Cutting the Federal Budget to Prevent U.S. Bankruptcy:
Part III Cutting Out HUD, NASA and Other Losers
Jim Grichar (aka Exx-Gman)
by Jim Grichar
note: I ask readers for their indulgence because of my extensive
use of the b-lingo bureaucrat-lingo and the detail I used in
presenting my arguments. I do this to reduce bureaucratic counter-arguments
which I expect to receive to the absurdity that they invariably
those who did not read Part III of this series, total actual
cuts in proposed spending (what I call the "Cut-o-meterí) amounted
to $155 billion below the current, that is 2004, fiscal year. All
of that total came out of the national security area, or defense.
spending, accounting for about three-fourths of the federal budget,
is ripe for cutting.
a previous article, I argued for abolishing the National Aeronautics
and Space Administration (NASA). The civilian space program is a
21st century version of Franklin Rooseveltís Works Progress
Administration (WPA) program, a boondoggle that provides employment
on useless projects. It is nothing more than high-class welfare
for scientists and engineers and the domestic aerospace industry.
space shuttle is a disaster, having led to the deaths of 14 astronauts.
It costs too much to use it to launch payloads into space, and over
its more than 20 year life, it has been proven to be unreliable.
Cheaper, unmanned vehicles are more useful and reliable for putting
payloads into orbit. In a move that reveals the multibillion-dollar
boondoggle status of the international space station, the Bush Administration
is proposing that U.S. funding of it be ended in the near future,
and, with savings from the proposed termination of the space shuttle
and some additional funds (yet to be specified, of course), that
the U.S. once again put astronauts on the moon and eventually send
manned expeditions to Mars. This plan, if funded, would probably
raise NASAís budget to the $50 billion annual level from the proposed
$16.4 billion for fiscal year (fy in the b-lingo) 2005.
several astute readers commented to me after my earlier article
on NASA, there are many private ventures that will eventually sooner, if not later offer manned space flight in a commercially
profitable manner, doing a much better job and for a lot less money
on April 7, 2004, the Federal Aviation Administration gave the first
license for a privately launched space vehicle to fly to the edge
of space, 60 miles up. This is part of a contest to get a $10-million
prize (known as the X prize) for the first privately launched space
craft that can reach at least an altitude of 62.5 miles and do this
twice within a two week period. Dick Rutan, one of the designers
and pilots of the Voyager which flew nonstop and unrefueled
around the world in 1986 is a member of the firm getting
the FAA approval. Several other firms are also expected to enter
the contest soon. In any case, Rutan predicts that within 10 years
ordinary people will be able to purchase, for the cost of a cruise
on a luxury liner, a flight into space.
addition, NASA spends lots of money on putting satellites into space
for various scientific reasons. However, all of that effort could
be funded by the private sector-based philanthropic foundations
instead of the public.
by fy 2008, NASA would be history, saving the public at least the
$16.4 billion by then. Savings over the actual spending in 2004
would be $14.6 billion, raising the Cut-o-meter savings total to
almost $170 billion.
Waste of HUD
Department of Housing and Urban Development (HUD) is a half-baked
mixture of political slush funds under the cover of welfare. For
fy 2005, HUDís proposed outlays are $38.9 billion, of which $22.2
billion is for public and Indian housing, $3.7 billion for payments
to public housing authorities for services, $3.6 billion for payments
to public housing authorities for managing public housing, $5.6
billion for other community development projects, and $34
billion more for other projects. The Bush Administration actually
proposes cuts of over $7 billion in the HUD budget over the current
year, in which $46.2 billion will be spent.
of the money goes for subsidies of one sort or another to landlords
for rent under what is called section 8 housing. In major cities,
some recipients are getting the equivalent of $1,7001,800
per month in rent subsidies. And this still takes place despite
the so-called welfare reform law of 1996. Of course, like other
federal programs, there is room for the usual waste, fraud, and
abuse. Recently, in San Francisco, a number of employees of that
cityís housing authority were convicted in federal court for taking
bribes from renters who would not otherwise qualify for HUD-funded
section 8 rental subsidies. And this is likely to be just the tip
of the iceberg. Landlords also love this deal, as they can earn
terrific rates of return on real estate investments, much higher
than they could earn renting to tenants who do not get subsidies.
In some regions, this program has shrunk the housing supply to those
who have to work for a living and instead subsidized those who do
not work part-time or full-time for a living.
who remembers Lyndon Johnsonís Great Society programs, including
"Model Cities," a HUD-funded grant program that poured
out the funds to politically-connected mayors, knows that this graft-ridden
program has only morphed into different ones, such as community
development grants, etc.
other departments, HUD is loaded with programs that can be cut.
Having to earn oneís rent is a great way to get people to go back
to work and get off welfare. Thus, the HUD budget should be cut
at least by one-third, saving about $13 billion per year by fy 2008
from the proposed fy 2005 level and about $12 billion per year from
the projected fy 2008 level. If made, these cuts would put the HUD
fy 2008 budget at about $24.3 billion, well below the actual current
level of $46.2 billion. Add $21.9 billion in actual savings to the
the whole department should be abolished, saving another $24+ billion
are loads of independent agencies in the federal government, but
here are a few that should be abolished outright. First, abolish
the National Science Foundation (NSF), which is nothing more than
a sluice-gate for funneling welfare to academics. Academics and
universities love to haul in cash from the NSF, as these grants
fund the research that keeps big-name academics at their schools.
