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The Public Policy

Money Badly Spent

Too much funding goes out the door in grants to states.

The President released his 2012 budget on Monday, and — to his credit — it includes some substantial reductions. Unfortunately, our out-of-control spending has put us in a position where even substantial reductions are not even close to enough.

In order to make any real difference, it’s going to take more than a line item cut here and there. It’s going to take a change in culture on the federal level.

For one, too much funding goes out the door in grants to states. Yes, reducing that money may mean that cash-strapped states have to increase their taxes; however, money is better spent and politicians more accountable at the state level. We should be working to reduce federal taxes so that states can increase their taxes. That way we can provide the most bang for the buck and the highest return on investment, all while the same amount of total tax money is being plucked from American households. Eventually, total taxes will go down when the efficiencies and savings of having money spent at the state level are realized.

Not only is money better spent at the state level, there is no motivation for state politicians to send federal money home. When you can take money from other states and give it to yours, the temptation to do so is hard to overcome — even when it costs your state in the end. 

For example, the U.S. Department of Justice’s core mission is to prosecute criminals, defend the United States against lawsuits, and sue corporations and individuals to recover money taken as the result of fraud or negligence. Nonetheless, that department has an Office of Justice Programs that simply doles out grant money to private organizations and to the states. In 2012, the President has asked for $7.81 billion for this purpose, a 90% increase over 2010.

Programs fund some really great things, such as DNA analysis to help solve more crimes. But if the federal government stopped taking so much money to do it — $68.72 per household — the states could institute these programs with less waste, fraud, and abuse, and with more accountability and competitive contracts.

Maybe that sounds like small potatoes next to the Department of Labor’s Employment and Training Administration which, according to its website, “administers federal government job training and worker dislocation programs, federal grants to states for public employment service programs, and unemployment insurance benefits.” The cost? In 2012, the President has asked for $117.66 billion. That is a large decrease from 2010, but still will cost the American people over $1,000 per household. Imagine if we could reduce federal taxes by $1,000 a household? Even if it gave the states the ability to raise taxes by the exact same amount, our money would be much better spent.

This year, Congress voted to end all earmarks from its members, and the President vowed to veto any bills with these designated funds. But what about all the money that was earmarked before? The money is still there, but now the discretion to spend it is with federal agencies instead of elected representatives. The president should have started by reducing the 2012 federal budget by the amount of earmarks in 2010.

These examples don’t add up to a great deal — relatively speaking — but they are an indication of the culture change that must occur if the United States is going to lead the world into the next century like we did the last. Interest alone on the national debt will be almost $475 billion — that’s over $4,000 per household before we pay down one penny of principal.

The Republican House of Representatives should be applauded for decreasing its spending, and the Democrat-controlled Senate should follow suit. This is no longer a partisan issue of trying to reduce taxes for constituencies and increase spending for others. This is an issue of keeping America on the forefront of the world. Our state system will work if we trust the states and yield to their discretion.

About the Author

Russ Ferguson is a lawyer and writer in Charlotte, North Carolina.

Letter to the Editor View all comments (22) |

Brian Mc| 2.15.11 @ 7:56AM

The only way to eliminate the rampant socialism is to dismantle federal agencies that propogate it. I would start with the Department of Education with its stranglehold on the development of our young. Until our schools are reigned in and forced to 'teach' education and stop the indoctrination process that takes us further down the road of entitlement mindset, we are waging a war we'll never win.

bobmontgomery| 2.15.11 @ 8:07PM

Exactly.

Old Soldier| 2.15.11 @ 9:52AM

Federal grants to the states also undermine our Federalists principles. There are always strings attached to that money. The states can't resist so they forfeit their autonomy to the Feds in return for cash. Just stop.

bobmontgomery| 2.15.11 @ 8:08PM

Exactly.

Al Adab| 2.15.11 @ 10:28AM

Always found it intriguing that we send our taxes to the Federal Govt. then they take a handleing charge and send some of it back to our states, cities and towns. Would it not make more sense, and cost less, to simply leave the dolars where they are generated? Maybe the states could set up escrow accounts into which we could pay those taxes, then use them for the purposes the states desire. Cut on the middle man as it were.

Old Soldier| 2.15.11 @ 1:33PM

How would that increase Federal power? Silly.

Ken (Old Texican)| 2.15.11 @ 10:46AM

I just get pithed every time I see Texans paying for the lunatics in California.

pmedi| 2.15.11 @ 10:48AM

Money is better spent at the state level? Tell that to the folks who live in California, New York, Illinois and Michigan. Tax money needs to be returned to the PEOPLE, not the states. Government needs to be kneecapped at ALL levels. The people have to get out of the mindset that the government exists to "do things" for them. Government has to stop doing for people what they can and should do for themselves. They will be able to do so once goverment stops bleeding them of so much of what they earn.

Al Adab| 2.15.11 @ 11:29AM

No question that some states do a better job than others of watching after the taxpayers' money. Good thing many of us don't live in those failed, welfare states. Nonetheless, leaving the money closer to home allows the voter/taxpayer greater control over who spends his money.

Petronius| 2.15.11 @ 10:52AM

We need to gut all federal spending except those items outlined in the Constitution. The only federal grants that should remain in place for now are medical research projects aimed at truly deadly diseases.

Oldefarte| 2.15.11 @ 12:55PM

Russ' argument is incorrect. Raising taxes by either federal, state or local governments is unnecessary, wrong, asinine and detrimental to the American taxpayers. It's way past time that ALL GOVERNMENTS should be put on a financial diet. Government spending, except for crutial collective needs such as national security, etc is simply WELFARE [which the government through its forced taxiation policies takes from the rich/INCOME EARNERS and gives to the poor/GOVERNMENTAL WELFARE RECIPIENTS. Can anyone reading this rationally itemize their needs that are being met by government? How many readers here are reciptients of governmental benefits from say, governmental housing or food aid programs? How many of you make substantial use of mass transportation vehicles [city busses, commuter trains, etc]? ALL GOVERNMENTS need to have their program funding seriously reduced and/or eliminated; and all should be forced to begin a governmental program by program review as to their necessity and utility value based upon the governmental defecits/debt now facing this country and its taxpayers!!!!!!!!!!!!!

bobmontgomery| 2.15.11 @ 8:14PM

Cleveland vigorously pursued a policy barring special favors to any economic group. Vetoing a bill to appropriate $10,000 to distribute seed grain among drought-stricken farmers in Texas, he wrote: "Federal aid in such cases encourages the expectation of paternal care on the part of the Government and weakens the sturdiness of our national character. . . . "

Talk about a hard-a..!

Kids Pool | 2.15.11 @ 1:06PM

I find hard time to visit sites that has this kind of information. I’m so glad that I found it here. For these instances, the government should perform their duties and responsibilities honestly. It is their task to develop and build up our economy. In money matters, they must spend it wisely and they should always know where to use it the most. They must know their limitation in spending money of the government. I am very much disappointed about this.

psysim| 2.15.11 @ 11:18PM

"Money Badly Spent"? -- In accordance with the Cloward-Piven Government plan, it's "Money Cleverly Spent".

Integrated Freezer | 4.1.11 @ 12:15AM

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Reebok | 8.11.11 @ 3:41AM

is good

العاب بنات | 4.11.12 @ 5:09PM

thank you

very good

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