Making a Good Budget Great

President Trump’s 2018 budget takes a meat cleaver to many federal programs. In my issue areas–transportation, housing, and public lands–it would end the Federal Transit Administration’s New Starts program; end funding for Amtrak’s long-distance trains; eliminate HUD community development block grants; and reduce funding for public land acquisition. There’s no high-speed rail or trillion-dollar infrastructure program, and nothing that suggests Trump would support federal funding for those things.

Trump calls this the “America First” budget. What it really is is a “Federal Funding Last” budget, as Trump proposes to devolve to state and local governments and private parties a number of programs now funded by the feds. In theory, the result should be greater efficiency and less regulation. However, in most of the areas I know about, Trump could have gone further and produced even better results.

Transportation: I applaud the elimination of New Starts, the program that gives transit agencies incentives to build expensive and obsolete transit systems, but am disappointed that Trump would continue to fund projects with full-funding grant agreements. There are several insanely expensive projects, including the Maryland Purple Line and the Minneapolis Southwest Line, that have such agreements but haven’t started construction and should be eliminated. A number of streetcar and bus-rapid transit projects also fall into this category. If Congress is willing to live with no more full-funding grant agreements, it should allow the administration to also review and eliminate projects that haven’t yet begun construction or have made only token construction efforts.

Update: It turns out that neither the Purple Line nor the Southwest Line have full-funding grant agreements, so they would die under the Trump budget. The Washington Post lists fourteen other project that lack such agreements. Of course, all of them could still be built if locals were willing to put up 100 percent of the costs.

The proposal to eliminate Amtrak long-distance trains is politically problematic. Since Amtrak’s other trains reach just 22 states, while the long-distance trains add 26 more, this proposal will look like it is favoring some states over others. As an alternative, I would have suggested that the federal government offer to cover 25 percent (or less) of the fully allocated costs (including depreciation) of each train or route, including the Northeast Corridor. If fares don’t cover the other 75 percent, then state support would be required or the trains would be cut. This is much more fair, especially because some state-supported trains actually require subsidies per passenger mile that are much larger than many of the long-distance trains.

Three other transportation proposals look good. One would transfer air traffic control to an independent, non-governmental organization, which would quickly install new equipment and increase airline capacities and safety. A second would eliminate the so-called Essential Air Service program, which subsidizes airports in smaller communities. Trump also proposes to eliminate the TIGER grant program, a relic of the 2009 stimulus bill, that has funded streetcars and other ridiculous projects.

Housing: Eliminating community development block grants would save $3 billion, which is a lot of money. This should be cut, says the proposal, because “the program is not well-targeted to the poorest populations and has not demonstrated results.” The budget would also cut $35 million for affordable housing. I support both of those cuts because I think such federal funding allows cities to do crazy things that make housing more expensive knowing they can use federal dollars to mitigate the problem by building a few units of so-called affordable housing. The budget keeps the mortgage interest deduction and most other subsidies to homeownership; these are clearly unnecessary as many other nations have higher homeownership rates than we do without these programs.

Public lands: Some of Trump’s public land proposals are vague, especially one that “streamlines operations while providing the necessary resources” to manage the lands. Less vaguely, it reduces land acquisition by $120 million (though I’m not sure what is left); fully funds fire protection at the ten-year average (which is too much money); and provides funding for national park maintenance that has been deferred. At least some of that deferred maintenance is for employee housing, which I think the Park Service should eliminate. In general, these proposals tinker at the edges of public land management. Some more radical programs, such as more user fees and contracting fire suppression out to the states by having the federal government pay the states the same as private landowners pay, could have greatly improved management and saved billions of dollars.

In short, most of Trump’s proposals on issues that I am familiar with are good. But they could have been great if the administration had taken one more step and saved federal dollars in ways that improve incentives for other parties to work more efficiently.

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14 thoughts on “Making a Good Budget Great

  1. OFP2003

    The Washington Post printed a “retweet” of something. It went something like: “Doesn’t he know meals on wheels is for people’s grandparents?”. Well, what is more cruel you not caring for your grandparents or your government not contributing to 2% of the meals on wheels budget to care for your grandparents?

