Cutting the Federal Budget To Prevent U.S. Bankruptcy, Part VII: Privatize the Interior Department

by Jim Grichar (aka Exx-Gman) by Jim Grichar

(Author's 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 are.)

For those who did not read Parts I–VI of this series, total actual cuts in proposed spending (what I call the "Cut-o-meter") now amount to $360 billion. Those cuts came from Defense, NASA, HUD, the Education Department, the Agriculture Department, Transportation Department, and other agencies.

The Department of the Interior is an old-line federal department, with a variety of bureaus – all with some link to the land or adjacent water – under its purview. It is a department that has largely outlived its usefulness, except as a vehicle for special interests to get the public to fund their pet programs. Eliminating Interior would save $9.8 billion per year.

The Bureau of Land Management (BLM) manages non-forest lands owned by the federal government. Ranchers out west benefit from the cheap lease rates paid to the government, and because land is leased, ranchers do not have to pay property taxes to states. Any time there is a hint of raising rents on this land, a howl and cry goes up as to how our frontier heritage is being destroyed. Environmentalists also love BLM, viewing it as a vehicle for locking up lands and preventing their use for mining or other activities. (They may not like cattle ranching, but it is a convenient way to keep lands locked up.) In total, BLM "manages" 700 million acres of public lands plus manages the mineral rights for 56 million acres of Indian lands. All together, BLM's budget is nearly $2 billion per year, which would be saved if it were abolished. And sale of these public lands would likely bring in additional billions that could be used to reduce the federal debt. Here would be a chance for environmentalists to put their money where their mouth is, allowing them to take title to lands if they would only pay for them.

The Minerals Management Service of Interior manages offshore and onshore leasing of mineral rights. Its budget is about $1.41 billion, including the payment of mineral lease royalties to states to the tune of $1.124 billion. Get the federal government out of the mineral leasing business and let the states lease their lands and collect leasing royalties directly.

The Office of Surface Mining Reclamation and Enforcement exists to make sure that strip coal mines are reclaimed, covered with ground and grass, after the coal has been removed. Largely a reaction to what happened in such states as Tennessee, where the tops of mountains were removed to get coal and left, this office could today be abolished and states could take care of regulating and monitoring such activity. And this would be even more valid once federal lands were sold as recommended above. Ending this operation would save $0.36 billion per year.

The Bureau of Reclamation, source of pork for a number of federal "water projects," spends $1.161 billion per year, and it should all be abolished. While some of the water projects collect revenues and repay the federal government, the real question is why the federal government is involved in funding projects that could be funded by the states and their citizens? Cut out this program and save the $1.16 billion.

The U.S. Geological Survey is now a bone thrown to the geology community. Started to survey the nation's lands in 1879, that work has been done. Current work involves more sophisticated interpretations of the geology of public lands, work that could be better left to private geologists and the firms for which they work. Cutting out this vestige of the U.S. frontier days would save $900 million per year.

The U.S. Fish and Wildlife Service (USFWS) is a large bone thrown to the environmental movement. These are the folks who "protect" the spotted owl, Jimmy Carter's infamous "snail darter," and a host of other endangered species. Environmentalists use this organization not only to prevent legitimate multiple uses of federal lands but also to intrude on private citizens and businesses in the use of their property, all in the name of saving a species or preserving the environment. If environmentalists are really intent on preserving endangered species, let them use their own money to purchase land and preserve those creatures, just as the Audubon Society currently does for birds. Savings from abolishing USFWS would amount to $2 billion per year.

The National Park Service should also be privatized under a special sale. Currently budgeted at nearly $2.75 billion per year, the Park Service has never been able to manage properly its lands. Often the object of a political tug-of-war among environmentalists, preservationists, and local citizens, citizens have not gotten value for the tax dollars. Private firms, such as the large lumbering companies that are immensely successful at managing large tracts of land for maximum value, would be excellent potential owners for such properties and would operate them to turn a profit, thus generating funds for the upkeep and maintenance of these beautiful areas. Selling these would raise further billions of dollars for debt reduction.

The one lunatic operation within the Interior Department is another vestige of the Wild West, and that is the Bureau of Indian Affairs (BIA). Today, Indians profit hugely from setting up and running gambling casinos and other businesses on their property. These entities are all exempt from federal and state taxation and often this exemption is used to drive other neighboring "taxed" firms out of business. It is adding insult to injury to spend further taxpayer monies to subsidize the Indians. Let them keep title to their lands, and let the public save the nearly $2.4 billion spent annually on this crazy welfare scheme, a scheme that has kept Indians in poverty until the recent casino binge.

Finally, abolishing the operations at the Department level (or in b-lingo – the head shed) would save $1.6 billion annually. Included in this amount is welfare for various Pacific islands for which the U.S. is trustee (give them their independence and save the money), more welfare for Indians ($730 million!), and such useless functions as the inspector general's office. For those uninitiated in the bureaucracy, inspector generals are supposed to root out waste, fraud, abuse, and illegality in a department or agencies operations. What they really do is help the political appointees justify and cover up any malfeasance, all in the name of keeping constituents from applying political heat to their Congressmen to abolish useless and wasteful activities.

And the Cut-o-meter Total is …. $370 billion

Abolishing the Interior Department would save nearly $10 billion annually and finally put to an end an organization that serves a handful of special interests. And it would raise the Cut-o-meter total to nearly $370 billion.

Jim 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 public. He teaches economics part-time at a community college and provides economic consulting services to the private sector.

Jim Grichar Archives