In part one of this series, we looked at some of the nineteen federal agencies that will disappear under Trump’s new budget. After careful consideration, a few of these agencies and programs should actually be spared. Every government dollar spent should pass three tests. Megan McArdle, an excellent libertarian columnist who currently writes for Bloomberg View, provides the following rule set in her most recent piece on the budget:
Can the government actually make this problem better?
If so, must this problem be solved at the Federal level, or could it be done as easily or better by the states?
Even if the government might help solve this problem, would the associated costs in terms of loss of freedom, deadweight losses from regulation or taxation, and the declining accountability and manageability of government as it grows, actually be worth the benefit?
The problem with taking a meat cleaver to the federal budget is that you may inadvertently lop off something that passes these criteria, and unfortunately, that looks like what happened this time. Specifically, the Chemical Safety Board, gone under Trump’s plan, fulfills exactly the kind of role that is ideal for a federal agency. The CSB is not a regulator – it investigates chemical accidents and makes recommendations to prevent them from happening again. These are the same people who investigated the Deepwater Horizon spill. Even the most staunchly libertarian voter should be able to see the value in having a dedicated team of experts available to help prevent future chemical disasters.
Another disappointing loss under the new budget is the massive reduction in general science funding. Engineers, scientists, and researchers will always be pursuing specific breakthroughs in technology, but they will be focused solely on what is commercially viable without government funding. Truly groundbreaking advances, like the internet or space travel, only exist through government funding. One of the most potentially revolutionary technologies of our time, CRISPR gene editing, was discovered in part by researchers at the NIH. Under the new budget, the NIH funding levels are reduced by over 22%.
Most alarming are the deep cuts to the State Department. Diplomacy is a function which neither the private sector nor state government can provide. It is precisely the type of department that belongs in even the tiniest federal bureaucracy. In his quest to earn a reputation for slashing foreign aid, President Trump risks losing the best tools he has for preventing war. Foreign aid is a valuable bargaining tool for getting other nations to comply with our requests. To abruptly cut 28% of this funding is to take that many cards off the table. A savvy negotiator like President Trump should know better than to throw away bargaining chips before using them.
Even Republicans like Mitch McConnell and the president’s own Secretary of Defense are against cutting State Department funding. Senator McConnell (R-KY) stated “the diplomatic portion of the federal budget is very important and you get results a lot cheaper, frequently, than you do on the defense side,” while General Mattis has said “If you don’t fund the State Department fully, then I need to buy more ammunition.” Apparently these two men realize something that the president may not: when solving problems abroad, it is almost always cheaper and more effective to use the Department of State than the Department of Defense.
Then there are the head-scratchers, the programs you would think President Trump would have bolstered instead of gutted. Initiatives like the Manufacturing Extension Partnership and the State Criminal Alien Assistance Program support exactly the kinds of goals president Trump is looking to achieve. Why these got cut under a Trump administration is a mystery.
Even after getting rid of the trash (and taking some worthwhile programs along for the ride), President Trump’s budget still includes programs that have no business existing at the federal level. The Small Business Administration is one good example. Trump cut its funding by only 5%, but the department could stand to be eliminated altogether. According to The Wall Street Journal:
Small-business owners who get subsidized loans feel good (so do the banks that profit from the loans), but we can't identify how that capital would have been used absent government intervention. We can count the jobs created at the subsidized businesses, but we don't know how many more jobs might have been created if market forces determined the allocation of capital.
This meddling in the marketplace, where the government picks winners and losers, is exactly the type of spending that needs to go. President Trump got some of this right but leaves more on the table. Oh well, there’s always next year.
In the conclusion of this series, we will take a look at the ugly side of the budget and the problems that remain to be addressed here on Liberty Nation tomorrow.
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