Institutional Immortality, Washington Style

By Bandow, Doug | Freeman, June 1998 | Go to article overview

Institutional Immortality, Washington Style


Bandow, Doug, Freeman


Don't count on your budget surplus before the check clears." That should be this year's motto for taxpayers. Politicians are already debating how to spend the extra money they expect to collect. President Bill Clinton has a $150 billion wish list, and many Republicans are almost as bad. Unfortunately, if last year's budget deal was any example, taxpayers are unlikely to benefit from the predicted budget cornucopia.

The failings of that supposedly historic agreement were many. Federal domestic spending continues to rise even though, adjusted for inflation, it had already risen by a third over the previous decade (nearly four times as fast as family income). Three-fourths of the supposed savings is slated to occur in the year 2001 or beyond, two Congresses away. Moreover, supposedly economy-minded GOP legislators failed to corral any of Washington's most notorious sacred cows.

The Appalachian Regional Commission, a Great Society program devoted to bringing economic growth to Appalachia, still chugs along, no closer to its supposed goal. The Rural Housing Development Service has been providing home loans to farm areas since the Great Depression. The Agriculture Department continues to pay farmers to grow, and not to grow, crops. With the help of federal subsidies, the Tennessee Valley Authority has been providing cheap power to local residents for decades. The Economic Development Administration treats most of the country as depressed and robs taxpayers in one state to underwrite citizens in another. The Agency for International Development takes money from poor people in rich countries and transfers it to rich people in poor countries, subsidizing autocracy and collectivism along the way. The Corporation for National Service pays people to volunteer. All these survive, many with increased funding.

Lack of purpose is no bar to a big bureaucracy and generous budget. Two decades ago the United States suffered an "energy crisis." It was, in fact, a problem of bad policy, not inadequate oil. Richard Nixon limited oil prices as part of his wage and price controls, and preserved the energy restrictions after he ended the rest of the program. The result was increased demand, decreased supply, and, paradoxically, higher imports, since firms with greater domestic reserves had to send checks to those that imported higher-priced foreign petroleum. (As humor columnist Dave Barry says, I'm not making this up-the government forced domestic producers to subsidize oil importers.)

The 1973 OPEC oil embargo caused problems, but far more destructive were the activities of the Carter administration, which created a genuine crisis with a "windfall profits" tax, gasoline-allocation rules, temperature controls in "public" buildings, draconian environmental restrictions, the $88 billion Synthetic Fuels Corporation, and limits on leasing of the Outer Continental Shelf and federal lands. So Congress created the Department of Energy, which not only managed all of the dumb old programs that weren't working, but embarked on a host of dumb new ones-efficiency standards for refrigerators and toilets, research for highcost renewable energy, and the like.

The Department Lives President Ronald Reagan decontrolled the price of oil in 1981 but did little to kill the department. Now energy supplies are abundant, and the Republican Congress last year . . . voted $15.9 billion for the department, a $100 million increase. Real budget cutters would instead go on a turkey shoot, killing research expenditures that underwrite business, regulatory programs that micromanage consumer choices, and Power Marketing Administrations, which subsidize favored electricity consumers. …

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