During the past two years, the domestic agenda in Washington has turned 180 degrees. What started off as a discussion of massive spending increases has now transformed into a discussion of how Congress can respond to the people’s demands for spending cuts.
Let’s be clear: The people are not calling for Congress to slow the rate of spending increases. They are calling for real, permanent spending cuts. Georgia has done this, as have many states, and Washington can and should do it, too.
There are those who say the American people are fickle, calling for spending cuts in general, but protesting vigorously if those cuts ever affect us personally. Americans deserve more credit than that. But let’s say for a moment that there is truth to it: that spending cuts should have a minimal negative impact on taxpayers, or even benefit them.
Appropriators in the U.S. House, including Georgia Reps. Jack Kingston and Tom Graves, are asking Americans for specific budget cutting ideas by Friday. In that spirit, what are some of the ideas that would help them cut spending in a way nearly everyone can support?
Two recent studies point to rich opportunities.
The first looked at 50 years of data, using modern econometric methods, to quantify how the money Washington spends on regulations affects economic growth and job recovery. The study, from the Phoenix Center for Advanced Legal and Economic Public Policy Studies, found that:
● Even a small (5 percent) reduction in the regulatory budget (about $2.8 billion) will result in about $75 billion in expanded private-sector gross domestic product each year.
● That modest 5 percent cut will also result in an increase in employment by 1.2 million jobs annually.
● On average, eliminating the job of a single regulator grows the American economy by $6.2 million and nearly 100 private sector jobs annually.
● Conversely, each $1 million increase in the regulatory budget costs the economy 420 private sector jobs.
Spending cuts in Washington’s vast regulatory bureaucracy would get the feds off the backs of job creators and save taxpayers money. It would both benefit the people of Georgia — especially those looking for work — and reduce the deficit.
The second study examined a multibillion-dollar U.S. Department of Agriculture program whose goal is to take broadband Internet service to rural areas that otherwise have no Internet access. The study, by Jeffrey Eisenach and Kevin Caves of Navigant Economics of Washington, was commissioned by the cable industry’s trade group, the National Cable and Telecommunications Association. The findings show the program has duplicated Internet services that already exist. If you calculated the cost of bringing government-funded Internet service to households that previously had no Internet access, it is sending tens of thousands — even hundreds of thousands — of dollars per household.
According to the study:
● The USDA’s Inspector General and the Government Accountability Office have both shown that prior broadband subsidy programs have not been cost-effective, in part because they have duplicated service to areas that already had Internet providers.
● Of the three large projects the study analyzed, more than 85 percent of households were already passed by (had access to) existing broadband Internet providers, and in one project area, more than 98 percent of households were already passed by at least one provider.
These are just two examples of government spending cuts that would not harm taxpayers, would go a long way to reducing the deficit and give Americans a new sense that Washington is ready to change its ways.
Kelly McCutchen is president of the Georgia Public Policy Foundation.
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