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Press Release

Can Spending Commissions Succeed Where Politicians Fail?


Despite widespread anger at high taxes and bloated government spending, cutting government programs continues to be a near-impossible political task. Why can’t the political system transfer broad popular support for cutting wasteful spending into real action?

It’s a classic problem that political scientists call “concentrated benefits, dispersed costs.” Spending creates constituencies that benefit from it, sometimes immensely. These constituencies-- unions, grant recipients, public employees, etc.— often owe their living to these programs and will work extremely hard to preserve and expand them. Instead of alienating these narrow, vocal constituencies, politicians faced with budget crises opt to travel the easy path and simply demand that all taxpayers give them even more money to spend. Unless taxpayers are organized into their own groups like Citizens for a Sound Economy, these special interests almost always trump the broad public interest. Hence, taxes and spending keep rising year after year.

The first line of defense is the activism of groups like CSE. However, in recent years a new political tactic has emerged: appointing a “waste” or “spending commission” to examine the budget and make recommendations. This year in South Carolina, for example, Governor Mark Sanford wants to prove that the state can cut spending before raising taxes. To this end, he has set up a commission to find out where state tax money goes and identify areas that are not using those dollars appropriately.

It might work. Government commissions such as these have a recent history in the United States. The most famous example, the Grace Commission, was set up by President Ronald Regan. During the course of its existence, the Grace Commission identified $424 billion in waste and fraud of federal money. Assuming every dollar identified by the commission was either waste, fraud, or abuse, this essentially amounts to the government taking $1,800 per person, not taxpayer, and throwing it away. Of course, the money stayed in the economy, but it was not put towards productive, wealth creating uses. It was simply transferred from the people who earned it to the people fleecing the government. If that was the situation twenty years ago, just imagine how much waste and fraud exists in the federal government today.

Conceptually, independent spending commissions have a lot to offer. First, they help the good guys by simply figuring out what exactly the government is spending money on. These commissions create a list of targets that the government and others fighting against waste can use in their quest to cut spending. Second, they are politically feasible and help create “a consensus… in support of reforms that eliminate fraud, waste, and abuse, and reforms that increase efficiency and productivity.” (Nesterczuk, George. “Reviewing the National Performance Review.” Regulation.) Third, the commissions create a buzz around the issue of government spending. They put government spending priorities into the spotlight and let citizens know exactly what activities the government is paying for with their money. Finally, such commissions are an inexpensive way of conducting government oversight. Often, taxpayer activists and the business community will volunteer their time and effort to the cause. Private sector interests, for example, fully financed the Grace Commission.

If commissions make such good sense, then why aren’t they put into use more often? Despite the large amounts of waste identified, the Grace commission and others like it at both the federal and state levels have a number of drawbacks. The primary shortcoming is that their recommendations are still seldom put into practice. Even shining the light on the waste often isn’t enough to eradicate it. According to the Cato Institute’s Regulation,

“nearly $100 billion a year is spent on domestic programs that have been identified as candidates for termination by such independent agencies as the Congressional Budget Office, the General Accounting Office, and the Grace Commission…They survive, not because they serve any national interest, but because of political or parochial considerations.” (Nesterczuk, George. “Reviewing the National Performance Review.”)

Thus commissions can help serve the taxpayer agenda, but at the end of the day it still takes concerted pressure from citizens activists like those at CSE to actually move the political process. Otherwise, the whole exercise is academic.

That’s why CSE is working to build our nationwide network of activists to pressure the politicians to actually terminate wasteful programs. We hope you’ll decide to help the cause by simply calling toll-free 1-888-JOIN-CSE to find out how you can take action to cut wasteful government spending in your state.