President Biden is praising himself for reducing the deficit, even after failing to get his deficit-financed Build Back Better plan approved by Congress. I guess it’s good that he thinks deficit reduction is popular. But it’s tough for the federal government to cut back on spending, even though it ought to be an important goal when both the budget and debt are at record highs. A narrow look at the fight over select programs — such as a special spending program aimed at the Great Lakes — demonstrates why it is so hard for policymakers.
The Great Lakes Restoration Initiative is not required to restore the Great Lakes. It has no mandate to improve water quality, enhance biodiversity or even to get the lakes back to some previous and better state. There are other programs that have cleanup goals and safety mandates. There are other government groups that spend money on cleanup and safety, too. The Great Lakes Restoration Initiative is instead an effort to spend money doing something about the Great Lakes. Apply and see if you can get cash. You may be surprised to see who got funded.
It’s a fairly new program. It was created during the Obama administration as part of its stimulus efforts. And it has stuck around since.
Congress allocated around $300 million to the Great Lakes Restoration Initiative after the first year of funding and it has grown a little since. Annual funding increased to $320 million by the end of the Trump administration, and up to $348 million today. So all told, more than $4 billion has been spent on the Great Lakes from the program.
What has the federal government accomplished with this? Administrators highlight 23 different targets and outcomes in their latest plan. It seems that they’re trying their best to provide some measures around an amorphous goal given to them by Congress, and to show that they are doing something with the money.
That’s why it’s important to have a clear mandate established when the program starts. Make a clear purpose about how an activity is going to serve the public benefit. Measure progress. End it when it accomplishes the goal.
This is not how the federal government works. The creation of a spending program sets up a distorted game that is stacked against taxpayers. Federal lawmakers want to pass popular legislation, but there are bad incentives around their understanding of what is and isn’t popular, especially when money is involved.
The people who collect the cash from this program accomplish their goals better when the federal government hands out cash. They receive a concentrated benefit, and they want to keep getting it.
Meanwhile, the costs of the program are pushed onto taxpayers, both in their current tax bills and in the federal borrowing that will be paid by future taxpayers. Yet the additional costs for this program are a small part of the budget as a whole — almost laughably small. The initiative accounts for just 0.006 percent of $5.8 trillion in proposed spending.
In other words, the $340 million involved is a big deal to the people who get it, but less than a rounding error in the grand scheme of federal spending. It would be surprising to see if it got any attention at all from the poor souls who try to restrain the budget.
It can be a part of the budget theater, though. Perhaps in the attempt to show that he was interested in some budget cuts, former President Trump proposed budgets that included reductions in spending on the program.
It also demonstrates how hard it is to cut the budget. Spending interests were shocked to see that Trump wanted to cut this program. Both Republicans and Democrats criticized him for asking that this mandate-less, target-less program be reduced. They succeeded. The program remains and has only increased since.
There are important things that the federal government does. This is not one of them. By spending on the program, Congress has created an interest group that lobbies for it to continue, and only a weak interest in getting rid of it. They ought to take a stand with taxpayers and stick to the things that provide clear benefits to the public.
James M. Hohman is the director of fiscal policy at the Mackinac Center for Public Policy, a research and educational institute in Midland, Mich. Follow him on Twitter @JamesHohman.