Dan Mitchell: Advice For DOGE: Fiscal Federalism

Source:Dan Mitchell is a Libertarian blogger & egghead.

Source:The New Democrat

“Donald Trump was a big spender during his first term in office. Even if you don’t count the orgy of pandemic-related spending, he spent more and spent faster than Barack Obama.

He even increased domestic spending faster than Obama!

But maybe his second term will be different. One positive sign is that Elon Musk and Vivek Ramaswamy are spearheading a Department of Government Efficiency (DOGE), which is a private effort to identify ways of saving money and streamlining government.

In a triumph of hope over experience, let’s make some suggestions for DOGE.

We’ll start with fiscal federalism.

Under current law, politicians in Washington send hundreds of billions of dollars every year to state and local governments. Every single penny of this spending is in areas where the federal government should have no involvement.

As part of a federalism agenda, it is time to eliminate all these transfers.

The savings for taxpayers could be enormous. Here’s a list of federal handouts compiled by my former colleague, Chris Edwards.

Nearly $1.3 trillion last year…

From Dan Mitchell

I think Never Trumper Adam Kinzinger had the perfect statement about “DOGE” last week when he said:

“To the Dems that have “warmed up to” the DOGE idea with Musk and Vivek…. This is gonna come back and bite you. They are not doing this for the right reason. It’s for control. Stop normalizing these clowns.

We are spending more on interest to the debt than national defense. Budget health is going to take bipartisan solutions.”

From Adam Kinzinger on Threads.

My point is if the modern Republican Party was serious about the national debt and budget deficit, (and they are serious problems that need to be addressed) this is what they would be talking about.

I’m not in the habit of quoting bank robbers. But when Willy Sutton was right, he was damn right. If you are interested in paying off the debt and making savings in your budget, you go where the money is:

Food Assistance, Public Housing, and Welfare, are nothing compared with the rest of the U.S. Government budget. Put those programs together in once package, you are talking about maybe 200 billion-dollars, at most.

The fiscal year U.S. Government budget was almost 7 trillion-dollars. ($6.75 trillion) The current Federal budget deficit is $1.8 trillion dollars. Can you see an intelligent, sane, sober person, who thinks chipping away at a bunch of Federal social programs, that add up 1 only 1/5 of a trillion-dollars, will finally balance the budget? You could just eliminate all those programs and still run a deficit of around $1.6 trillion dollars for 2026-27.

Now, for anyone who is still awake after seeing all these numbers and facts, (that’s right, both of you, who aren’t related to me) there are some real solutions to dealing with the budget deficit and the national debt. But to get to Adam Kinzinger’s Thread, it’s going to take some real bipartisan solutions, as well as some real solutions that aren’t that bipartisan, which is what Dan Mitchell is talking about.

The Republican Party in Congress, even in 119th Congress where Republicans will control both the House and Senate, aren’t even going to want to reform Social Security and Medicare, by themselves, let alone gut those programs. Especially with the bare majorities that they are going to have and with Congressional Democrats plotting both to win back the House and Senate in 2026.

If the Democrats win back both the House and Senate in 2026, (big if) they probably won’t have any political interest in taking on the national debt and deficit. Other than perhaps trying to roll back all of Donald Trump’s tax cuts, which they won’t be able to do themselves anyway.

The only way to deal with the national debt and deficit, is to do what the Adam Kinzinger’s of the world are talking about, which is about reforming our entitlements, to make them more cost-effective, as well as the tax code, to make it more pro-growth and less expensive for the budget, as well as reforming the Department of Defense and every other department and agency in the U.S. Government as well, to make them more cost-effective.

And what Dan Mitchell is talking about, which is what I agree with as Liberal (or a Classical Liberal, for all you pansy closeted leftists) is fiscal federalism. Which means the states would become completely responsible for running the safety net programs in their states, including Social Security and Medicare. And taking those programs off the Federal budget. But they’ll still be in existence, but just run by the states instead of the Feds. As well as work, and educational requirements, for anyone receiving any public assistance whatsoever. And there goes your budget deficit.

You can follow me on Threads, Blue Sky, and Twitter.