- What is the effect of program cuts on specific interest groups?
At the back of my mind, my goal is really to recommend measures to ease up pressure on borrowings and so try to reduce the budget deficit for the coming year. This means spending less on most of the national budget items, including education, health, veteran benefits, international affairs, agriculture, transport, general government and justice administration. Aside from a compelling need to create operational efficiencies in all the functional areas where spending cuts are proposed, we expect some program realignments and adjustments as far as targeting the beneficiaries of these programs. Specific groups will be affected but there should be great opportunity as well for the private sector to step up and provide services in specific program thrusts.
- What programs did you choose to cut? Why did you choose those programs over others?
Again, the budget proposal aligns with the current priority area of the government, which is national defense. This function of government is the single biggest budget item, followed by social and income security and then medicare, health and education.
We have realigned the budget to support the priority thrusts of this government, allowing government units to be more operationally efficient and ease up spending on wasteful items before making drastic program cuts.
Because we see the need to cut back on deficit spending by government, the scale of spending in just about every program or department of government has been pushed down while beefing up the spending for national defense.
- Would other cuts have had less impact on people’s lives? Which budget cuts had the largest impact on reducing the deficit?
Drastic program cuts are bound to impact negatively on people’s lives, which is why we proposed deficit cuts more uniformly with the aim to make all government departments to function more effectively with fewer resources. This has meant that budget cuts on the departments with the largest budget allocation last year will make the biggest impact in the deficit reduction program.
- Which decisions might be perceived as politically motivated?
I do not know if this may be a political matter, but it should be obvious that there will be less participation from government in many spheres of domestic and international activities than there has been last year. This can be a signal for the private sector to step up and fill in the shoes of government in these areas of service.
I guess the message is we are spending less on some social services so that we can protect this country more. I think that would be a politically-motivated act.
- What are the tradeoffs of preserving some programs while protecting others?
There will be many who will be unhappy with the budget cuts that are made in many areas. But it should be stressed that these have been done to support a better national defense strategy and operations, for the benefit of everyone. The increase in national defense spending is quite substantial. Budget cuts proposed on all other services are essentially meant to create efficiencies in their operations. And only then through specific program cuts. But that will depend on the head of each program department, that is, the Secretary of the specific department.
- How do your decisions result in the marginal benefit to society outweighing the marginal cost to society?
With the way history has borne out for the Unites States, especially the 9/11 attacks, and the ever-present threat of international terrorism, the protection of the territory of the United States and its citizens and peoples is paramount. The budget cuts are a call for more efficient government operations throughout and it is opportunity as well for the private sector to provide for basic services in many markets where the government is into.
I think the decisions we made with this national budget are one that subscribe to the principle that the marginal benefit to society should outweigh the cost. The U.S. is moving away from the concept of a welfare state into one closer to the vision of the American capitalist forefathers where government interventions are few and far between. That is why we support a reduction in the budget deficit.
- If you had the opportunity to raise taxes rather than cut programs, which policy would you choose?
I would nix raising taxes at this time because of relatively high unemployment rates and falling incomes for most Americans. Cutting programs may also be counterproductive. But many of the welfare programs of the government must probably give way to job-generating and job-enhancing programs and creating opportunities and environments that allow more and better jobs for people.
References
Amadeo, Kimberly. “U.S. Federal Budget Deficit.” About.com US Economy Guide, 2013. Web. 16 February 2013. < http://useconomy.about.com/od/fiscalpolicy/>.
Thoma, Mark. “Holtz-Eakin Tries to Scare You. Don’t Let Him” Economist’s View, 14 Feb. 2013. Web. 16 Feb. 2013. < http://economistsview.typepad.com/economistsview/>.
