10-1-24: Welcome to Fiscal Year 2025 – Time to Cut Spending!

by Gary Alexander

October 1, 2024

Today marks Day #1 of Federal Fiscal Year 2025. We won’t know the total deficit for Fiscal Year 2024 until about the middle of October, but it is likely to be $2+ trillion, pushing the total to $35.4 trillion.

Going back over 40 years, I remember the month we crossed $1 trillion in total debt in 1982. I thought that was a huge and unsustainable debt load then. In fact, that was so traumatic that it caused President Reagan to appoint businessman J. Peter Grace to start a commission to cut “waste, fraud and abuse.”

Soon after that, I moved to New Orleans to work for Jim Blanchard, founder of the National Committee for Monetary Reform, who ran large conferences. He invited J. Peter Grace to speak. I ended up editing Blanchard’s magazine “Wealth” 1984 to 1987 and invited Grace to summarize his commission’s findings:

““The Grace Commission has issued 47 reports, totaling over 21,000 pages and detailing 2,748 specific recommendations which could save taxpayers $424 billion over the next three years. Regrettably, about three-fourths of these proposed savings measures will require congressional action rather than the improvement of bureaucratic (line authority) efficiency.”’

–J. Peter Grace, Wealth Magazine, Winter 1984-85, “How Bad Will Government Spending Get?”

Grace and his team listed several categories of cuts in great detail in this article, almost 40 years ago. Unfortunately, that last warning (above) came true: The report’s recommendations which conflicted with entrenched federal policies were ignored by Congress. Some minor savings were finally implemented, but here we are in 2024, with candidate Trump promising to bring in Elon Musk to do the same thing again!

Well, here’s a starting point: In looking up the current funding levels, here are the actual Biden/Harris budget figures for Fiscal Year 2025 at some bloated bureaus, listed in their rising order of spending drain:

The Energy Department didn’t exist 50 years ago. It came about after the 1973 OPEC oil embargo. It currently spends $61 billion per year. On what? On watching energy prices rise? On drilling? No.

Homeland Security didn’t exist 24 years ago. It came out of 9/11. Now it spends $89 billion per year and currently brings the same inefficiency to Secret Service details that it brings to airports. Do we still need to fight yesterday’s shoe bombers? Shouldn’t airlines underwrite these costs and pass them on to airline passengers as a cost of doing business; then airline passengers could help bear the costs?

Housing and Urban Development (HUD) was formed in 1965, and I could argue that HUD created worsened housing crisis and urban ills. HUD currently spends $108 billion a year, on what?

The Department of Transportation costs $125 billion a year. What do they do? I’ll list one example below – building seven of 500,000 new EV charging stations. They seem to make travel more expensive.

The Office of Personnel Management does what? They probably enforce Diversity, Equity and Inclusion, plus their own benefits. But they cost us $136 billion a year – for a personnel department?

The Agriculture Department prints and enforces planting guidelines and such. They cost us $223 billion per year. Consider the fact that perhaps farmers know how to farm without so much help.

The Education Department spends an astronomical $278 billion a year as our educational outcomes deteriorate each year. Why does this department exist, when schools are administered locally?

I’m sure some of these bureaus do some good work, but $1.02 trillion in benefits? I know these subjects (energy, food, housing and education) are important, but are these agencies that vital, or could Americans handle these subjects locally? Could we possibly do more with less “help” via massive regulations?

The list goes on and on, but the biggest are Medicare ($1.9 trillion), Social Security ($1.5 trillion) and Defense ($872 billion) plus Veteran Affairs ($370 billion), so I will repeat Charles Krauthammer’s solution to Social Security and Medicare, that we need: (1) a higher retirement age, of 70, (2) means-testing or lower COLA benefits, and (3) tort reform and insurance reform to bring medical costs down.

A Starting Point – Stop the Waste and Hypocrisy Surrounding the Green New Deal!

Kamala Harris has promised a whole array of new benefits, which I won’t even begin to dissect here, since they probably won’t pass Congress, so let’s just look at one small (but expensive) promise that President Biden has made, but has so far failed to deliver. In 2021, President Biden vowed to build 500,000 electric vehicle (EV) charging stations in the U.S. by 2030 – a date far enough away that he has some “wiggle room” to make excuses for only delivering SEVEN charging stations so far in his first 3+ years!

That’s right! In 2021, Congress allocated $7.5 billion to build 500,000 charging stations, but only seven such stations are operational across four states. Last May, CBS’s Margaret Brennan interviewed Transportation Secretary Pete Buttigieg on “Face the Nation,” asking him why he hasn’t built more:

TRANSPORTATION SECRETARY PETE BUTTIGIEG: So, the president’s goal is to have half a million chargers up by the end of this decade. Now, in order to do a charger, it’s more than just plunking a small device into the ground. There’s utility work, and this is also really a new category of federal investment. But we’ve been working with each of the 50 states. Every one of them is getting formula dollars to do this work, engaging them in the first handful of stations…

CBS’s MARGARET BRENNAN: Seven or eight, though?

BUTTIGIEG: Again, by 2030, 500,000 chargers. And the very first handful of chargers are now already being physically built. But again, that’s the absolute very, very beginning stages of the construction to come. The reason that we’re investing federal dollars is to fill in some of the gaps in areas where it is not yet profitable for the private sector to do it.

Gee, that’s funny. When gasoline-powered cars became popular over a century ago, I don’t recall any $250 million (adjusting for inflation since then) federal program to install 500,000 gas stations around the nation by 1930. They just popped up, regardless of the “utility work” and “new investment” involved.

In case you weren’t aware, over 30% of 2027 model cars are mandated to be EVs if Harris wins. This year, only 10% of purchases were EVs. Steve Moore writes, “If about 90% of buyers still want internal combustion vehicles a year and a half now when the 2027s start hitting lots – but only 68% are allowed to have them – about a million Americans will be forced to buy cars they don’t want.’

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

I could cite other examples, such as the $42.45 billion Broadband Equity, Access and Deployment (BEAD) Act, which President Biden created in order to offer high-speed Internet to everyone, even though it seems like everyone already has a phone that disgorges high-speed bilge 24/7 without any help. (And has it occurred to our overlords that some people live “off the grid,” and in silence, by choice?).

It’s clear from long experience that government isn’t designed to do the work of free enterprise, and czars in desks 3,000 miles away can’t make decisions for 333 million Americans who know what vehicle or electronics they need or want. With millions living in large states or with long commutes in remote areas, with dismal weather and a hurricane or two, long waits at EV charging stations aren’t in great demand.

It’s time for a new “Grace Commission” with teeth, if we dare to face the alligators in the swamp.