuna of all spending cuts in HHS would be to eliminate Obamacare.  But, just reducing improper payments by 50 percent through Medicare could save taxpayers more than more than $30 billion.  According to a March 11, 2011 article by cnsnews.com, “The Center for Medicare and Medicaid Services—the federal health-care agency that is a key bureaucracy in implementing Obamacare—made at least $70.5 billion in ’improper payments’ last year.”  This is a staggering amount and the savings could also be staggering.

That was just a sampling of cuts that can be made in those agencies with many more possible.  Now that the President has announced his goals for the Pentagon, the next order of business should be to hold a press conference with each agency and vow to make just as aggressive cuts as he is doing with the Pentagon.  With a $15 trillion debt, it is time for all agencies to share in the sacrifice.

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