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This document summarizes proposals from the Cato Institute to reduce federal spending by eliminating or reducing various federal programs and subsidies. It identifies several specific programs that could be eliminated or reduced, along with estimated annual savings, such as eliminating federal education programs ($40B), reducing federal worker pay by 10% ($20B), converting Medicaid to a block grant ($1T+ over 10 years), and phasing out Social Security as a mandatory program ($50B by 2020). The overall goal is to put the US on a path to fiscal responsibility by reducing the deficit through specific budget cuts.

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175 views1 page

CATODownsizing Ad

This document summarizes proposals from the Cato Institute to reduce federal spending by eliminating or reducing various federal programs and subsidies. It identifies several specific programs that could be eliminated or reduced, along with estimated annual savings, such as eliminating federal education programs ($40B), reducing federal worker pay by 10% ($20B), converting Medicaid to a block grant ($1T+ over 10 years), and phasing out Social Security as a mandatory program ($50B by 2020). The overall goal is to put the US on a path to fiscal responsibility by reducing the deficit through specific budget cuts.

Uploaded by

contact6866
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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“ Wewillgo throughourfederalbudget–

pagebypage,lineby line–eliminating
thoseprogramswe don’tneed.
“
— P r e s i d e n t- e l e c t b a r a c k o b a m a , n o v e m b e r 2 0 0 8

Withallduerespect
Mr.President,we’restillwaiting.
I t’s been nearly two years since you made that pledge, Mr. President. Since then, you’ve signed into law an $800 billion
“stimulus” package and a massive new health care entitlement—adding trillions of dollars in unfunded liabilities to our
grandchildren’s tab.
Our looming debt crisis threatens to destroy the American dream for future generations. Yet your administration continues
piling up deficits of over a trillion dollars a year. By 2012 our national debt will be larger than the entire U.S. economy. Isn’t it past
time you identified the programs you’d cut?
In all fairness, both parties got us into this mess. “Deficits don’t matter,” Vice President Dick Cheney scoffed as the Bush admin-
istration and a Republican Congress led one of the biggest spending sprees in American history, nearly doubling federal outlays over
eight years. Our bipartisan flight from responsibility is a national disgrace—and it’s fast becoming a national disaster. Vague promises
to eliminate “waste, fraud, and abuse” won’t cut it any more. Both parties need to step up with specific and substantial cuts.
As a start, they can consult downsizinggovernment.org, where the Cato Institute has begun posting the results of our page
by page, line by line review of the federal budget. With the Constitution as our guide, we’ve identified scores of agencies to eliminate
and programs to zero out, putting America on the path toward fiscal sanity:

Education Subsidies Federal Worker Pay


Education is a state, local, and private matter—and that's where Federal workers enjoy far greater job security than their private-
the Constitution left it. Federal K-12 education programs have cost sector counterparts—and far better total compensation: an average
American taxpayers $1.85 trillion since 1965 without noticeably im- of $120,000 a year in wages and benefits. Cut federal compensation
proving outcomes. Eliminating them will save $40 billion annually. by 10 percent to save $20 billion annually.

Farm Subsidies Energy Subsidies


Far from “saving the family farm,” federal agricultural subsidies The 30-year legacy of federal energy subsidies is replete with corporate
are environmentally destructive corporate welfare, with more than 70 cronyism and failed “investments.” Entrepreneurs with their own capital
percent of aid going to the largest 10 percent of agribusinesses. Zero- have incentives to develop viable alternative energy sources. Ending
ing out farm welfare will save $25 billion annually. federal energy subsidies would save $20 billion a year.

Military Overreach Government-run Health Care


The Constitution envisions a U.S. military that “provide[s] for the Medicare and Medicaid are driving the explosion in federal debt. The
common defence” of the United States, not one that serves as the 2010 health care law should be repealed, but the same level of Medicare
world's policeman and nation-builder. By withdrawing our troops cost savings can be realized by moving to a consumer-driven health plan
from Iraq and Afghanistan, we could save at least $125 billion next through vouchers, which would protect the elderly from government ra-
year. Eliminating other unnecessary overseas missions would allow tioning. Medicaid should be converted to a fixed block grant to save
for a leaner force structure and defense budget, saving at least $100 money and encourage state innovation. Total savings would be more
billion a year without undermining U.S. security. than $1 trillion over the next decade.

Transportation Programs Drug War


The federal government has no business funding the state and local proj- Since the start of the federal War on Drugs in 1970, we’ve spent hun-
ects that make up the bulk of federal transportation spending. Federal in- dreds of billions on a futile crusade that’s done little to curb drug use
volvement results in pork-barrel spending, excess bureaucracy, and costly and much to impair our civil liberties. In fact, a Cato study showed that
one-size-fits-all regulations. Moving funding for activities such as high- Portugal’s decriminalization of drugs actually lowered drug-related
ways to the states and air traffic control to the private sector would spur problems. Returning drug policy to the states—where it belongs—
greater innovation while also saving $85 billion a year. would save at least $15 billion annually.

Housing Subsidies Social Security


Federal interference in housing markets has done enormous As the Baby Boom generation retires, our largest entitlement program
damage to our cities and the economy at large. HUD subsidies lurches toward crisis. Social Security should be phased out as a manda-
have concentrated poverty and fed urban blight, while Fannie Mae tory program and an alternative voluntary system of private accounts,
and Freddie Mac stoked the financial crisis by putting millions of providing for ownership and inheritability, should be offered. Current
people into homes they couldn’t afford. Getting the government obligations can be reduced by tying annual benefit growth to price infla-
out of the housing business will save $45 billion annually. tion rather than wage growth, saving $50 billion annually by 2020.

Visit DownsizingGovernment.org
for a free download of the
Cato Institute’s acclaimed book
The Struggle to Limit Government.
w w w. c at o . o r g

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