Federal Spending Reduction Ideas for Pres. Trump

President-elect Donald Trump said on the campaign trail that he will balance the federal budget and cut wasteful spending. Here are some of Trump’s views on budget reforms:

“We are going to ask every department head in government to provide a list of wasteful spending projects that we can eliminate in my first 100 days.” Source.
“We can also stop funding programs that are not authorized in law. Congress spent $320 billion last year on 256 expired laws … Removing just 5 percent of that will reduce spending by almost $200 billion over a ten-year period.” Source.
“I may cut Department of Education. I believe Common Core is a very bad thing,” Trump said. “I believe that we should be — you know, educating our children from Iowa, from New Hampshire, from South Carolina, from California, from New York. I think that it should be local education.” Source.
“If we save just one penny of each federal dollar spent on non-defense, and non-entitlement programs, we can save almost $1 trillion over the next decade.” Source.
“We’re going local. Have to go local. Environmental protection—we waste all of this money. We’re going to bring that back to the states … We are going to cut many of the agencies, we will balance our budget, and we will be dynamic again.” Source.
“Waste, fraud and abuse all over the place. Waste, fraud and abuse. You look at what’s happening with Social Security, you look—look at what’s happening with every agency—waste, fraud and abuse. We will cut so much, your head will spin.” Source.

I hope my head does spin from cuts, although most of Trump’s proposals are vague and quite timid. Still, I’m hoping that the more the incoming president finds out about the federal budget, the more he will appreciate the need for major terminations.

So let me suggest some wasteful spending that the new administration should tackle, and the annual savings from terminating each:

K-12 school subsidies, which generate bureaucracy and stifle innovation ($25 billion).
Farm subsidies, which enrich wealthy landowners and harm the environment ($25 billion).
Rural corporate welfare, which is handed out by the Department of Agriculture ($6 billion).
Energy subsidies, which have been one boondoggle after another ($5 billion).
TSA airport screening, which Trump has said is “a total disaster” ($5 billion).
The war on drugs, which wastes police resources and generates violence ($15 billion).
Excess pay for federal workers, especially gold-plated retirement benefits ($33 billion with a 10 percent cut).
Housing subsidies, which distort markets and damage cities ($37 billion).
Community development aid, which is corporate welfare used for buying votes ($11 billion).
Urban transit and passenger rail funding, which are properly local and private activities ($12 billion).
Obamacare exchange subsidies and Medicaid expansion, which should be repealed along with the overall law ($225 billion a year by 2026).

President Trump will face major budget pressures in coming years as deficits and entitlement spending soar. Today’s $600 billion deficits are headed toward $1 trillion, and deficits will be even higher if a recession comes along.

Federal spending cuts would help avert a fiscal crisis and boost growth by reducing economic distortions. The incoming Trump team should start with some of the cuts here, and there are plenty more proposals at DownsizingGovernment.org.

K-12 school subsidies, which generate bureaucracy and stifle innovation ($25 billion).
Agreed - make that go away.

Farm subsidies, which enrich wealthy landowners and harm the environment ($25 billion).
Agreed - make that go away.

Rural corporate welfare, which is handed out by the Department of Agriculture ($6 billion).
Agreed - make that go away.

Energy subsidies, which have been one boondoggle after another ($5 billion).
Agreed - make that go away.

TSA airport screening, which Trump has said is “a total disaster” ($5 billion).
Disagree. Restructure TSA, but we need federal airport security because the threat is international and will go to the weak point in a state/local system.

The war on drugs, which wastes police resources and generates violence ($15 billion).
Disagree. I can see restructuring the methods and the focus, but illegal drugs are exceptionally harmful. I’m not willing to simply eliminate federal enforcement with no plan.

Excess pay for federal workers, especially gold-plated retirement benefits ($33 billion with a 10 percent cut).
Disagree. The retirement plan was part of the contract, a legal commitment, and it should be followed. However, that plan can be renegotiated for new hires and for those not vested in the system. We don’t have to sustain this forever.

Housing subsidies, which distort markets and damage cities ($37 billion).
Agreed - make that go away.

Community development aid, which is corporate welfare used for buying votes ($11 billion).
Agreed - make that go away.

Urban transit and passenger rail funding, which are properly local and private activities ($12 billion).
Agreed - make that go away.

Obamacare exchange subsidies and Medicaid expansion, which should be repealed along with the overall law ($225 billion a year by 2026).
Agreed - make that go away.

All in all, this is a good start. Throw in eliminating the entire Department of Education, the entire Department of Energy, the entire BATFE, and the entire EPA. Transfer any (very few) legitimate functions in those departments to Health and Human Services, FBI, or Interior. Even that is just a start. Big ones: Raise the Social Security and Medicare ages further, audit existing disability claims annually with a government-contracted doctor to make sure they are still disabled. Cut the military to what the services want, without the nonsense that Congress wants funded as pork.

