The sequester program of spending cuts constitutes the least friendly method of cutting. Instead of involving a reflective process and a proverbial scalpel, it operates like a penalty and with an axe. Few who push for cuts should be thrilled about it. It therefore helps that alternatives are floating around, such as the Mercatus Center’s A Process For Cleaning Up Federal Regulations.
Most federal waste in spending comes from expensive rules that require budgets with dizzying proportions to enforce. Directives towards reducing the regulations could create the context necessary to then go ahead and save in these budgets. The Mercatus paper presents two paradigms on reducing the fiscal burden of federal regulation: the so-called BRAC (Base Realignment and Closure) from the 1980’s, and a program in the Netherlands called the Dutch Administrative Burden Reduction Program.
The Dutch model, to put it basically, creates a matrix for accomplishing cuts. It begins with a standard for measuring regulatory cost; it then creates a minimum target reduction in that cost, and then two organizations, one political the other ministerial, to implement the cuts needed to achieve that cost reduction. The program was so successful, its model has been taken up by a number of other European countries.
Could such a model work in the U.S.?
The Mercatus paper opts for optimism by pointing to the BRAC case—a 1988 Act that enabled the military to close unneeded installations without entering into the thorny political and special interests of congressional districts. By creating a non-partisan commission to hear out complaints, so says the paper, all parties get a chance to speak and special interests get a smaller chance to shut down action. The paper concludes by showing how a commission can submit regulatory reduction suggestions to Congress and the president, who would then have to vote on it as a whole, without modification.
Sadly, the American system needs its President and Congress to put this kind of process in motion—Re-enter Mr. Sequester.
This brings to the fore a lurking question: should Americans then lose hope in the political process?
Not as such, for America once upon a time had a political figure willing to implement something very close to the Dutch model of regulatory reduction. His name was Calvin Coolidge.
So affirms Amity Shlaes, author of Coolidge. She introduced her new biography at the Heritage Foundation February 20th by explaining that she was on “a mission of reputation building.” The way she recites quotes is itself enough of a reason to listen to her talk.
At one point, Shlaes discussed President Coolidge’s methods of cost cutting.
“There were mandatory twice yearly meetings with all the departments, their cabinet members and staff,” she recounts, where General Lord, Coolidge’s budget director, would “berate the members like kindergarteners” about finding ways to cut their budgets. She continued:
“They created a 2% club, where a department could join only if they cut 2 % of their budget… after a while they ran out of ways to cut 2%, so they created a 1% club and after that a Woodpecker club for members of the government that managed to peck away at their spending requirements.”
Ms. Schlaes recites anecdote after anecdote of the fruitful and ingenious ways that President Coolidge found to cut costs, making the book a gold mine of ideas for future budget busters. What such a dynamic demonstrates is that cutting is really very easy in the American system—it just takes a president with the willpower to accomplish it.
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