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How Conservatives Would Cut Spending

Plus: Why Cutting Spending is hard

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There are a number of ways that conservatives would try to cut spending if given the chance. Approaching the fiscal issues in a rational approach and being transparent about the process are some of the basic building blocks to getting control of spending. Here, we look at three simple ways conservatives would begin to reduce the size and scope of the federal government.

Reduce Government Workforce through Attrition

During his failed presidential campaign run, Republican presidential nominee Mitt Romney laid out a solid plan to reduce spending. One of his key proposals was to slash spending on federal employees by reducing staff sizes and eventually eliminating and consolidating various departments. This of course led to cried that Romney wanted to come in and fire millions of government workers and cut crucial programs.

But Romney's proposal was to simply not replace many retiring federal employees. With a good chunk of the federal workforce retiring each year, positions could be eliminated as employees retire. If the job being vacated is crucial, their job could be replaced, preferably by another federal employee who has a job that is less crucial. This would effectively give the government the ability to reduce head count, streamline operations, and save taxpayer money without having to layoff government employees. It was a reasonable approach to a major problem.

Where could attrition work? Take, for instance, the United States Post Office. After losing billions of dollars over the last several years, analysts officially recommended a number of cutbacks at the Post Office. The main proposals included shuttering smaller, less-crucial locations or eliminating delivery days. Is mail delivery six days a week crucial in today's world? Most people would probably answer no, and government analysts agreed. Conservatives favored the proposal (and some outright favor privatization of the agency). But when it came to actually trying to implement such changes, the task became nearly impossible. While it was rational and necessary to do so, the government decided losing billions of dollars was more important than having to close down non-essential work.

Perhaps an approach where retiring employees are not replaced can solve that problem. While two employees today might run one route 6 days a week, through attrition and a cost-efficient focus one employee can run two routes three days a week. This is the type of practical solution that conservatives favor.

End Base-line budgeting

Baseline budgeting is an absurd term used by politicians to try to convince people – and perhaps themselves – that they are actually responsible with taxpayer money. Other times, the term is used to convince voters that opposing candidates are “cutting” crucial programs. Baseline budgeting is essentially a political tool used to confuse voters who do not have the time or desire to actually research every last claim a politician makes.

So, what is baseline budgeting? The term refers to the process in which federal programs enjoy automatic increases in their spending budget based on inflation or expected participation rates. This eliminates the crucial step of forcing politicians to explain why a program needs increases. For instance, if a program had a $100M budget one year, it might automatically be budgeted for $110M the next year, and $121M the year after that. As a result, when politicians discuss government spending during the budgeting process, they don’t refer to what they are currently spending ($100M), but what the next forecast is for spending.

This process is then used to convince people that they are cutting spending year-to-year. As an example, let’s say we take the $100M dollars that we are spending on program X this year. Voters are not fond of Program X so politicians promise to reduce the spending for it next year. The next year, the politicians announce that they have cut $5M in spending from Program X. But the reality is that the spending actually increased $5M year-over-year, from $100M to $105M, but baseline budgeting let’s politicians claim otherwise.

Imagine this scenario: A family decides the $200 they spent on entertainment every month last year was excessive, and vows to spend less per month next year. Due to an imagined increase in costs of movie tickets and eating out next year, it would have cost the family $235 a month to do the same activities they are currently doing. So the family decides to just spend $220 per month next year (up from $200) and rejoice that they reduced spending by $15 from last year. Sounds silly, right? That’s what baseline budgeting allows politicians to get away with. Conservatives would end baseline budgeting and do a true year-to-year budgeting analysis.

Cut Waste

Every politician loves to say they will cut waste and end fraud. In 2008, then-candidate Barack Obama promised to go through the budget “with a scalpel” and cut out any program that was not needed. This was immediately followed by the largest spending spree and deficit increases in history. In reality, the government has operated without a budget since Obama took office as Senate Democrats have refused to pass or even consider passing a budget.

But Obama is not alone. Even supposed "conservative" candidates often campaign on the promise to cut spending, and as soon as they get elected they resort to budgetary tricks like "baseline budgeting." The new crop of tea party conservatives is a lot more agressive in their reduced spending and waste-cutting ways, but they are still out-numbered heavily by Democrats and moderate and establishment Republicans.

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