Common Sense 2.0 is a series by former Senator Tom Coburn that will look at modern issues through a first principles lens.
President Trump recently presented Congress with a $15.4 billion rescission or spending cut package. While the package would only cut spending by $1.3 billion, the administration deserves credit for trying to use an under-utilized law that allows presidents to propose cuts that were previously provided in law. Still, a proposal to cut spending that isn’t necessary should prompt taxpayers to ask two questions: Why were these programs created in the first place, and why are they a federal responsibility?
Examples of funding proposed for rescission include:
- Carryover balances of $15 million for Department of Agriculture grants for value-added agricultural product market development grants. The administration notes these funds have been used for marketing things like chocolate-covered peanuts.
- Unobligated balances of $150 million available in the “National Service Trust” established in the National and Community Service Trust Act of 1993.
- Advanced Technology Vehicles Manufacturing Loan Program (Energy): A $4.3 billion rescission of funds that have been untouched since 2011. Since ATVM’s inception in 2007, only five loans have been closed under this authority. These loans have gone to Tesla, Ford, Nissan, and the bankrupted Fisker.
- Title 17 Innovative Technology Loan Guarantee Program (Energy): A rescission of $523 million in unobligated balances dating back to the stimulus that were provided for energy loan guarantees, including to the infamous Solyndra. The authority to make new guarantees lapsed in 2011.
- Economic Development Administration (EDA): A $30 million rescission from Economic Development Assistance Programs whose authority expired in 2008. EDA grants have been used to support the development of digital football down markers and for the Expertise Cosmetology Institute in Las Vegas.
The proposed rescission for chocolate covered peanut promotion is particularly instructive. The administration argues the funds are wasteful because they duplicate existing federal subsidies in the Farm Bill. That’s true but the deeper flaw beneath duplication is the assumption Congress should be in the chocolate covered peanut business.
Our Founders wisely anticipated future Congresses would use the Constitution’s “general welfare” clause to justify any form of funding that felt good in the moment.
James Madison said in 1792, “If Congress can do whatever in their discretion can be done by money, and will promote the general welfare, the Government is no longer a limited one possessing enumerated powers, but an indefinite one subject to particular exceptions.”
The question society has to grapple with is: Who is best equipped to pick winners and losers in the chocolate covered peanut market – consumers or politicians in Washington? Why should politicians bias chocolate producers over caramel makers or other forms of hard candy? Viewing this as a federal enterprise, of course, is an absurdity. The lesson is covering over programs with good intentions and sweet sentiment doesn’t make the underlying program a legitimate federal responsibility.
Federal spending on chocolate covered peanut is a small item in the budget but the same impulse that leads Washington politicians to micromanage this market is the same impulse that leads to justify picking winners and losers in far larger markets such as health care. The chocolate covered peanut is an apt metaphor for ObamaCare plans that force consumers to buy gold-plated plans they don’t want and can’t afford, such as plans that provide maternity coverage for single men in their 50’s. Providing maternity sounds good and feels good but managing this at the federal level has proven to be destructive, misguided and terribly wasteful and expensive. A government that escapes its limited bounds justifies unlimited spending in all areas.
Congress has until mid June to act on the president’s package. The good news is rescissions can be approved with simple majorities in both houses, which means a Senate filibuster can’t derail them.
As U.S. Senator Mike Lee (R-UT) notes President Reagan regularly used this tool: “In 1981, President Reagan used this process to request 133 separate rescissions to cut more than $15 billion in federal spending. He made another 245 requests in 1985 and another 83 in 1986 to cut more than $16 billion in federal spending.”
Since 1974, presidents have used rescissions to propose nearly $76 billion in cuts and Trump’s request is the single largest request.
Make no mistake. Rescinding unnecessary spending is always a good step. But let’s not let this moment pass without also rescinding and reconsidering our assumptions about what Congress should be funding in the first place.