What does the Heritage Foundation have to say about our potential choices concerning federal spending:Study released May 10, 2011 (Part 2)

Government Must Cut Spending


“Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity,” Heritage Foundation, May 10, 2011 by  Stuart Butler, Ph.D. , Alison Acosta Fraser and William Beachis one of the finest papers I have ever read. Over the next few days I will post portions of this paper, but I will start off with the section on federal spending reform.

The Details

Returning Most Non-Defense Discretionary Spending to 2008 Levels.
Non-defense discretionary spending has expanded 21 percent faster than
inflation over the past three years. Returning to 2008 levels still leaves
typical programs nearly one-third larger than they were in 2000 (adjusted for
inflation). Freezing this spending at 2008 levels through 2015 and then capping
subsequent growth at the inflation rate would save more than $2 trillion in the
first decade and even more thereafter.

Many of these savings are achieved by reducing the size of the federal
bureaucracy, overhauling the federal pay system, permanently eliminating many
earmarked accounts, and consolidating duplicative functions. Yet not all
programs are affected equally. For example, Coast Guard and other important
security spending rises under the plan, while lower-priority spending, such as
subsidies to public broadcasting, AmeriCorps, the National Endowment for the
Arts, and the National Endowment for the Humanities, is left to the private

Devolving or Privatizing Most Transportation Spending. Under the
federal highway program, Washington collects the 18.3 cents-per-gallon gas tax
from states, subtracts a large administrative fee, and returns the remaining
funds to the states with numerous strings attached, including many requirements
to spend the dollars on congressional earmarks and for specific uses that may
not coincide with local needs. The Heritage plan reforms this inherently
wasteful system by devolving the highway program and gas tax to the states,
thereby eliminating the federal middleman and allowing states to retain the gas
tax revenues and spend them on their own highway priorities, provided they
maintain a minimum standard of interstate highway maintenance.

The Heritage plan ends federal funding for passenger rail, saving money on
projects that invariably have ridership that is far below projections and costs
that far exceed initial budgets. Amtrak subsidies are phased out over three
years, the President’s costly high-speed rail program is terminated, and
subsidies to for-profit freight railroads are ended. This relieves states of the
upkeep and maintenance burdens associated with rail programs that Washington is
currently pressuring them to undertake. The private sector and state governments
can either take over or terminate these rail programs as they see fit.

Finally, all non-safety functions of the Federal Aviation Administration
(FAA) are transferred to the private sector, and most FAA fees are eliminated.
The air traffic control system will be transferred to the private sector, where
it belongs, and financed by flight ticket user fees. The airport improvement
program is also terminated, with airlines, state government, and private
investment taking the place of the federal taxpayer.

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