Twenty-one days from now the U.S. Government will begin a new fiscal year, FY15, as soon as it celebrates the old one by dumping as many borrowed dollars as possible on anything it can legally (or mostly legally) spend them on up to their FY14 budget limits, lest their allocation be truncated for FY15. This dance goes on annually and has since probably the G. Washington Administration.
If it troubles you even a bit that this is done not just with taxpayer dollars, but also money we have to borrow from places like China, you're not alone. The logic escapes me that we do not provide incentives to federal officials for operating under their budgetary allotments. In reality, what do we want from those officials? There should be two desired results:
(1) Accomplish the mission of your office successfully during the FY by every assigned metric.
(2) Do so at the least cost possible to the taxpayer.
That #2 is universally ignored is why I used the term "should." And yet, as surely as ISIS is targeting U.S. interests here and abroad for destruction; as surely as Putin is counting countries to add to his vision of "Novorussiya" ("New Russia") and possibly including us as a longer-term subsumation target; another deadly attacker is at our doorstep -- nearly $18 trillion in debt owed in part to some of the very nations devoted to our loss of world leadership, or to worse. The current Administration's claim that it is reducing the debt is a fatuous bowl of nonsense, meant to use one figure -- the decrease in the growth rate of the national debt due to the sequester -- using words that would make you think we were actually reducing the debt itself. Hint: we're not.
Since they're quite depressingly unable to approach surplus, they naturally do not discuss the mounting debt as if it were a national crisis on the scale of ISIS or the like, but I trust you don't need an economics lecture to understand the Niagara we're headed toward in a wooden barrel.
OK, we get that the Administration has no interest in fiscal responsibility (read: balancing the budget and gradually eliminating the debt). Such common sense would blunt their efforts to make as many people as possible dependent on Government, even though, as Margaret Thatcher so pithily said, socialism fails because it eventually runs out of someone else's money.
I, on the other hand, put on my "If I Were President" hat, and find two major initiatives I would pursue in day one of the IIWP Administration.
First, I would not only appoint to my Cabinet people of credible expertise in their field, but charge them with developing a corporate disincentive to spend money. If you give me $10 million as a budget line item and tell me as manager of that mission element that I have that amount to accomplish my mission, then in the absence of instruction to the contrary, I'm going to spend that $10 million and maybe ask for more later in the year.
Conversely, if you tell me that I have $10 million, but if I can meet all my mission goals and spend less, I will be incentivized as the law allows, then I will approach the task with dual goals -- getting the mission done and finding ways to do it for less. Can five smarter/more experienced/more creative people paid a little more do what eight were doing last year? Hire or promote the five, and let the eight go. Every single Cabinet official would be implementing his/her own program to accomplish this -- with zero rewards unless the mission is accomplished through assigned metrics. As stern as that sounds, we will get nowhere without a collective understanding that, as Mitt Romney said in one of the debates in 2012, every cent we spend as a Government needs to be evaluated as to whether it is worth borrowing it from China.
The second is harder, because it's legislative, but is groundbreaking if it can be accomplished. We need to change to a five-year budget cycle. As we approach FY15, you, I, my late grandfather and most two-year-olds know that we will not have a real budget for the year. Congress will keep the Government operating through the "continuing resolution" (CR) process rather than passing bills that provide actual budgets for the Executive Branch departments. The bills funding Government will slog through Congress until maybe halfway through the actual fiscal year, something will get agreed upon, and the oh-so-vital Departments of Things Like Labor will be able to operate in their oh-so-vital roles.
How much time is Congress occupied by this charade? What great things could be accomplished if they were actually not overwhelmed by budgetary ... OK, never mind on that one. But is it not possible that we could set the budget cycle to four or five years, establishing the spending limits and guidelines and then operating under them? We ask the senior officials in the Departments to spend huge amounts of time drafting up their budget requests and, as soon as they're done, moving immediately to the next year's requests. Would we even need as many senior officials if the budget cycle were quadrennial or quintennial and 80% of their time were spent doing their job as opposed to begging for money?
There is nothing magic about a one-year cycle, and it obviously is not working. It promotes the use-it-or-lose-it mentality that causes spending dumps every September. It occupies countless man-weeks of civil service time (paid for by borrowing from China) better spent elsewhere -- or not at all. It ties Congress up in knots most of the year.
And most interestingly, by knowing what we plan to spend for 4-5 years, we can work on tax policy meant to produce the amount of revenue necessary to run the Government, no more, no less. I can't speak for you, but IIWP, I would much rather have Congress trying to figure out how to write tax code that would produce the right amount of revenue than finding new ways to spend it. But that, my friends, is tomorrow's entry.
Copyright 2014 by Robert Sutton
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