Areas of Waste in Obama Budget

It is that time of the year when Presidents rant and rave about the problem of government spending being out of control and they produce budgets that only add to the waste. Barack Obama is no different; in fact, his budgets are the largest seen in US history. Furthermore, his annual deficits are higher than the national debt was just a couple of decades ago. Rhetoric aside, Obama is operating as if it is business as usual.

Peter Morici's article title at FoxNews.com says it all, "Obama's Budget -- Straight From La La Land." In it, Morici notes that "Today, President Obama released his proposed 2011 budget, which forecasts the federal deficit will fall to $706 billion by 2014 or just 3.9 percent of GDP before rising again in 2015." The fantasy continues by noting that "To accomplish this feat, he proposes letting the Bush tax cuts expire and other spending cuts the Congress has rejected in the past. More extraordinary, though, the document assumes that real GDP grows at better than 4 percent a year over the four years from 2011 to 2014, and the economy does not encounter a serious recession." What is particularly interesting is that we have yet to recover from the economic down turn that we are currently in, yet Obama's forecast is filled with optimism.

The truth of the matter is there are plenty of areas to cut spending. In a perfect world, the Congress would be obliged to abide by its oath of office in which members agree to defend the US Constitution. If they did such, they would find they are allowed to spend in seventeen different areas according to Article I, Section 8 of that document. If they did that, budgets would always be balanced and our economic freedom would be vast. Unfortunately, our world is anything but perfect.

There are numerous "real world" ways in which we can seriously cut the deficit and Elizabeth MacDonald points out some of them in a recent article at FoxBusiness.com. The title will certainly get your attention: "$1.5 Trillion Ways to Cut the Deficit." The suggestions make sense, even if they do not have much hope in the political environment we live in today. Here are some examples:

An estimated $1.2 trillion in unused federal property. She notes that "The government owns and leases 3.87 billion square feet of property, and 55.7 million acres of land-meaning, one out of every forty acres. Real property asset value for all these holdings is estimated to be $1.2 trillion, says Citizens Against Government Waste, based on data from the Federal Real Property Profile created by the Bush administration, which helps federal agencies manage and dispose of their excess property." The examples that follow are numerous, and include Chicago's Old Main Post Office, which is a 2.5 million square foot structure that costs over $2 million annually to maintain. Than there is the John Murtha Airport in Johnstown, Pennsylvania. This airport cost over $200 million in government subsidies, even though the place has fewer passengers than security guards. The list continues and it would be very easy to get to $1.2 trillion with little or no impact on any of our lives.

Than she notes "there is the $123.5 billion on government programs that have consistently failed." She may be a little kind with such a low number, but she covers makes perfect sense. The Office of Management and Budget's (OMB) Program Assessment Rating Tool found 218 government programs that were either "inadequate" or "ineffective" virtually throughout the entire government. The OMB may be generous too, but there seems to be plenty of areas begging to be cut.

Than there is $98 billion in agency over payments that MacDonald notes. The following are only a few examples:

--Health and Human Services: $55.1 billion, or 9.4%. Includes overpayment rates of 7.8% and 15.4% in the Medicare fee for service and Advantage programs, respectively.

--Labor: $12.3 billion, or 9.9%. Most of the overpayments were in the unemployment insurance program.

--Treasury: $12.3 billion, or 25.5%. These are attributed to overpayments in the earned income tax credit.

--Social Security Administration: $8 billion, or 1.2%, in overpayments.

--Agriculture: $4.3 billion in overpayments, or 5.9% of total department spending. Much of the waste was found in food stamp, school meals and federal crop programs.

--Transportation: $1.5 billion, or 3%. This waste was primarily found in the Federal Highway Administration planning and construction program.

--Veterans Affairs: $1.2 billion, or 2.7%. Waste here includes overpayments in the pension and other compensation programs.

--Housing and Urban Development: $1 billion, or 3.5%. All of the waste in this department was found in public housing and rental assistance.

--Defense: $849 million, or 0.5%.

--Homeland Security: $644.5 million, or 3.7%. The Homeland Security grant program as well as Disaster Relief Fund Vendor Payments were the primary guilty parties at this agency.

--Education: $599 million, or 2.1%.

One of my favorite issues to attack is corporate welfare. What that means any more has changed significantly after the bailouts of Bush and Obama, but MacDonald's article (referring to the research of the Cato Institute) points out $92 billion of easily identifiable spending. "The figure includes direct cash payments, to farmers and research funds to high-tech companies, as well as indirect subsidies, such as funding for overseas promotion of specific U.S. products and industries. The cash payments come from the Departments of Agriculture, Commerce, Defense, Energy, HUD, and State."

Than there are the earmarks, which we seem to all love to hate more than any other area of government expenditures. Although they only come in at $19.6 billion (on over 10,000 earmarks), they are despised because they are part of a government approach to funding that is filled with deception. The list, again, is impressive and here are a few examples:

$75,000 for Wayne Gomes Youth Baseball Diversity Foundation

$381,000 for Jazz at Lincoln Center, New York, NY

$254,000 for Wool Research, Montana Sheep Institute

$2.2 million for Center for Grape Genetics, Geneva, NY

$1.8 million for swine odor and manure management research in Ames, Iowa

$4.4 million for the Army Center of Excellence in Acoustics

This, again is only the obvious...$1.5 trillion. Imagine what we could accomplish if we were willing to suffer a little pain for the better of our Republic?

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.