May 29, 1997

May 29, 1997 | Commentary on Federal Budget

ED052997: Top 10 Obsolete Government Programs

The worst part of the budget deal struck between Congress and the White House is that does nothing to make the federal government smaller. What good is a balanced budget if it locks into place an oversized, wasteful federal bureaucracy?

For some strange reason, the politicians who crafted this deal completely overlooked the easy stuff: the obsolete and outmoded programs that nobody in his right mind can justify. As members of Congress grind out the details of the budget in the coming months, I suggest they waste no time going after the really dumb programs -- the ones worthy of the "Gold Watch Award" for long-overdue retirement. Here, for Congress's consideration, is a top 10 list of "America's Funniest Federal Follies."

10. In 1935, the Natural Resource Conservation Service was set up to help farmers minimize soil erosion. Today, this 12,000-person agency has 2,500 field offices and costs taxpayers a cool $800 million per year. Yet the U.S. General Accounting Office (GAO) has found zero difference in soil erosion between areas that participate in the program and those that don't. If Congress cut this program it would save taxpayers $3.5 billion over five years.

9. The Rural Electrification Administration (REA), also created in 1935, was supposed to help bring electricity to rural areas. In 1949, it expanded to include telephone service. Last time I checked, just about everybody in America except the Unabomber had electricity and telephones. Think it might be time to get rid of this one? Five-year savings: $1.8 billion.

8. The U.S. Geological Survey (USGS) was established in 1879 to catalog the geology and mineral resources of the United States. Mission accomplished! Yet the USGS still gets $739 million taxpayer dollars per year. If we want fancy, detailed maps showing every gopher hole in the country, there's no reason a private company can't do it. Five-year savings: $3.4 billion.

7. The Rural Housing Development Service (RHDS) provided housing loans to rural residents during the Great Depression. Lawmakers who open their history books will find an amazing fact: The Depression is over! Private lenders now serve rural residents well. Yet the RHDS still lends more than $1 billion each year, with one of the highest default rates of any government program. Eliminating it would save taxpayers $2 billion over five years.

6. The Small Business Administration (SBA) was created in 1954 to foster small business development. Yet the SBA is totally irrelevant to small business: Of the estimated 780,000 new businesses formed in the United States in 1995, 98.4 percent were started without SBA loans. Getting rid of this irrelevant program would save $3.3 billion in five years.

5. The Public Health Service Commission Corps was created in the late 1800s to provide health care to merchant seamen. Its members still have military ranks, are paid according to Pentagon pay scales, and are eligible for retirement pensions after 20 years -- yet they haven't been part of the military since 1952! They do practically nothing in their official capacity (their leadership lobbied Congress to avoid service in the Gulf War!), yet they cost taxpayers $452 million in 1994. Decommissioning the corps would save taxpayers $625 million over five years.

4. The Depression-era Davis-Bacon Act requires companies contracting with the federal government to pay "prevailing wages" -- meaning union-scale -- to their workers. Meant to protect unionized contractors from lower-cost competitors, the Act's ulterior motive was to discriminate against contractors using non-union workers -- frequently minorities. Ending this competition-stifling measure would save taxpayers nearly $9 billion over five years.

3. The Arms Control and Disarmament Agency (ACDA) was established in 1962 to decrease the number of nuclear weapons the United States and the Soviet Union were aiming at each other. Hmmm, let's see: Deployed strategic nuclear warheads on both sides increased from a few hundred to more than 10,000 between 1962 to 1990. The only thing ACDA did successfully was negotiate the Anti-Ballistic Missile (ABM) treaty, which keeps America from defending itself against missile attack. The Cold War is over, folks. Five-year savings: $42 million.

2. The Corporation for Public Broadcasting (CPB) was created in 1967 when people only had access to a few broadcast stations with limited viewing fare. Am I mistaken, or is this no longer a problem? People get upset about cutting "Sesame Street." So privatize it. The success of "Car Talk" and Garrison Keillor means PBS (public television) and NPR (National Public Radio) can make it on their own. After all, federal funding covers only 14 percent of public broadcasting's funding anyway. Five-year savings: $1.3 billion.

And the No. 1 federal boondoggle lawmakers could eliminate tomorrow without hurting anyone at all: The Economic Development Administration (EDA), which duplicates the activities of at least 62 other community development programs. The EDA will spend $350 million this year to spur local economic growth. Yet a recent GAO study found the EDA had no impact at all. Zippo. Five-year savings: $933 million.

A balanced budget is a laudable goal, but not if it continues to fund scores of silly programs nobody really wants -- or needs.

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About the Author

Note: This essay by Scott A. Hodge, Grover M. Hermann fellow in federal budgetary affairs at The Heritage Foundation, Washington, D.C., is adapted from his book "Balancing America's Budget" (1997, Washington, D.C., 445 pages).