Cronyism

Government Accountability Office Releases Annual Waste Report

Every year, the Government Accountability Office (GAO) releases a report, first commissioned by Sen. Tom Coburn, detailing instances of waste and duplication by federal agencies.  This year the waste totaled $95 billion.

For some perspective, the first year of sequestration cuts totaled $85 billion.  This report begs the question, why was it necessary to cancel self-guided White House tours, end the Blue Angels 2013 schedule, or furlough employees knowing there is enough duplication in the budget prevent the  indiscriminate cuts?

One could spend all day picking out line-items from the report.  It is filled with gems like the fact that military combat camouflage is redesigned by six different Defense programs for a waste of $82 million or the Commerce Department that charged other agencies over $1.5 million to generate reports that were already available through Google.

These instances of waste are as destructive to the economy as they are avoidable.  A growing trend among the states is to use “priority-based budgeting” rather than naively raising spending by percentages of the previous year, or hanging additional programs onto existing agencies like a Christmas tree.

In priority-based budgeting, legislators focus on providing core services of government.  With the revenue expectations for the given year in hand, the legislature can distribute the necessary funds to the governments highest priorities, and move on down until the expected revenue is exhausted.  This type of “budgeting for outcomes” has been successful in states such as Washington, Iowa, South Carolina, and Michigan.

Priority-based budgeting means a state has carefully considered priorities while funding essential functions.  Furthermore, it means that redundant or unnecessary programs like those highlighted in the GAO report, receive proper scrutiny.  Priority-based budgeting and other limited government solutions are available in ALEC’s State Budget Reform Toolkit.


In Depth: Cronyism

Cronyism in tax policy stifles innovation, hinders competition and introduces a deep temptation for corruption. The 2014 ALEC Center for State Fiscal Reform study, The Unseen Costs of Tax Cronyism: Favoritism and Foregone Growth, found that in the most recent year in which states published their respective tax expenditure …

+ Cronyism In Depth