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Deficit Fix Should Focus on Better, Not Smaller Government

Obama’s Scalpel Smarter than Ryan’s Machete, But We Need Sharper Focus on Performance

SOURCE: AP/Pablo Martinez Monsivais

President Barack Obama outlines his fiscal policy during an address at George Washington University in Washington, Wednesday, April 13, 2011.

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The president’s major deficit-reduction announcement today is a welcome alternative to the reckless plan proposed last week by House Republicans. As the budget battle gears up from here, all sides would do well to remember that Americans want a more efficient, more accountable government—not a reduction in services.

President Barack Obama’s proposal is a serious contribution to the ongoing budget debate. The plan calls for $4 trillion in deficit reduction over 12 years and includes cuts to defense spending, elimination of some tax expenditures, reforms to agriculture subsidies, and further reductions in the growth of health care spending. The president, however, did not sufficiently articulate his vision for how we make smarter budget decisions and improve government execution, which has been an important theme of his administration’s first two years.

Still, the White House proposal offers a sharp contrast to the 10-year Republican budget plan introduced last week. The GOP blueprint offered by Rep. Paul Ryan, chairman of the House Budget Committee, combines an evisceration of Medicare and Medicaid with tax hikes on the middle class—all in service of giveaways to the wealthy that will make it more difficult for the federal government to pay down its debt.

That’s not good for America and it’s not what Americans want, according to a Hart Research poll commissioned last summer by the Center for American Progress’s Doing What Works project. People across the political spectrum prefer better government over smaller government. Young Americans in particular say they want government services to be efficiently delivered, responsibly assessed, and reformed or eliminated when they don’t work.

The GOP plan feigns concern for government efficiency but its purported savings fall apart under rudimentary analysis. For instance, Ryan claims $19 billion can be saved by consolidating $50 billion in highway and transit programs. That’s mathematically impossible, as CAP Senior Fellow Donna Cooper pointed out last week, and it completely undermines the credibility of the Republicans’ approach.

Defense spending, meanwhile, accounts for 20 percent of the federal budget—and is left virtually untouched by Ryan’s proposal. While the GOP plan includes Defense Secretary Robert Gates’s proposal to cut $78 billion in defense spending, these cuts only slow the rate of projected spending, rather than reduce the Defense Department’s bottom line. Restructuring and streamlining the federal procurement process, of which defense is a major component, could save $400 billion over 10 years, according to a November report from CAP’s Doing What Works project. And restructuring Tricare, the military health care system, could save up to $15 billion a year.

Obama’s budget plan augurs hope for those who believe government has a responsibility to listen to and care for its citizens. “Above all,” the president said today, the budget debate “will require us to choose a vision of America we want to see … 20 years down the road.” As with all major policy proposals, however, we need more details to accurately assess President Obama’s proposed changes to entitlements, the tax code, and other program areas.

The president missed an opportunity to capitalize on the momentum from his administration’s record on government performance. A budget plan that truly aims to do what works must include initiatives to improve and streamline government performance in all areas, not just attempts to achieve mathematical equilibrium through spending cuts and tax reform.

The Center for American Progress has demonstrated the budget can be brought into primary balance by 2015 through a 50-50 split of spending reductions and revenue increases. We could save as much $502 billion over five years by eliminating some of the $1 trillion in annual tax-code spending programs. That’s a more sustainable and less harmful solution than the short-term cuts passed for the current budget year that sharply reduce funding for environmental protection, high-speed rail, and homeland security “first responders.”

To be sure, inefficient programs should be reformed or cut. That’s why both new and existing government programs should be evaluated according to a rigorous assessment process like the one proposed in February by the Doing What Works project tools. These tools would help restore Americans’ confidence in government effectiveness by making sure projects are implemented successfully, operated on budget, and held accountable for their outcomes.

The government should also continue to explore innovative new financing models, like the joint public-private financing of projects through social impact bonds, which receive government funds only if they achieve performance targets.

And recent gains in government transparency and improved performance must not fall victim to the budget axe. Websites like Data.gov, USASpending.gov, and the federal IT Dashboard are essential tools for reducing operational waste in the federal government. Funding for the Electronic Government Fund, which pays for these websites, is reduced by 75 percent for the current budget year under an agreement reached last week.

Doing what works in government takes time, creativity, and a concerted effort to govern. It means rising above a narrow focus on cheap political points. Beyond the budget battle, the United States still faces serious problems that are best addressed by strong, effective government policies. Our energy policy is trapped in the 20th century and the infrastructure on which our economy relies is crumbling. We need significant investments in education to keep our country competitive in a global economy. And placing the burden of health care payments on seniors, as the Republicans propose, will do nothing to curb the astonishing rate of cost increases for all Americans.

Obama today called on progressives to “prove” strong social policies can work “by making government smarter and leaner and more efficient.” We need more details on how he plans to do that, and we should begin by listening to the American people’s demands for a better government, even as we make it leaner.

Kristina Costa is a Special Assistant for the Doing What Works project at American Progress.

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