But big-name academics can just as easily gain research funds from
private philanthropic foundations instead of looting American taxpayers.
Annual savings from abolishing the NSF would be $5.6 billion from
fy 2005 estimated levels and $5.7 billion by fy 2008. Actual savings
compared to the current 2004 level of spending would be $5.3 billion.
list of other "independent agencies" is lengthy, and while
expenditures for each are relatively small, getting rid of all of
these 57 independent agencies would save taxpayers $5.9 billion
per year. Even if some of those 57 could not be abolished, axing
the following which would be the easiest targets would
save taxpayers nearly $4.9 billion per year: 1) the Appalachian
Regional Commission ($107 million pork); 2) the Broadcasting
Board of Governors (whoa $603 million for such things as
broadcasting in the Middle East and to Cuba!); 3) the Consumer Product
Safety Commission ($63 million dictating to us what we can
or cannot consume); 4) the Corporation for National and Community
Service ($1,148 million Americorps, the USA Freedom Corps,
and other so-called volunteer programs that pay for volunteers!!);
5) the Corporation for Public Broadcasting ($390 million
let them sell commercial time like all the other networks); 6) the
Equal Employment Opportunity Commission ($347 million given
the costs of discrimination in terms of lost profits should a business
discriminate, this agency is an anachronism, to say the least);
7) the Farm Credit System Financial Assistance Corporation ($412
million more aid to farmers); 8) Federal Drug Control Programs
($495 million for this continued flop!); 9) the Federal Election
Commission ($55 million to manage the stupid campaign contribution
laws); 10) the Legal Services Corporation ($329 million welfare
for attorneys and alleged perpetrators); 11) the National Foundation
on the Arts and Humanities ($283 million funding all the
art you would never spend one cent on); 12) the National Labor Relations
Board ($249 million as if employers and employees cannot
agree on contract terms); 13) the Institute of Museum and Library
Services ($249 million oops, donít want to forget pork for
our libraries and librarians); 14) the Neighborhood Reinvestment
Corporation ($115 million in slush to pay off local politcally correct
politicos); and, 15) the Presidio Trust ($45 million a payoff
for Californiaís Sen. Barbara Boxer keeping the land in government
hands until the right real estate developer pays off enough politicians
to get them to sell the property). Add $4.9 billion to the Cut-o-meter,
as that represents a good approximation of the savings over current
spending levels from abolishing these independent agencies or programs.
large independent agencies such as the Securities and Exchange
Commission (SEC), the Federal Communications Commission (FCC), the
Export-Import Bank, and the Tennessee Valley Authority TVA) should
be abolished, or, in the case of the TVA, privatized. I have not
included them on the initial cut list as they might be too difficult
to tackle, at least initially. The SEC and the FCC are revenue raisers
in addition to being regulators. The SEC has failed on so many occasions
that it ought to be easy to expose its record and abolish it altogether,
recent corporate scandals notwithstanding. Eliminating it would
save taxpayers $1.1 billion per year, and with its elimination,
fees that offset most of these expenditures would no longer be collected,
which would amount to a tax cut. Net savings would amount to about
$300 million per year if it could be abolished.
The FCC, with the equivalent of its own taxing authority, shakes
the public down for $6.95 billion per year, with $6.925 billion
going for the subsidy of telecommunications and Internet services
for libraries, schools, and health care establishments all
in the name of providing universal service. This big expansion of
the FCCís budget occurred under the Telecommunications act of 1996,
which even subsidizes such services in high-cost areas. Originally
referred to as the "Gore tax," in honor of Al Goreís interest
in telecommunications, the whole mess has given too much additional
clout to an already over-powerful and increasingly useless FCC.
The day for ending this monster will come, sooner if not later.
Export-Import Bank appears not to cost the taxpayers anything on
a cash basis, but that is not true. It only appears that way since
past loans are being repaid while new monies are being funneled
to politically favored exporters. Whacking this turkey would eventually
save $600 million a year, although it may take time to abolish it.
Why the U.S. needs to subsidize exports is never a question that
is given an honest answer by Ex-Imís defenders.
the TVA needs to be privatized. It is a model of failure, with electric
power production costs being much higher than in comparable privately-owned
facilities. And its hydro-electric generation production costs are
no longer a model for others to follow. It takes in revenues of
over $8 billion per year and spends nearly $7.7 billion, with a
net intake of about $370 million. Privatize it, raise money for
debt reduction and get rid this legacy of Franklin Rooseveltís fascist
state. This, too, may come sooner rather than later.
the Cut-o-meter Total is .... $196 billion
up all the projected additional cuts adds another $41 billion of
savings to our previous total of $155 billion, bringing the Cut-o-meter
total actual annual savings to a bit over $196 billion.
tuned for more cuts!
Grichar (aka Exx-Gman) [send
him mail], formerly an economist with the federal government,
writes to "un-spin" the federal government's attempt to con the
teaches economics part-time at a community college and provides
economic consulting services to the private sector.
© 2004 LewRockwell.com