Monday, February 01, 2010
The largest three items of the $20 billion in reductions proposed are
- Completing the nationalization of the student loan program. Ed has already written on this one. It removes $8 billion in subsidies to banks for making student loans, using the Federal government's ability to borrow money instead of the banks using theirs. They'll argue it saves money. But it greatly expands the Federal control of education, permits the handing out of favors to students who become public sector employees, and subjects students to Congressional whim instead of financial market uncertainty. I'm not sure students will like that trade-off. The administration is calling a takeover of the student loan market 40% of its "budget cutting exercise".
- End the NASA Constellation program that sends astronauts back to the moon by 2020. $3.466 billion is to be saved by this. I'm usually inclined to like these privatizations, which is why I suspect it won't survive. There are states in the South that are already beneficiaries of this spending, and some people can't stand that other people are making money on space exploration. Most voters like space exploration (example) and it's just not something people will look at and want to kill.
- Kill the C-17 program. It's baaaack, after being rejected by the Senate last October. You want to really believe they'll change their minds this time? Fuhgeddaboudit. That's $2.5 billion of the $20 b.
But much like those larger program above, each of the smaller programs has someone backing them in Congress. While I completely agree that the Save America's Treasures program, established to help celebrate the millennium, is about ten years past its stated purpose, it does have a purpose to someone. Many of the ideas in here were ideas that existed before this administration. Many of them will outlive his administration, as well.
And at the end of the day, what will we have? If nary a one of these proposed cuts pass, what pain will be visited on the Congress? We will have a budget deficit of $1.29 trillion rather than a budget deficit of $1.27 trillion. Would anyone notice? That's what Congress hopes. Yes, I suppose someone will want to argue that it saves additional money down the road, but spending cuts are all about maintaining an option to cut later -- and favoring friends in the meantime -- rather than cutting now and losing those friends.