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A Spending Reform Idea for President Trump

A Spending Reform Idea for President Trump

(Getty/Spencer Platt)

By    |   Friday, 20 January 2017 01:33 PM

When we look at the rising national debt and what’s driving it, it’s fair to say that spending cuts are likely to be a priority for President Donald Trump’s Administration. 

Trump has nominated House Freedom Caucus member Rep. Mick Mulvaney (R-SC) as new Director of the Office of Management and Budget (OMB) to lead the fight to cut spending and reform the budget process. One aspect of making America great again is to attack out of control government spending that has been around for some time, but has quickened under former President Obama. Just look at the increase in the national debt over the last eight years.

The Hill reported on January 19, 2017 “Donald Trump is ready to take an ax to government spending. Staffers for the Trump transition team have been meeting with career staff at the White House ahead of Friday’s presidential inauguration to outline their plans for shrinking the federal bureaucracy, The Hill has learned.” Plans include major reductions in funding at the Department of Commerce and Energy. Transportation, Justice and State would be cut and some programs eliminated.

The plan that closely adheres to a plan drafted by The Heritage Foundation, titled “A Blueprint for Balance,” would also privatize the Corporation for Public Broadcasting. The National Endowment for the Arts and National Endowment for the Humanities would be eliminated.Another good place to look for spending reform is the Space Act Agreements (SAA’s), which could save billions in part because SAA allows NASA to earmark contracts with little oversight, accountability or competitive bidding.

Space Act Agreements give NASA “the unique authority to enter into a wide range of ‘other transactions,’ with various partners to advance NASA mission and program objectives, including international cooperative space activities.” The SpaceX agreement provides a 20 year sole source contract “for use and occupancy of the seaside complex along Florida's central east coast. It will serve as a platform for SpaceX to support their commercial launch activities.” This contract allows SpaceX to use government facilities for the private goal of colonizing Mars.

These agreements have turned out to be little more than earmarks without competitive bidding for space launches. SpaceX has been a recipient of billions in massive handouts when space launch contracts should be put out to bid to allow smaller companies the ability to compete and take advantage of the same opportunities.

It is also a problem when NASA is granted authority to fund or provide contracts without competitive bidding outside the normal scope of congressional oversight. The constitution grants Congress the power of the purse and with that power comes the power of oversight how the money is spent. When there is no oversight and transparency, the constitutionality of these programs is called into question.

Rather than favoring large companies that are sole sourced and captive vendors, these programs should favor smaller companies with limited access to capital and those that are developing cutting edge technology. Diversifying one’s portfolio, investing or technology, can minimize over reliance and reduce risk, and in this case foster far greater technology development in the process. 

The Heritage plan would reduce the debt held by the public by $9.3 trillion over a decade. This would reduce the debt as a percentage of the economy to just over 50%. To get there, Congress is going to have to scrub every program including NASA, even though members love the space program. One step in the right direction would be for the Trump Administration to conduct a study of SAAs reform to determine the degree of taxpayer savings that could be had. Saving billions would start the process of reducing the national debt that has hit $20 trillion.

President Trump has promised to drain the swamp. In order to do this in a serious fashion, it means examining programs to cut wasteful spending, open programs to competitive bidding and question pet projects that have little to no return on their invested capital. President Trump’s appointment of Mick Mulvaney to OMB and the news stories breaking about a flood of cuts coming to government spending is a positive sign of things to come. A comprehensive plan to go agency by agency to find cuts both large and small will turn the federal government around and start the process of draining the swamp.

Christopher (Chris) Versace is the editor of the newsletter The Growth & Dividend Report and is a featured columnist to The Street.com as well as a contributor to FoxBusiness.com and Forbes.com.

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ChrisVersace
When we look at the rising national debt and what’s driving it, it’s fair to say that spending cuts are likely to be a priority for President Donald Trump’s Administration.
spending, reform, donald trump, president
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2017-33-20
Friday, 20 January 2017 01:33 PM
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