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Monday, April 10, 2017

Shrinking the Government

It's been buried by stories about the Gorsuch swearing in, the moves around Korea and terror attacks in Egypt and elsewhere, but there's a lot of worry in Washington about a memo that the Budget Director is sending to federal agencies which directs them to plan for cost cutting, staff reductions and possible closure/consolidation.  Just think of all those liberal Washington bureaucrats who are having seizures worrying that their lifetime jobs might actually be phased out in a move towards an effective and efficient government.  Oh, the horror of it all!

The plan by President Trump to try to cut back on the government and increase its efficiency is one of the little noticed actions by the President but also one of his most important.  For at least twenty years, the federal government has just grown larger.  If there's a problem, the usual answer is to establish a new agency to deal with it.  Almost no one supervises the existing agencies or tries to get them to increase their efficiency.  In normal practice in Washington, until now, the major involvement with a problem ends once the new agency is established to deal with that problem.

So what has happened?  We have huge numbers of agencies that accomplish very little.  Waste is rampant.  Fraud is too.  No one seems to care; that is, no one cared until now.  My favorite example of this waste is that there are over 100 federal agencies and programs charged with job training.  Each program has a direct and senior staff.  Each program has headquarters offices with full staffing.  Each program submits plans and proposals that have to be reviewed by more managers at the Department headquarters.  Think of that; America has 108 separate job training programs and each one is funded to cover the full costs of the overhead needed for that program.  If the director alone of these programs makes an average of $150,000 per year, that is an expenditure of over sixteen million dollars just to pay those salaries.  On the other hand, if all those programs were consolidated into four each of which focused on a different type of job training, the cost of the directors could be reduced by more than fifteen million dollars.  How many more people could get training with the money?  Indeed, if only half the savings were used for job training, how many more people could get trained while reducing the budget deficit at the same time?  When you add in all the duplicative staff and offices, there is likely well more than a billion dollars wasted on just these programs alone.

You can be sure that job training is not the only place where duplication has taken place.  There may be tens, if not hundreds, of billions of dollars wasted with these programs.  There is no reason for this aside from keeping the bureaucrats happy.

Then there is the issue of programs that don't work.  Here's the best example:  in the 1960s, the Head Start program was begun as part of president Johnson's War on Poverty.  This program has provided pre-school for millions of underprivileged students.  Then, under president Obama, the Department of Education ran a huge survey of the results of the program.  The Department expected that it would find major positive results for those who participated in the pre-school program and that this outcome would support president Obama's call for national pre-school for all children.  The result of this multi-year study, however, was just the opposite.  The government investigators found that children who went through Head Start showed no advantage over those who did not have any pre-school by two years later.  In other words, by third grade, there was no difference between those who went through the program and those who did not.  And just to be clear, this study compared children with similar socio-economic backgrounds.  The result was clear:  Head Start does not work.

So once the government learned that Head Start did not work, what did Obama do?  He ignored the study.  He still called for spending tens of billions of dollars on pre-school despite the fact that it provides no benefit.  It just sounds nice.

Just imagine how much money there is to be saved if a rational review is taken of every government program instead of just assuming that all such programs work.  If President Trump is able to get such a review done and can change just half of the failing programs, the effect would be enormous.

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