Cutting waste can’t balance the budget

December 12, 2012

Sen. Tom Coburn (R-Okla.) - Washington Post Video

It's tempting to think that the federal budget is overrun with obvious waste, be it "corporate welfare" or clearly silly subsidies for useless activities. William Proxmire, a Democratic senator from Wisconsin, made a hobby of highlighting projects he thought silly or wasteful by awarding them a "Golden Fleece Award." Tom Coburn has picked up the torch with his annual "Wastebook," highlighting programs that he judges obviously worthy of cutting.

This year's report came out during the height of election season and escaped some attention because of that, but Coburn, a major figure in "fiscal cliff" negotiations, has been touting it again as an obvious source of cuts. And at face value, it sure seems like one. The items total $18 billion: not a lot, but a reasonable-sized dent, and an easy spending component to add to a deficit deal. Taken over a decade, $180 billion could be an important part of a $4 trillion debt deal.

But upon closer inspection, the cuts aren't as obvious. Of the 100 items in Coburn's Wastebook, the first 10 amount to 93.44 percent of the total cost savings. The top three amount to over 70 percent. By contrast, the last 50 items — for the most part, small studies and grants issued by executive agencies autonomously, rather than appropriated by Congress — amount to 0.06 percent of total savings, or $11.91 million. That's chump change in the context of the federal budget.

The real action is in the seven items that cost more than $1 billion. And in each case, there's less to the savings than meets the eye. In four cases — food stamp waste, overpayments from the American Opportunity Tax Credit for college, general "overpayments," and lost benefits due to identity theft — any savings would have to result from better enforcement, which itself would cost more money, and might not bring in more than it costs. For instance, better enforcement of the American Opportunity credit would entail increasing funding for the IRS. That has to be factored into these calculations.

What's more, Coburn calls the $2 billion spent on high-sugar foods within the food stamp program "waste," which ignores research suggesting that banning such foods from the program would actually increase obesity. And even if it saved money, such a policy would run into the same enforcement problems as the other items on his list.

And the other three — elderly veterans' eligibility for both VA care and Medicare, missile defense costs, and an FCC cell phone subsidy program for low-income people — are hardly free of controversy. Veterans' advocates would likely object to eliminating either VA care or Medicare for former service members and their families, while military hawks would object to cutting missile defense, and anti-poverty advocates would object to cutting the cell phone program, which could leave poor families without what's increasingly a basic necessity.

All of which is to say that there just isn't much savings to be found in pure waste. Almost all spending serves a political popular end, and what waste there is could cost more to ferret out than it takes out of the budget. There just aren't any freebies when it comes to cutting spending, and certainly not $18 billion of them.

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Dylan Matthews · December 12, 2012