March 9, 1992 | Executive Memorandum on Taxes
is 70 percent greater than the $99 billion (or 17 percent) total increase that occurred in twelve years under Jimmy Carter and Ronald Reagan. The Bentsen plan does nothing to bring this spending under control. It does not trim a single dollar of the pork, fraud, and wasteful spending that taxpayers generally ass o ciate with Washington's fiscal irresponsibility. Most taxpayers no doubt will be puzzled to hear that in a $1.5 trillion budget, absorbing one-quarter of the nation's out- put, there is no wasteful spending that could have been eliminated and the savings r eturned to taxpayers. Tightening Belts. Congress easily could save the $57 billion to finance the tax relief in the Bentsen plan by im- posing a three-year fi-eeze on the budgets of domestic discretionary programs and then allowing these programs to grow a t only the inflation rate in the fourth and fifth years. No programs would have to be eliminated under that scenario, but program administrators would have to tighten their belts-as most American families now are having to do. Alternatively, if Congress c h ose to fi-eeze the budgets of domestic discretionary programs at their current levels for five years, it could save nearly $80 billion. This is enough savings to finance the tax cuts the economy needs and still lower the deficit by $20 billion. In the sam e vein, Congress could save nearly $65 billion over the next five years just by lowering the projected growth rate of civilian agency overhead costs (excluding the postal ser- vice) by 10 percent each year. Another way lawmakers truly could get serious abo u t eliminating government waste, and raise the $57 billion for the tax relief in the Bentsen plan, would be to take ten specific measures. They could: 1) Save over $10 billion in the next five years by canceling the proposed space station. 2) Save over $9 b illion by eliminating the Department of Agriculture's Conservation Reserve Program, which pays farmers not to plant crops. 3) Save $700 million by dosing or selling the National Helium Reserve program. 4) Save over $10 billion by lowering the subsidies pa i d to wealthy agribusinesses. 5) Save $1.2 billion by eliminating the honey, wool, and mohair subsidy programs. 6) Save $5.2 billion by eliminating unnecessary highway "demonstration.1 projects. 7) Save $2 billion by cutting the travel costs of the federal bureaucracy. 9) Save nearly $12 billion by holding the increases of federal personnel costs at the inflation rate and in- creasing the productivity of bureaucrat% a measure suggested by the Geneml Accounting Office. 9) Save $5.7 billion by eliminating sch o ol lunch and other nutrition subsidies to middle and upper-in- come families. 10) Save $1.2 billion by eliminating the Economic Development Administration, which for many years has been a source of pork barrel funds for members of Congress. The Bentsen pl a n does none of these things. All it does is give a tax cut to one group of Americans while rais- ing taxes on other Americans who are the main source of investment funds for the U.S. economy. It simply raises taxes on Peter to pay Paul. Unfortunately, one result of taxing Peter in a recession is that he is likely to respond by giving Paul a pink slip. Scott A. Hodge Grover M. Hermann Fellow in Federal Budgetary AffairsF or further infonnation: Scott A. Hodp, ed., A Prosperity Planfor America-Fiscal 1993 (Washington, D.C.: Ite Heritage Foundation, 1992).