by Timothy Lane 11/3/13
As long as Barack Obama is (unfortunately) president and the Democrats have enough power in the Senate to block anything they really don’t like, there can be no hope for any serious effort to cut back on entitlements of any sort. But there are some small reforms in domestic spending that might be possible, and could help keep overall spending (at least for a while) under control (as has been the case since the Sequester came into effect).
As September ended, there were scattered reports of government offices going on a spending spree to make sure they used up all their allotted spending lest it be reduced the next year. The imperatives that lead to this bureaucratic mindset are difficult to remove, but one possible reform would be to allow the employees in any government office that spends less than the amount appropriated (which obviously can only apply to discretionary spending, since entitlements work differently) to keep a portion of the money saved as additional income. My thought is that one might add up the civil-service grades of all the employees (or at least active ones) in the office, and divide up the stipend (perhaps a fifth or even a fourth of the savings) by this sum to come up with the amount each employee would receive. In addition, the baseline appropriation for the next year would be reduced to the amount spent – including the stipend. [pullquote]…one possible reform would be to allow the employees in any government office that spends less than the amount appropriated (which obviously can only apply to discretionary spending, since entitlements work differently) to keep a portion of the money saved as additional income.[/pullquote]
Another very modest reform is an idea that recurs to me every time someone like Kathleen Sebelius “takes responsibility” for some gross mishap by not making any form of atonement for her misdeeds. The inspiration is the late Lyman Bostock, who leveraged a very good season as a Minnesota Twins outfielder in 1977 into a very nice free-agent contract with the California Angels. After a very poor April, Bostock apologized for his poor performance and – unlike politicians who make such apologies today – he donated his month’s salary to charity. (He didn’t need to repeat this, and was having a fine year, though not as good as the previous one, when he was murdered in Chicago by someone supposedly targeting Bostock’s sister, who was riding in the car with him.) In this case, someone like Hillary Clinton or Kathleen Sebelius could return the month’s salary to the Teasury for the purpose of reducing the budget. They can all afford it easily enough, and once the idea gained acceptance most probably would do it if only to make a more convincing case their their contrition was sincere.
Another idea actually was put into practice in Arkansas by Mike Huckabee. Faced with wealthy liberals calling for higher taxes on the rich, he set up a fund they could contribute to in order to put their money where their mouths were. It will come as no surprise that few did. But if such a fund were established, and donations made a matter of record, it would at least provide an argument for the Warren Buffetts of the world when they call for higher taxes. Either they would make their contributionst o the fund (which would be earmarked solely for deficit reduction), or their insincerity could be publicly exposed.
Also of use would be some sort of reform to government insurance programs. (We will leave aside the question of whether or not there should be any such programs. As with entitlements, there is no way they will be gotten rid of in the foreseeable future.) If the argument for an individual mandate to buy health insurance is the matter of free riders in emergency rooms, then some sort of requirement that anyone who wants to receive flood insurance should pay for it first makes sense. Perhaps there could be an explicit reduction in insurance payments based on the failure to pay for the insurance. This is probably as much as could be accomplished with flood insurance. Deposit insurance could probably be privatized to some degree; the charge for insurance should be based on the risk created by the financial policies of each bank. I don’t get the impression that such a practice exists, but I’ll admit I don’t know much about it.
None of these would be as useful as getting rid of programs that don’t work (such as Head Start, as has been been pointed for over 40 years) or no longer serve a justifiable national purpose (such as the helium reserve program). Efforts to get rid of at least a few such spending programs (particularly those fitting in the overlapping categories known as “welfare for the rich” or “corporate welfare”) should be made every year. But every such program has a constituency of recipients eager to continue sucking on the public teat, so getting rid of any will be difficult. But you can only succeed if you try, and it’s long past time for Republicans to try more often.