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National Review
National Review
15 Nov 2024
Veronique de Rugy


NextImg:The Corner: Some Budget-Cut Suggestions for the New Administration

Elon Musk and Vivek Ramaswamy are coming to town to cut spending, and I have suggestions. The deficit is $2 trillion and growing. We will spend roughly $7 trillion next year. There is plenty to cut. However, those looking to cut the budget will be well advised to think about it based on a series of principles. Efficiency is a loaded term that means different things to different people. Instead, let’s target all the programs that the federal government paid for that should be under the purview of state and local governments — these programs are an assault on federalism — and also target the programs that subsidize the private sector. These latter are corporate welfare.  

We should also remember that we can cut many programs from the budget, but failing to reform Social Security and Medicare means we are still on a fiscally unsustainable path.

With that in mind, here’s my abbreviated list:  

The Corporation for Public Broadcasting. It’s a purely private-sector function. In fact, a vast majority of the funding for CPB comes from private donations, so terminating it wouldn’t mean the end of PBS (Public Broadcasting Service) and NPR.

The Federal Aviation Administration. Everything should be privatized. The FAA’s aviation safety role suffers from major flaws, especially when it comes to overseeing Boeing. But if you don’t privatize that part, at the very least privatize air traffic control. It’s outdated and has had some major near misses in recent years, and it has been privatized successfully in other countries, including Canada in 1996. 

Amtrak. It should be privatized. Japan privatized its National Railways very successfully in 1987.

The Export-Import Bank. It was mostly shut down back in 2015 and stayed dormant until 2019. Do it again, please. Most of its activities benefit ten large corporations. And over the years, Boeing has been the biggest beneficiary by far. Does anyone want to argue we should keep subsidizing Boeing? Also, the case that Ex-Im is a tool to fight China is bunk, considering that the money mostly goes to companies that don’t need it and that are in high-income countries where access to capital is relatively easy.  

The Small Business Administration. I realize it’s not popular to say, but I made the case here. This agency doesn’t do what you think. It’s unfair. It sucks at disaster relief. And it is not the role of government to subsidize a few small businesses that end up competing with many businesses whose owners have done it on their own.  

Farm subsidies. Most of the benefits go to the richest farms. This should also make RFK, Jr., happy, as it would cut sugar subsidies.  

Energy subsidiesCut all subsidies, starting with the IRA subsidies, which will cost $1 trillion over ten years and $4 trillion over 30 years. There is an excellent case for such cuts here and here. However, all energy subsidies should be on the table. 

Broadband subsidies. All the subsidies should be terminated. Cato Institute’s Chris Edwards notes, “The 2021 infrastructure bill added $65 billion in broadband subsidies, which came on top of more than $100 billion of broadband subsidies since the 1990s.” It’s time to zero that out. They are inefficient, create distortions, and fail at the goals they aim to address

Coronavirus State and Local Fiscal Recovery Fund (or the Bidenomics Slush Fund, as it’s called by EPIC’s Paul Winfree). All funds that haven’t yet been spent should be rolled back. 

Food Stamps. They should be rolled back to their 2019 levels. Alternatively, Edwards suggests “cutting food stamp spending on junk food, which accounts for almost one-quarter of the $100 billion annual cost of the program.” 

Federal Aid to Public Schools. Education is a state and local function, and, at any rate, the future is school choice, so these subsidies should be cut.  

High-education subsidies. The case for ending this gravy train is here and here

Department of Transportation. Besides privatizing Amtrak and the ATC, most of the Department’s programs should be devolved to the state and local governments and the private sector. That includes urban transit subsidies and subsidies to passenger rail and other modes of transportation.

Department of Commerce. A better name for it is the Department of Cronyism. Transfer Census (constitutionally required but department not specified) and Patent and Trademark Office to some other agency. You can also keep NOAA, I guess, but the rest should be cut.  

Also on my list are the community development programs, including community development grants. There are also many cuts and reforms to Medicare, including removing all its price controls. As I mentioned, we should start there since Medicare is the biggest driver of the government’s future debt. And then, of course, there are tons more tax expenditures I would put on the chopping block.  

There is much more, including the stuff that falls in the “Congress, Do Your Job” category, such as eliminating improper payments. I remain baffled that Congress is so comfortable letting these improper payments take place and grow year after year without trying to prevent it. 

Vivek Ramaswamy pointed out another example of Congress not doing its job. He writes on X “the government spend money on programs that have expired. Yet that’s exactly what happens today: Half a trillion dollars of taxpayer funds ($516 B+) goes each year to programs which Congress has allowed to expire. There are 1,200+ programs that are no longer authorized but still receive appropriations. This is totally nuts.”  

Here’s the list. And yes, it is nuts that Congress gets away with not doing its most basic jobs properly. If it wants to spend money on these programs, it should reauthorize them.