Budget Bullets

New Series Looks at How to Reduce the National Deficit Through Smart Cuts that Make Government Better

SOURCE: AP/J. Scott Applewhite

The Treasury Building is seen in Washington. The United States faces a nearly $1.5 trillion federal deficit that will require making smart decisions about where to cut spending.

By Reece Rushing | May 25, 2011

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The Center for American Progress’s Doing What Works team is launching a weekly series that summarizes our suggestions for how to reduce the national deficit while boosting government efficiency—not gutting essential services. This overview is the first installment. Check back next Wednesday for the next installment.

The United States faces a nearly $1.5 trillion federal deficit caused by past fiscal mismanagement and exacerbated by the Great Recession. Congress and the executive branch will have to make smart decisions about where to cut spending and raise revenue to bring down our long-term deficits without jeopardizing economic growth and American competitiveness. The Center for American Progress's budget plan targets wasteful spending while efficiently investing in areas critical to economic growth, such as education, infrastructure, and science.

We must cut what’s broken and unnecessary, and maximize taxpayer returns on investment

• Spending programs that are outdated or ineffective, such as many agriculture subsidies, should be eliminated or reformed.
• We can often save money and improve results by consolidating overlapping government programs and initiatives, as the Government Accountability Office suggested in March.
• We must embrace innovative solutions like the administration’s proposed “pay for success” bonds, which ensure taxpayers only pay for social programs that work.
• We should redirect some budget-cut savings to smart investments in education, infrastructure, and science that boost economic growth and American competitiveness.

We must tackle big-ticket items such as defense and tax earmarks, and continue cost-saving reforms in health care

• We can’t balance the budget just by cutting nondefense, nonentitlement spending, which accounted for merely 19 percent of direct federal spending in 2010.
• We can save hundreds of billions of dollars a year by making surgical cuts to defense and implementing health care reforms, without reducing military readiness or compromising patient care.
• We must also cut wasteful tax earmarks, which cost more than $1.2 trillion a year and disproportionally benefit the rich and special interests.

We can save billions by improving government’s internal operations

• We can save between $25 billion and $54 billion a year by reforming the way the federal government buys goods and services.
• We can save billions more by moving to cloud computing and making other reforms to government information technology.
• Reducing improper payments in programs like Medicare will save at least $50 billion by 2012, according to the White House Office of Management and Budget.

Reece Rushing is Director of Government Reform at American Progress.

Also from the Budget Bullets series:

• Budget Bullets: Defense by John Griffith
• Budget Bullets: Tax Expenditures by Gadi Dechter
• Budget Bullets: Information Technology by Pratap Chatterjee
• Budget Bullets: Procurement by John Griffith
• Budget Bullets: Health Care by Kristina Costa
• Budget Bullets: Energy by John Griffith
• Budget Bullets: The Tax Gap by Seth Hanlon
• Budget Bullets: Education by Diana Epstein
• Budget Bullets: Agricultural Subsidies by Gadi Dechter