Business Ethos Blog

Reordering Priorities

President Trump campaigned on increasing expenditures for infrastructure and defense as well as enacting tax cuts for individuals and corporations.  That has raised the question as to how we are going to pay for for these initiatives.  There was little discussion about spending cuts in the Federal budget.  However, staffers for the Trump transition have been meeting with career staff to outline their plans for shrinking the federal bureaucracy.  Is it time to reconsider priorities for federal spending?  What programs or government agencies should be cut?  What is the “Right Thing to do?”  Let’s look at some issues:

  1. The changes the staffers are proposing are dramatic.  The proposed cuts follow a blueprint published last year by the Heritage Foundation, a think tank that has helped staff the Trump transition.
  2. Many of the specific cuts were included in the 2017 budget adopted by House Republicans that would reduce federal spending by $8.6 trillion over the next decade.
  3. The Departments of Commerce and Energy would see major reductions in funding, with programs under their jurisdiction either eliminated or transferred to other agencies.  The Departments of Transportation, Justice and State would see significant cuts and program eliminations.
  4. In the Commerce Department, several programs that conservatives label corporate welfare, would be eliminated.  That includes the Minority Business Development Agency, the Economic Development Agency, the International Trade Administration and the Manufacturing Extension Partnership.  Total savings from cutting these 4 programs would amount to nearly $900 million in 2017.
  5. At the Department of Energy, it would roll back funding for nuclear physics and advanced scientific computing research to 2008 levels, eliminate the Office of Electricity, eliminate the Office of Energy Efficiency and Renewable Energy and scrap the Office of Fossil Energy, which focuses on technologies to reduce carbon dioxide emissions.
  6. Under the State Department’s jurisdiction, funding for the Overseas Private Investment Corporation, the Paris Climate Change Agreement and the United Nations’ Intergovernmental Panel on Climate Change are candidates for elimination.  Some might even consider reducing funding for the United Nations because of their vote condemning Israel.
  7. At the Department of Justice, the blueprint calls for eliminating the Office of Community oriented Policing Services, Violence Against Women Grants and the Legal Services Corporation and for reducing funding for its Civil Rights and Environmental and Natural Resources Division.
  8. The Corporation for Public Broadcasting would be privatized, while the National Endowment for the Arts and the National Endowment for the Humanities would be eliminated entirely.  Funding for Planned Parenthood would be eliminated.
  9. Overall, the blueprint being used by Trump’s team would reduce federal spending by $10.5 trillion over 10 years. Their so-called skinny budget would be a 175-200 page document and is expected to come out within 45 days of Trump taking office.  The administration’s full budget is expected to be released toward the end of Trump’s first 100 days in office, by mid or late April.

The preliminary proposals will be shared with federal departments and agencies soon after Trump takes office and could provoke an angry backlash.  There is sure to be an even more heated backlash from the Democrats and their constituencies and others as their favorite programs face spending cuts or elimination.  Lobbyists will be working overtime to support their specific interests.  The final budget is eventually developed by the House.  Should they pick and choose, each member trying to save their particular favorite or should they agree to compromise to re-prioritize the overall budget?  Is it time to re-evaluate federal spending?  What is the “Right Thing to do?”  It is long overdue to examine the federal budget and to find cuts.  New spending for infrastructure and defense and tax cuts will spur the economy which has been languishing in slow growth for 8 years.  This new spending should be the new priority and lesser priorities should be cut to help pay for it so we can minimize the impact on the federal debt.  For example, I would much rather see the $900 million that can be cut this year from the Commerce Department spent on infrastructure.  The backlash will be huge, but priorities should be reordered and the suggested staff plan implemented.