Cut Where the Money Is

Photo: Emily Metcalf
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Photo: Emily Metcalf

TAXPAYERS FOR COMMON SENSE – When asked why he robbed banks, Willie Sutton supposedly observed, “because that’s where the money is.” This yielded the “Willie Sutton Rule” of business: concentrate efforts on cost-cutting and efficiency where you have the greatest costs. The same maxim applies to cutting the deficit.

As much as we rail against waste, fraud, and abuse and try to excise it from government, it doesn’t amount to $1.2 trillion — the target for the Joint Select Committee on Deficit Reduction. Not even close. This type of spending should not be exempt by any stretch, and wasteful spending provisions make up a good part of our Super Cuts for the Super Committee list. But it does mean we can’t kid ourselves into thinking we can just eliminate waste and bureaucratic excess and we’ll have the books balanced.

We also have to deal with cold hard numbers. Whether you like or hate foreign aid, it doesn’t add up to much more than a budgetary hill of beans at around 1 percent, or $44.9 billion in a $3.52 trillion federal budget in 2009. Same goes foritems like earmarks. We’ve been an uncompromising critic of special interest spending slipped in to the federal budget. And we cannot afford to make spending decisions on the basis of political muscle over project merit like earmarks did. But congressional earmarks were $15.9 billion in fiscal year 2010 — less than half of 1 percent of the budget. Good sound bites don’t always equal big savings.


Now there is value in rooting out waste, fraud, and abuse. The $400 hammer or $600 toilet seat increases the public’s cynicism and skepticism of the federal government and this has a societal cost. But as Deputy Defense Secretary Lynn observed earlier this week, we can’t sufficiently shrink the budget just through efficiencies alone. We have to prioritize. The “nice to haves” must go.

For years, we have been living beyond our means. We didn’t offset tax cuts or new programs. Instead of sharing the sacrifice of war across the budget, we did it through emergency spending and passed enormous farm and transportation bills while creating a new prescription drug benefit. And we did this all on the nation’s credit card—the last surplus was in fiscal year 2001, a decade ago.

The budgetary chickens have come home to roost. We cannot expect that a nip here and a tuck there will trim the budget sufficiently. There will be some pain and yes, some nice to have, okay programs and spending are going to have to go.

The “Super Committee” is going to have to tackle tax expenditures — special interest carve-outs in the tax code that cost $1.1 trillion in revenue every year. They are going to have to look at reforms to major mandatory spending like Social Security, Medicare, and farm programs. And they are going to have to look at discretionary spending — including defense, which accounts for more than half of all discretionary spending.

Quite simply it’s not about goring someone’s ox. A whole herd of oxen are going to have to get gored. No one should suffer under the illusion that there is some “get savings quick” scheme, some silver bullet solution to deficit issues. Reality must trump rhetoric. Just about everyone shared in gains from deficit spending, now we all will feel some pain.





  1. Hey, pretty good commentary. Fox News can scream all day long about how much the govt spends on muffins but that’s not going to have any significant effect on the deficit. Same for “foreign aid.” People don’t understand this because of all the screaming. The fact is the only places for significant savings are social security, medicare and the military. After you decide how much of those three you want to keep (and the public seems to want to keep a lot) the only thing left is raise revenue.

    DON’T FORGET, THE BUDGET WAS BALANCED WHEN CLINTON HANDED THE COUNTRY OVER TO GEORGE BUSH JR. The difference between then and now isn’t spending, it’s tax cuts.

  2. History lesson: Clinton “balanced the budget” to his own surprise by cutting defense spending, letting Al-Queda run wild and via a surprise increase in tax revenues resulting from capital gains coming out of the bubble. Furthermore, Clinton’s wasn’t really ever a balanced budget, indeed the debt increased during every year Clinton was in office. (You could look it up.)

    If anything, Clinton’s surprise budget “successes” were the result of a booming economy — something those who continue to conspire against the private sector job creators need to take to heart. Perhaps Pres. O-Blame-o needs to take a peek at what actually happened in the late 1990’s and why — instead of pretending that the feds can orchestrate an industrial policy (eg. Solyndra) that increases productivity and produces sustainable jobs.

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