Unless we reduce medical costs as a percentage of GDP comparable to other 1st world nations we are insolvent as a nation. Most of the other line items are diversions

Here's the money quote from Denninger “The Federal government spent 37% of every dollar it spent in total on Medicare and Medicaid last fiscal year. This rate of spending is increasing by roughly 9% a year. Within four years that will result in roughly $2 trillion a year of spending on these two programs alone and blow an additional $600 billion a year hole in the federal budget. For scale $600 billion is roughly the size of all defense spending and that's the additional amount we will try to tack onto to what is already being spent today. This is not due to people getting older, it is due to medical monopolies that in any other line of work would land everyone involved in federal prison under 100+ year old law found in 15 United States Code.”

http://market-ticker.org/akcs-www?post=231660
Is It All Going Down The Drain? Probably.
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Compare these two pages:

First, Candidate Trump:

5. Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.

.....

7. Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products. Congress will need the courage to step away from the special interests and do what is right for America. Though the pharmaceutical industry is in the private sector, drug companies provide a public service. Allowing consumers access to imported, safe and dependable drugs from overseas will bring more options to consumers.

Now read what President-Elect Trump has said.

Where did #5 and #7 go?

The rest is pretty much there, with a few (expected “red meat”) additions.

Where is any hint of any sort, now that Trump has won and no longer can be claimed to be “shoving Granny down the stairs” as a campaign tactic, of breaking up medical monopolies?

This, and only this, is why health care costs are so high. Between prescription drug importation bans (a monopolistic practice Congress created out of whole cloth, and thus Congress can repeal) to CON laws to refusal to post and quote prices to practices such as a differential billing (which is responsible for Michigan having car insurance that's 3x as expensive as states without it for starters) this has utterly disappeared. This is the issue that must be addressed and this act must take place NOW or our nation dies fiscally within the next four to five years.

This is not a maybe, it is not a possibility, it is not political rhetoric it is immutable mathematical fact.

The Federal government spent 37% of every dollar it spent in total on Medicare and Medicaid last fiscal year. This rate of spending is increasing by roughly 9% a year. Within four years that will result in roughly $2 trillion a year of spending on these two programs alone and blow an additional $600 billion a year hole in the federal budget. For scale $600 billion is roughly the size of all defense spending and that's the additional amount we will try to tack onto to what is already being spent today. This is not due to people getting older, it is due to medical monopolies that in any other line of work would land everyone involved in federal prison under 100+ year old law found in 15 United States Code.

Remember that socialist medicine in most of the developed world manages to deliver better health care outcomes than we have at half the cost per person. Capitalism always outperforms socialism for the simple reason that a capitalist system adds an incentive to bash your competitors over the head with price right up to the limit of excess margin. That is it adds price discovery as an incredibly powerful cudgel and drives incentives to remove inefficiencies and improve productivity, thereby allowing competitors to undercut one another on price even further. This means that a capitalist system minus the existing monopolies would wind up delivering health care at one fifth to one tenth of today's cost and also deliver superior outcomes! If you think this is impossible then explain the $95 MRI you can buy today in Japan (which is not a third-world country) .vs. the same scan that costs $1,000 or more here.

My concern as expressed during the campaign in multiple Tickers was that without a firm commitment to break up the medical monopolies we had no standard by which to judge. The push-back was that Trump would be accused of throwing Granny off the mountain if he took such a position and the army of health lobbyists would band together to try to destroy his campaign with lies and innuendo (which in reality was all about protecting their jobs and not your health), and would likely succeed. Ok. Fair enough.

But now the campaign is over and there is utterly no reason to not put forward said intentions if he ever had them.

As I pointed out at the time I was skeptical that any such intention was ever present.

It appears on the weight of the evidence thus far that I was right.

The evidence for that light you saw a few days ago being, in fact, the sun rising is fading fast. The manifest weight of the evidence appears to be that it in fact was a fireworks display and, while perhaps some light will leak in around the edges in various ways the most-serious issue the nation faces, and the one that will destroy us during the next President's term is being intentionally ignored yet again. Yes, it's good that President-Elect Trump will roll back many regulations including those on guns, because you're probably going to need them to protect yourself and your family. Prepare for the darkness, in short, because the odds are rising, not falling, that it is coming.

President Trump must become aware of the First Rule of Bureaucracy: “When budget cuts come, offer to cut the meat, not the fat. Defend the fat.”

Bureaucrats are the *last* people to ask what should be cut.

If you ask a bureaucrat what to cut, he will choose the programs of his competitor bureaucrats, to further enhance his own budget and power.

Instead, cuts in bureaucracies only happen if they are done like corporate cutbacks. Locate and take out entire *branches* and *divisions*, including firing everyone and cutting some of the good stuff. Once you know what the good stuff is (the “meat”), then you put *just it* back, in a different, surviving division.

Yes, it’s brutal. But it works.

The very first thing President Trump will need to do this way is to get “enabling laws” from congress, to bulldoze through the roadblocks put up by bureaucrats, both to protect their little empires, and to prevent the firing of government employees. The insidious “Government Service (GS) ‘for life’.” For life, for double dipping, and for triple dipping. That is, getting retirement for one government job while working at another government job.

Mind you, when he tries, he will get a full rebellion of government union employees, trying to protect their phony-baloney jobs. (Think Reagan and the Air Traffic Control union.) By nailing them early on, Reagan broke a LOT of resistance and roadblocks.

President Trump must be aware that government bureaucrats are almost exclusively Democrats, or at least support the Democrats. Pretty much like the other labor unions. So never assume they will do anything to carry out his (President Trump’s) agenda, unless their feet are held to the fire.

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