  2. LazyReader

    Except Trump is shifting the cash from these programs to the Pentagon. As if they have a good reputation for financial responsibility.
    You cant rebuild the military without significant waste. The defense dept has been on the hook for nearly a trillion dollars missing. In the words of the Congressional Budget office “for years it’s tried and failed to produce a credible financial statement”. Russia poses no real threat to the US anymore. It’s economy is in total tatters, it’s foreign currency reserves nearly depleted, it’s own military is falling apart, virtually all their equipment is over 30 years old. The military can easily be trimmed without being compromised, the B2 bomber is obsolete, expensive technology, designed in the 70’s and 80’s to defeat 70’s and 80’s radar, only 20 exist and the planes now 30 years old and will require an extensive,expensive airframe upgrade. At 1/20th the cost, the B-52 is cheaper, easier to fly, can carry twice the payload and even with 50 year old engines can carry it 4,000 miles further. The US nuclear arsenal is enormous, at nearly 8,000 warheads it’s expensive to maintain and would cost a fortune to build a next generation missile. An 80% warhead reduction would save probably 80-100+ billion over 10 years and still offer a good deterrent. The US carrier fleet could be trimmed from 10 to just 7 and we’d still have a sizeable fleet capable of deployment, humanitarian aid, power projection; and save 50
    billion dollars of unnecessary carrier construction (the Ford class carrier has been wrought with design flaws, technical delays, cost overruns) and maintenance that can better be served maintaining the rest of the fleet maintaining destroyers, building new ones, retiring Ticonderoga cruiser fleet and building fast, mobile, cheaper frigates that are just as potent as they would carry the same weapons. And reinvest in the Military Sealift Command. The F-35 is the biggest disaster, we MUST CANCEL it and overhaul our F-16 or order new ones (Which Lockheed ALSO BUILDS). Intelligence spending has tripled since the 1990’s, and the growth is clearly excessive…..and the result rather than clear precise intelligence has been organizational confusion, endless array of servers chock full of terabytes of inconsequential data, IT infrastructure so vast but virtually no cyber security and mountains of paperwork nobody reads and pissing matches over satellite time and agency jurisdiction. Trimming the Pentagon’s civilian workforce….that would save 100 billion over ten years. The The medical branch of the Veterans Administration is a corrupt, incompetent boondoggle, using vouchers or medical debit cards we can save billions by allowing veterans to seek treatment at private facilities. The biggest boondoggle of all is military overseas bases in areas that aren’t conflict zones. The US military, we have an entire division of soldiers defending the border…….of South Korea (they have over 50x the GDP and 2.5x the population). The US presence in Okinawa has always been controversial, but it’s been 70 years, I doubt Japan is gonna start trouble now.

  3. JOHN1000

    Lazyreader is correct as to waste in the defense department.

    But President Trump has already showed that he is more than willing to attack waste: (a0 he immediately indicated the new fighter jets were way too expensive and his cuts will save the country billions; (b) he cut the cost for his own Presidential helicopters, again saving real $. (can you imagine Obama reducing anything spent on him and his friends and family??)

    Not perfect, but compared to where we have been, it is almost heaven…

  4. Frank

    “At least some of that deferred maintenance is for employee housing, which I think the Park Service should eliminate.”

    Why?

    Where are rangers who work at Lake Clark going to live? How about deep in the heart of Yellowstone? Chaco Canyon? Death Valley? Mineral King in Sequoia? Many parks have no viable alternatives for employee housing.

    There’s a lot of remote parks out there, and even for some that are less remote, the advantage of having park housing is that off-duty fire fighters, law enforcement, maintenance workers, wildlife technicians can more quickly respond to emergency situations and visitor needs.

  5. The Antiplanner Post author

    Frank,

    There may be a few national parks that are not located near towns that can provide employee housing, but they are exceptional (and located mainly in Alaska). National forests are just as remote as national parks, and the Forest Service stopped providing employee housing decades ago. The fact that the Park Service takes 25 percent of construction and maintenance appropriations for administrative overhead helps explain why it insists on providing employee housing throughout the park system.

