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Want to Control Spending?

Monday, November 27, 2006

Give taxpayers a voice in government. If the federal government were as good at saving taxpayer money as it is at spending it, we'd all be better off.

For over 30 years, reformers have been trying to hold the line on federal spending. In 1974, the solution was thought to be the Congressional Budget and Impoundment Control Act. In 1985, salvation was supposed to come in the form of the Gramm-Rudman-Hollings Act. Over the years, lawmakers have proposed practically every conceivable legal device to cut, cap, limit, or freeze spending. Yet from major entitlements to petty boondoggles, programs continue to expand. Most recently, in his State of the Union Address earlier this year, President Bush joined budget reformers in urging the adoption of the line-item veto as a tool to knock out wasteful programs. But anyone familiar with the history of budget reform knows this well-intentioned effort, too, is doomed to failure.

There is only one way to gain control of spending, a simple but revolutionary approach: give taxpayers a voice in budget decisions. What we need in Washington are un-lobbyists.

Lawmakers live in a cocoon of pro-spending propaganda.

Why have previous efforts failed? The answer is that most congressmen believe that spending programs are beneficial and necessary. This may come as a surprise to outsiders, who suppose that congressmen can recognize the flaws in agencies, but are somehow corrupted to vote for wasteful programs against their better judgment. It doesn’t happen this way. Instead, lawmakers live in a cocoon of pro-spending propaganda that brainwashes them into believing that worthless programs are worthy. What is needed is a group to get the spending restraint message through to members of Congress — and to provide them with political cover when they vote against a spending bill.

The underlying cause of the pro-spending bias in Washington is that it is very costly to communicate with Congress. Civics books say that everyone has the right to be heard in a democracy, but the truth is that it takes time and effort to reach a congressman with a point of view. Suppose you hear of a spending program that seems questionable, like, for example, the State Nutrition Action Plans programs of the Food and Nutrition Service of the Department of Agriculture. You, the taxpayer, discover that it shells out $500 million dollars to state bureaucracies to support vaguely defined programs and conferences in “nutrition education.” You think it’s a boondoggle, and you wish government would stop spending your money on it, but can you afford to persuade lawmakers to stop funding it?

Before you undertake this lobbying project, you ask yourself what you stand to gain from it. Let’s say you pay $10,000 a year in federal taxes. That means that this $500 million program costs you $1.67. It can’t possibly be worth your while to travel to Washington and make your voice heard. It might not even be worth your time to write a letter.

Even if you are an altruistic idealist, and only want to end wasteful spending to protect the economic health of the country, it’s hard to justify a fight against any one wasteful program. Again, the problem of scale defeats you. Even if this program were eliminated, it would reduce federal spending by only 0.017%—and therefore have no noticeable effect on the nation’s economy. As an individual, there is scant motivation, selfish or idealistic, for you to lobby against a run-of-the-mill spending program.

Self-Interest at Work

Now consider what the supporters of spending programs are doing. These include administrators whose incomes, status, and careers depend on their programs. Eliminating their programs would cost them not a mere $1.67 but their jobs! Hence, they have an enormous personal financial interest in lobbying for the continuation of their programs. Furthermore, administrators don’t have to fund their lobbying activities out of their own pockets. Everything they do to promote their programs—meeting with congressmen, preparing flattering reports and press releases, organizing supporters—is funded by taxpayers.

The second contingent of program supporters are the lobbyists hired by those who get tax-funded payments, subsidies, and contracts. They obviously have a vested financial and professional interests in expanding spending. And, just like the administrators, lobbyists make no personal sacrifice to push their point of view. Engaging in public relations and propaganda in favor of spending is their well-paid occupation.

What would happen, then, if someone proposed eliminating a program like the State Nutrition Action Plans? Congressmen would hear from scores of authoritative, well-connected administrators and lobbyists who have weeks of taxpayer-funded time available to defend it. And because there is little money to be made in protecting the public interest, no capable lobbyist would appear to advance the taxpayer’s position that the program is unnecessary.

A Revolutionary Idea: Hearing Both Sides

To correct this imbalance, Congress should create an Office of Taxpayer Advocacy charged with the specific mission of representing the taxpayer interest in opposing unwise or unnecessary spending. This agency would employ thousands of researchers to investigate ineffective and unnecessary programs, and trace out the damage done by federal programs. It would establish a hotline for taxpayers to call about instances of waste and abuse. It would employ writers and public relations specialists to publicize the costs of spending proposals, to ensure that Congress, the media, and the public heard the taxpayer point of view.

If administrators and lobbyists believe their programs are as valuable as they say, they should welcome scrutiny and feel confident that they will be able to refute professional representatives of taxpayers. The media should be happy to have voices on both sides of spending questions. Congress itself should embrace the idea. Most lawmakers know they are being bombarded by the self-interested sales pitches of spending advocates. They know they need to hear anti-spending arguments in order to make responsible decisions.

How much might such an office cost? With a staff of 5,000, and counting all the other costs of office space, equipment and the like, it would cost about $500 million—the same size as that nutrition boondoggle. Congress could pay for it by abolishing any one of dozens of questionable programs of equal size.

The creation of an Office of Taxpayer Advocacy would represent a revolutionary change in the structure of government. Congress would create, in effect, a general interest lobby to counterbalance all the special interest lobbies it has created with its spending largesse. For the first time, lawmakers would get to hear both sides of budget questions and—for the first time—they would be in a position to make rational decisions about how to spend taxpayer dollars.

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