With the release of the Trump administration’s budget, many organizations and media outlets have focused on the big-ticket items, notably entitlement reforms. NTUF’s Demian Brady provided a broader summary here as well. Yet the budget is a broad and far reaching document, with numerous changes that are less sexy but nonetheless important for taxpayers. Therefore, this list is intended to fill in some of those gaps, highlighting ten important proposals, for better or for worse, that have flown under the radar.
Increase Overseas Contingency Operations Account Spending - The Trump budget includes a massive boost to OCO spending, from $69 billion in FY 2019 to $165 billion in FY 2020. The OCO account is technically intended for “unanticipated activities” overseas, but has turned into a Pentagon slush fund due to a lack of oversight. Spending that the Pentagon does not wish to have to justify often gets stashed in the OCO account.
OMB Acting Director Russ Vought justified the increase to OCO spending by claiming that it provided a way around Democrats’ attempts to “hold defense spending hostage for increases to domestic spending.” However, upping contributions to a largely unaccountable slush fund is not the path to fiscal responsibility.
Reform Agricultural Policy - The President’s budget includes several moderate, yet positive, steps towards a national agriculture policy that is more fiscally responsible and less crony capitalist. Under the budget proposal, the average crop insurance premium subsidy would be reduced, a means test would be enacted to direct support towards smaller farms more in need of assistance, the guaranteed rate of return for crop insurance companies would be slightly reduced, and subsidy beneficiaries would be limited to one manager per farm. In all, these reforms would better target agricultural subsidies while saving taxpayers $28 billion over ten years.
Introduce Tax Preparer Licensing - The budget resurrects a proposal to license tax preparers, an unnecessary and expensive proposal. Tax preparers are already regulated by the federal government, and giving the IRS further oversight authority would cause as much as 20 percent of the industry to shut down due to burdensome compliance costs. The artificially constrained market would then see higher prices across the board, increasing tax compliance costs for individuals and firms throughout the country.
Defund the Rural Business-Cooperative Service - The budget would defund the Rural Business-Cooperative Service. The RBCS has been a source for a great deal of renewable energy subsidies which promote market distortion. The RBCS also attempts to solve a problem that does not exist, providing assistance to rural businesses that are perfectly capable of running themselves. Businesses should not receive government assistance by virtue of the fact that they are located in rural areas.
Eliminate Funding for Risky Loan Programs - The President’s budget would eliminate funding for the Department of Energy’s Title 17 loan guarantee programs as well as the Advanced Technology Vehicles Manufacturing (ATVM) loan program. These programs have put taxpayers on the hook for risky loans that often don’t pan out. Title 17 loan funding has doubled from its original estimate, while the ATVM program has seen very little demand (only five companies have received loans, two of which failed to pay their loans back).
Reform the Essential Air Service - The Essential Air Service (EAS) was implemented along with airline deregulation to ensure that small, less profitable communities did not lose their access to air travel. Today, the EAS subsidizes many communities that are already near major airports that residents could easily travel to, as well as flights that are in such low demand that planes go out with many empty seats. The budget proposes to reduce funding for the program in order to target the EAS towards communities most in need.
Plug Gaps in Military Construction - The President’s use of an emergency declaration to secure funding to build the southern border wall resulted in shifting roughly $2.5 billion from military construction projects towards wall funding. This potentially dangerous gamble has left the administration in a position where it needs to use the President’s budget request to recoup these funds.
Implement “Two-Penny Plan” to Non-Defense Discretionary Spending - President Trump’s budget would implement a “two-penny plan” for all non-defense discretionary spending, reducing funding for these agencies by two percent. Doing so would save roughly $1.1 trillion over ten years.
Provide Paid Parental Leave - The President’s budget would implement a paid parental leave program which would cost roughly $20 billion over ten years. Others, such as Sen. Marco Rubio (R-FL), have proposed more budget-friendly mechanisms to fund paid parental leave, such as essentially allowing workers to delay Social Security benefits in return for parental leave funds now.
“Repurposing” MOX - The budget would attempt to resurrect the Mixed-Oxide (MOX) Fuel Fabrication Facility in South Carolina. Originally intended as a site to dispose of weapons-grade plutonium, the project’s estimated cost jumped from $1 billion in 2000 to $17 billion by 2016. Just last year, the Department of Energy finally managed to move forward with plans to shutter the facility.
The President’s budget would instead repurpose the facility into one that would produce plutonium cores for nuclear weapons. Yet the budget for this facility originally grew so far beyond original estimates because of underestimations of the costs to build a facility capable of accomplishing its stated goals. Continuing this pattern with another poorly thought-out plan for MOX risks exacerbating past errors and wasting further taxpayer dollars.