ANALYSIS | After a brutal, bruising battle to raise the federal borrowing limits this summer, a specially chosen super committee of Congress now has until Thanksgiving to find $1.2 trillion in budget cuts over the next decade. That’s a daunting task for lawmakers who like to fund programs to cure that nation’s ills. It is even more confusing to determine where the benchmarks must originate in a nation that has operated without a budget for the past two fiscal years.
Any attempt to reduce federal spending is likely going to engender fierce (and partisan) debate in the nation’s capital. To avoid statutory across-the-board cuts, Congress could start by taking the paring knife to the following programs:
NATO Budget:
This outdated military and economic alliance received $711.8 million in U.S. taxpayer support through direct payments during FY2010, excluding expenditures for munitions and personnel assigned to combat zones. This is roughly 7 percent higher than the next largest contributors (e.g. France and the United Kingdom), and does not include the amount spent by the United States to stockpile munitions for future need.
While only in a logical supporting role, the U.S. still spent approximately $1.1 billion on the Libyan conflict, according to CNN. These costs mounted from provided intelligence, air support and munitions to our NATO allies.
According to NATO Secretary General Anders Fogh Rasmussen, member countries reduced their domestic defense spending for the past two years by a combined $45 billion. The United States should re-evaluate the significance of a NATO alliance in a post-Soviet Union world. Who exactly are the member nations of NATO protecting themselves against?
The United States should bring parity in NATO contributions. A 6 percent reduction in direct payments would result in approximately $420 million in savings over the next decade. Requiring our allies to spend more for munitions and other shared alliance costs would save billions more, especially when the $8.5 billion allocated in FY2009 is eliminated.
Foreign Aid:
According to the U.S. Census Bureau, Statistical Abstract 2011, the United States gave $49.1 billion in foreign aid in FY2008 (the latest year data was available) through the U.S. State Department and the Pentagon. This does not include directed aid given through other budget line items or controlled in generalized or secret accounts.
Afghanistan, Egypt and Pakistan received a combined $11 billion. Despite their enormous oil reserves, Iraq received $5.2 billion in humanitarian and reconstruction aid with absolutely no conditions set for repaying it to the U.S. Treasury.
America has always been a generous nation in time of need, but budgetary stresses make this policy unsustainable at current levels. A 50 percent reduction is reasonable and still allows the United States to provide a hand up in times of need. Congress also should require all aid be given with repayment conditions to those countries with extensive natural resources.
Supplemental Nutrition Program:
In FY2010, the federal government provided over 40 million people with some form of supplemental nutrition assistance which cost taxpayers $68 billion. Some of the programs appear worthy of continuing (e.g. school breakfast program), but a complete restructuring of this program is warranted to eliminate administrative inefficiencies, duplicate programs and unhealthy eating habits promoted by program rules.
If the federal government distributed funds to the states in the form of block grants, many federal-level programs could be pared or eliminated. Reducing the overall budget by 5 percent – while politically unsafe — would trim administrative excess and re-target resources to families. SNAP benefits should be restricted to staple foods and vegetables. Frozen foods, pre-packed foods, and all fast foods should be eliminated from the program to promote healthier eating habits and reduce obesity, especially among children.
Political Ramifications:
While savings from these programs are obvious, getting a gridlocked Congress to consider them would be a difficult task. Republicans would be uneasy about shaking up the NATO alliance or using heavy-handed tactics to encourage allies to boost domestic military spending. Democrats would be reluctant to overhaul the SNAP program for fear of alienating their base. Any discussion of modifying foreign aid sounds easy to the average American, but it is a complicated web of treaties and international agreements. Those would be difficult (if not impossible) to adjust before the Thanksgiving deadline.
If adopted, these three reductions would save taxpayers nearly $370 billion over a 10-year period, plus savings from interest payments that would have resulted from borrowing to cover the deficit. NATO restructuring would save billions more for U.S. taxpayers and create a true inter-dependent alliance.