Given our polarized political environment, it is a mystery how we will solve the federal budget mess. In such situations, one could do worse than to follow the maxim of Sherlock Holmes: when you have eliminated the impossible, whatever remains, no matter how improbable, is the truth. Application of this axiom to our current conundrum reveals the solution, as outlandish as it may seem, to be the bureaucracy.
Democrats and Republicans seem to agree on one thing when it comes to closing the budget gap: ‘someone’ must bear the brunt of the sacrifice—someone’s taxes should go up; someone’s spending should be cut. However, it is politically impossible to identify publically who this ‘someone’ is.
Since increasing taxes on the middle class and cutting Social Security and Medicare spending both poll exceedingly poorly, Democratic and Republican approaches to fixing the budget fall victim to public opinion. And yet, can we, as we have with so many other politically tough decisions, delegate the responsibility to the administrative state?
In the case of increased revenues, we cannot. No taxation without representation is one of the principles that kindled the fire of the American Revolution, and it was enshrined in Article I section 7 of the Constitution. There is, however, no equivalent constitutional restriction on decisions not to spend.
At first glance delegating cuts to bureaucrats appears absurd; absent direct cuts to their units, bureaucrats never reduce their budgets. Rather, they spend every dollar budgeted in one year to justify an increase in the next. Bureaucrats, then, are a force for bigger, not for limited government.
At least they are now. But like the Founders who sought security against the gradual concentration of governmental power in one branch by connecting the interest of the man to the constitutional rights of the place, so too perhaps, we may connect the interest of bureaucrats to their duty to the taxpayers. To do so is simple. We need only pass a single law that freezes federal spending and adds the following two provisos to the budget of each Department.
First, any budget surplus in a Department at the end of the fiscal year will be divided equally between the taxpayers and the employees of said Department. Second, the budget for the next fiscal year will be reduced by the amount saved by the taxpayers.
The first provision is necessary to connect the pecuniary interest of each and every civil servant to the cause of limited government. When faced with the choice between unnecessary and wasteful expenditures or providing a bonus to their employees and themselves, it is very likely that managers will choose the latter. As such, every decision throughout the year would be scrutinized to see if it was necessary to accomplish the task at hand.
The second provision is the most important from the standpoint of reducing spending over the long-term. Having demonstrated that they could fulfill their missions with less, the Departments in question would have no demonstrable need for more. Year after year, this procedure would reduce spending, while ensuring that these reductions would not adversely affect service delivery.
By connecting the pecuniary interests of bureaucrats to their duty to provide effective and efficient services to the taxpayer, meaningful reductions in overall spending can be brought about even in our polarized political situation. In the final analysis, following the logic of Mr. Holmes, our absurd situation is revealed to have an absurd solution.