  6. Sketter

    @John100
    “he cut the cost for his own Presidential helicopters, again saving real $.”

    That’s kind of a moot point when he takes trips to Mar-a-Lago every weekend, which is on the taxpayers dime.

  7. C. P. Zilliacus

    The Antiplanner wrote (with emphasis added):

    There are several insanely expensive projects, including the Maryland Purple Line and the Minneapolis Southwest Line, that have such agreements but haven’t started construction and should be eliminated. A number of streetcar and bus-rapid transit projects also fall into this category. If Congress is willing to live with no more full-funding grant agreements, it should allow the administration to also review and eliminate projects that haven’t yet begun construction or have made only token construction efforts.

    Last time I checked, buses can run very nicely on managed lanes, including HOV lanes, HOV/Toll lanes or just tolled lanes or tolled lanes with variable pricing.

    Any of these would (in general) seem to spread the cost of construction, maintenance and operation out over many more users than bus-only lanes (generally part of bus rapid transit (BRT) systems). Why build BRT when this alternative gives the buses a fast-moving route without the cost of a dedicated roadway (and frequently the buses may use tolled lanes at no charge)? Note that even the most-successful bus lane in the United States, the N.J. 495 Lincoln Tunnel Exclusive Bus Lane (XBL) is only restricted for bus-only operation during the morning peak period and serves between 1,500 and 2,000 buses every weekday morning.

  8. Frank

    “There may be a few national parks that are not located near towns that can provide employee housing, but they are exceptional (and located mainly in Alaska).”

    Disagree. Using my own parks I’ve worked at:

    First park, West Coast: 40 minutes to a town of 1,000 that has few housing rentals. One hour to the nearest small city of 20,000 that has few housing rentals due to the market.

    Second park, West Coast: Had inholding with a permanent population of 5 with no rentals. 40 minutes to very rural town (56/sq mile) of 3,000. Nearest large city with lots of rentals was 80 minutes.

    Third park, West Coast: 70 minutes to the nearest town of 40,000.

    Fourth park, Great Basin: Just a few minutes from a gateway community with a population of 500. Housing extremely limited and very expensive. 50 minutes to nearest town with a population of 77,000 people.

    Fifth park, East Coast: Housing was for seasonals only. Ferry ride to some of the most expensive housing in the US.

    There’s also the many very remote parks I’ve visited in NV and AZ and other states.

    For permanent employees who can buy, the issue isn’t as great as the seasonals who need very short term (three to six months) housing. Given that the NPS relies heavily on seasonals, there is a need for housing in remote parks. Also given that the NPS is all about AGW and preaching about cutting CO2, it would seem hypocritical of them not to cut employees commutes from two to three hours round trip to two to three minutes round trip by providing on-site housing.

    And again, since the NPS is visitor-based, it makes sense to provide housing for quicker response times.

    “the Forest Service stopped providing employee housing decades ago”

    Decades ago? Source? I found information from the 2000s that the USFS provided housing then.

    The USFS isn’t visitor-based; it’s resource-based. Less need to have on-site housing.

    Additionally, USFS HQs are often located in cities and small towns. The visitor center and HQ in Sisters is in town. Of course there are exceptions like the VC at Mt. Saint Helens, but those are the exception, not the rule, where NPS duty stations in the West are primarily in remote locations with RT commute times of 2-3 hours.

  9. LazyReader

    It’s not the civilians, and it’s not the military, it’s MIC, the absolutely corrupt like you would not believe contractors and suppliers and purchasers, the money system, $1 billion a DAY goes out the door at defense.gov/contracts, $1 billion a DAY, and that’s why there has NEVER been an independent audit done, and never will be, or Americans would burn the Pentagon down, and piss on its ashes. Rumsfeld was forced to admit September 10th, 2001 that $2,300 billion was missing, and the next day, September 11th, all of the records of the Congressional investigation were destroyed, and the Y2K backup tapes were ‘accidentally erased’. Wake the frack up!!

  10. msetty

    All the goddamn flying pigs around my house!

