Wasteful Spending By Other Names – Pacific Research Institute

Wasteful Spending By Other Names

Cutting wasteful government spending would be much easier if it were properly labeled. But, wasteful expenditures are never properly categorized as duplicitous, unnecessary, or unwarranted spending.

Instead, wasteful government expenditures masquerade as important government programs with important sounding missions. With such high-minded purposes, the groups who benefit can defend their largesse by claiming any cuts will do irreparable harm to vulnerable groups.

While specific wasteful expenditures may be small, in total they contribute to the large and rising government expenditure burden that, as documented in an upcoming Pacific Research Institute analysis I co-authored, grows faster than the private sector can afford. When coupled with the impending unfunded liabilities of Social Security, Medicare, and state and local public pensions, the rising government expenditure burden is diminishing the vibrancy of the U.S. economy.

Making matters worse, the overly burdensome size of total federal, state, and local expenditures, which now exceed $6.2 trillion or about one-third the size of the U.S. economy, provides fertile soil for wasteful government expenditures to flourish.

These incentives are worsened by the government’s current budgeting process.

Currently, instead of all government agencies needing to justify next year’s budget based on the program’s actual needs, costs, and effectiveness, the government uses last year’s budget as the basis for next year’s expenditures. When coupled with the incentives for bureaucracies to expand the scope of their activities, regardless of their ability to achieve their ever-expanding objectives, the current budget process encourages agency mission creep.

The mission creep pervading the Centers for Disease Control (CDC) illustrates this problem. Many parts of the CDC provide public goods that are invaluable – the education, research, and monitoring of the Zika virus exemplifies the important public services that the CDC provides. But, mission creep at the CDC has led to many activities that duplicate the work of other government institutes, administrations, and commissions.

For example, the mission of CDC’s National Institute for Occupational Safety and Health is “…to assure safe and healthful working conditions for every working person.” However, back in 1970 Congress created the Occupational Safety and Health Administration (OSHA) to “set and enforce protective workplace safety and health standards.” Requiring taxpayers to fund two different agencies to perform the exact same task is wasteful and creates the incomprehensible web of regulations that are the bane of all businesses, but particularly small businesses that are essential for a vibrant economy.

As another example, the CDC sponsors the Community Preventative Services Task Force (CPSTF), which, per their website, is a group of “independent, nonfederal, unpaid panel of public health and prevention experts”. While the outside experts may be unpaid, their activities are supported by a host of dedicated CDC staff and paid CDC consultants (e.g. taxpayers must still pony up money for the task force to operate).

The purpose of the Task Force is to help people choose “interventions to improve health and prevent disease”. The Task Force makes recommendations in 22 separate fields and needs experts in such diverse areas as cancer, emergency preparedness, and mental health.

Regardless of the Task Force’s merits, spending money to fund this group of outside experts is duplicative at best as its mission overlaps with the National Institute of Health (NIH) and the large number of experts already employed by the CDC. The redundancies run even deeper because the CPSTF has the same mission as another task force – the U.S. Preventative Services Task Force that is sponsored by the Agency for Healthcare Research and Quality.

The purpose of singling out the CDC is to illustrate that, even within important government agencies, the government budget is rife with duplicative expenditures that, despite their noble sounding missions, do not likely provide benefits that exceed their costs.

Furthermore, government duplication is just part of the problem. For instance, the Government Accountability Office (GAO) has identified $125 billion in improper payments made by the federal government in 2014 alone. More broadly, Citizens against Government Waste, in its annual publication, estimated that there is $648 billion of potential savings in the federal budget due to government waste.

Addressing the problem of excessive, and unproductive, government expenditures should be a top priority for the incoming Trump Administration.

One path forward is for the new Administration to require all government agencies to adopt zero-based budgeting. Under zero-based budgeting, all expenditure programs would have to be justified based on their costs and benefits, not on how much was spent on the program last year.

While such reforms are difficult to implement, unproductive government expenditures are becoming an unbearable burden on the economy. Reforms that address these inefficiencies will help ease this burden and enable stronger growth for the private economy.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

Scroll to Top