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Another Pentagon Slush Fund?

 

The debate over Pentagon spending is hardly new, but it has picked up again after President Trump requested an additional $52 billion in funding for the Pentagon. Fiscal hawks are skeptical about large budget increases after reports this January that leaders had buried an internal study exposing waste throughout the department, not to mention the longtime failure to pass an audit.

 

Now, evidence has surfaced that the department has raised $6 billion over 7 years by charging excessive fuel prices to its armed forces. The Washington Post reports:

 

Since 2015, the Defense Department has tapped surpluses from its fuel accounts for $80 million to train Syrian rebels, $450 million to shore up a prescription-drug program riddled with fraud and $1.4 billion to cover unanticipated expenses from the war in Afghanistan, according to military accounting records.

These prices rise because the Pentagon uses a system dating back to WWII, originally intended to improve efficiency and stop duplication: It buys fuel centrally and sells it back to the armed services and other customers at a fixed price. The problem? This price is often high above market rate, sometimes as much as a dollar per gallon.

 
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President Trump Releases His Budget Proposal

 

This morning, President Trump and the Office of Management and Budget released their budget proposal for fiscal year 2018. The proposal includes cuts to various programs while increasing funding for major discretionary departments such as Defense and Homeland Security. The two largest government programs—Social Security and Medicare—were left untouched.

 

The proposed total outlays for the year would be $4.094 trillion, while the receipts
would be $3.654 trillion in 2018. The deficit would go from $603 billion to $440 billion if the budget were adopted in its entirety. In total, it includes $3.6 trillion in spending reductions over 10 years, the most ever proposed by any President in a Budget. If their economic assumptions are correct, this will lead to a balanced budget by 2027.

 

The budget focuses on 8 pillars of reform: health reform, tax reform and simplification, immigration reform, reduction in federal spending, regulatory rollback, American energy development, welfare reform, and education reform.

 

For health reform, the budget focuses on savings from the repeal of the Affordable Care Act and also includes an extension of CHIP and the Veterans Choice Program.

 

Lowering both the corporate and individual rates are primary components of the tax reform portion, which they believe will spur massive economic growth and lead to a healthy economy. They also project that reducing regulations will help grow the economy and save the government money. The regulatory reforms stem from executive orders that the President has issued in the past few months.

 

In addition to these policy areas, the budget also focused on defense priorities, requesting $639 billion in funding for the Pentagon—$52 billion increase from the previous level, plus around $2 billion for “other defense national defense programs.” It would also add 56,400 more Soldiers, Sailors, Airmen, and Marines while further increasing the number of military ships and planes.

 

The budget also requests $44.1 billion for the Department of Homeland Security (DHS) and $27.7 billion for the Department of Justice (DOJ) for law enforcement, public safety and immigration enforcement programs and activities. As well as investing $2.6 billion in high-priority tactical infrastructure and border security technology, including funding to plan, design, and construct a physical wall along the southern border.

 

The budget also lists a $1 trillion private/public infrastructure investment program, reforming Medicaid and disability programs and allowing states to establish paid parental leave programs.

 

The budget addresses some discretionary programs that the government has funded in the past but fails to address huge programs—like Medicare and Social Security—that are hurting taxpayers the most. If the economic assumptions on growth are correct, this budget is a good start to reining in federal spending, as long as Congress can agree on all of the details. But appropriators should also seek more substantive reforms across the government, not just in the areas identified.

The High Cost of Outdated Crime Policy

 

On Friday, Attorney General Jeff Sessions announced that he had sent a memo to all federal prosecutors on changing the directives of charging and sentencing policy. Sessions instructed his employees to “charge and pursue the most serious, readily provable offense” and that they must also “disclose to the sentencing court all facts that impact the sentencing guidelines or mandatory minimum sentences.” This is a reversal of the previous administration’s push to moderate the criminal justice system, especially on drug policy.

 

This policy shift comes at a time when more than a third of drug offenders in federal prison had either minimal criminal history or none at all—the lowest out of all criminal history categories. Drug trafficking offenses account for more than 2/3 of the charges that are subject to mandatory minimum sentences.

 

Representative Justin Amash (R-MI) tweeted that the new policy is unjust, ineffective and costly. In the other chamber, Senator Rand Paul (R-KY) also criticized Sessions in a press release.

 

Beyond political questions, fiscal conservatives of all stripes are right to be paying close attention to new policies on criminal justice. $51 billion is spent on the war on drugs every year, which added up to 1.5 million arrests in 2015, of which over 80% were for sole possession of drugs, rather than distribution. In other words, the taxpayers pay a high price for policies that largely target nonviolent criminals.

 

There will always be a range of opinions on criminal justice policy in the United States, but costs will continue to mount if the status quo is maintained. That’s why leaders across the aisle have supported smart reforms in recent years, which have the potential to modernize the system and save serious money – an agenda that both Democrats and Republicans can get behind.

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