    I find it hard to admit that I actually agree on something with The Antiplanner. I like his plan for capping Federal funding of 25% of fully allocated expenses for Amtrak service, the remainder to be covered by fares, local and state funding. I would add three caveats:

    1. Funding should go to a particular corridor, NOT automatically to Amtrak.

    2. All services should be open to tender, like in Europe. In most European countries, “long distance” trains, e.g., intercity trains that serve intercity markets (defined as 50 miles each way or longer) generally do not receive operating subsidies and minimal capital subsidies–except for ill-considered high speed rail lines like Britain’s “HS 2.”

    3. In the longer run after a 3-5 year transition to more cost-effective operators than Amtrak (and reformed Amtrak–yes I know, an oxymoron), the Feds should limit themselves to funding major capital projects. My research and experience with private sector would-be operators indicate almost all intercity passenger services could run operating profits, though not necessarily covering major fixed capital costs.

    4. Rolling stock purchase and depreciation should be considered an operating expense, since it is an asset that is consumed by providing service. This is also standard practice in Europe, and shows up as an operating expense. This is also a way to guarantee procurement of modern equipment, rather than depending on worn-out 35-40 year old Superliners and 40-50 year old Amfleet.

  11. C. P. Zilliacus

    LazyReader wrote:

    It’s not the civilians, and it’s not the military, it’s MIC, the absolutely corrupt like you would not believe contractors and suppliers and purchasers, the money system, $1 billion a DAY goes out the door at defense.gov/contracts, $1 billion a DAY, and that’s why there has NEVER been an independent audit done, and never will be, or Americans would burn the Pentagon down, and piss on its ashes.

    We have to have a military, though I agree that we really have no idea where the money is going (and it would be nice to see a Pentagon budget (for all to see) should, at least overall, the wheres and the whats, even if “black” programs are hidden).

    Which brings me to my biggest gripe about federal spending. Not the Pentagon itself, but the intelligence community, and especially what is spent on contractors using (as their radio Help Wanted ads say, “cleared professionals”). The money paid to those “cleared professionals” on the payrolls of contractors has built many McMansions and real mansions in Northern Virginia and other parts of the United States. That (to me) is where the real scandal is, and I am not aware of any Trump effort to reduce spending there (note, not on the government employees that work for the CIA (including hazardous overseas duty in the clandestine service), NSA, NRO, NGA, DIA, the U.S. State Department and the FBI).

  12. C. P. Zilliacus

    Frank wrote:

    And again, since the NPS is visitor-based, it makes sense to provide housing for quicker response times.

    I have never understood why the NPS does not collect more fees for visiting a larger share (but not all) of its system. For example, I have paid to enter Shenandoah and Joshua Tree National Parks and Fort McHenry National Monument (the fees were modest and worth it), but most of the parks and parkways in and near Washington, D.C. have no charges at all (and note that I would not be in favor of charging people for visiting the NPS assets that make up National Capital Parks Central, including the National Mall).

  13. prk166


    Well, what is more cruel you not caring for your grandparents or your government not contributing to 2% of the meals on wheels budget to care for your grandparents?

    Exactly!

  14. C. P. Zilliacus

    Washington Post: Why does WikiLeaks keep publishing U.S. state secrets? Private contractors.

    By outsourcing key intelligence work, the government has made classified material more vulnerable.

    When WikiLeaks released more than 8,000 files about the CIA’s global hacking programs this month, it dropped a tantalizing clue: The leak came from private contractors. Federal investigators quickly confirmed this, calling contractors the likeliest sources. As a result of the breach, WikiLeaks editor Julian Assange said, the CIA had “lost control of its entire cyberweapons arsenal.”

    Intelligence insiders were dismayed. Agencies “take a chance with contractors” because “they may not have the same loyalty” as officers employed by the government, former CIA director Leon Panetta lamented to NBC.

    But this is a liability built into our system that intelligence officials have long known about and done nothing to correct. As I first reported in 2007, some 70 cents of every intelligence dollar is allocated to the private sector. And the relentless pace of mergers and acquisitions in the spies-for-hire business has left five corporations in control of about 80 percent of the 45,000 contractors employed in U.S. intelligence. The threat from unreliable employees in this multibillion-dollar industry is only getting worse.

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