Wednesday, April 12, 2017

It’s NOT a ruse: Tax Cuts COULD be Financed by Cutting Government Waste

by Adam Kazda with Restore Accountability

In a recent opinion piece bashing the GOP’s failed attempt to fix Obamacare and its impact on plans to reform the tax code, the author confidently makes the claim that $600 billion in spending cuts could not come from government waste alone. Instead, he suggests money to offset tax cuts would have to come from entitlement programs like Social Security and Medicare.

While Congress will need to address the shortcomings of Medicare and Social Security in the near future and there are plenty of ways to keep tax reform deficit neutral by closing tax loopholes, it is important to test this underlying claim: Is it possible to identify $600 billion in waste?

First, the largest discretionary budget item is defense, where a lack of accountable spending is weakening our ability to protect the nation.

Unable to pass an audit for over two decades, wasteful spending at the Pentagon has spun out-of-control. The American public should know where about $0.20 of every dollar they pay in taxes goes, and Congress should require the Department of Defense to submit one ASAP. Some reports suggest that by just auditing the Pentagon, it would realize savings of over $25 billion through improved financial management.

Furthermore, the Defense Business Board (DBB) recently identified a “clear path to saving over $125 billion in the next five years,” at the Pentagon. According to the Washington Post, “The plan would not have required layoffs of civil servants or reductions in military personnel. Instead, it would have streamlined the bureaucracy through attrition and early retirements, curtailed high-priced contractors and made better use of information technology.”

Another relatively easy reform are the positions within the Pentagon that include support, supply, transportation, communications, morale, welfare, and recreation support. Currently, about 400,000 active duty service members serve in these types of commercial roles, costing taxpayers $54 billion every year. The DBB calls this a “poor use of our most expensive personnel – active duty military.” If just one-third of active duty military in commercial roles were replaced with civilians, it would save $53 billion over ten years.

Finally, non-military research and development that has little or nothing to do with national defense now totals $6 billion. Some would say non-military research should be done elsewhere. Refreshingly efficient!

If you thought the Department of Defense was uniquely inefficient you would be wrong. In fact, most of the federal government cannot figure out who gets paid and who does not!


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