How Bureaucrats Could Solve the Budget Mess—Seriously

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.

About Murray Bessette

Murray Bessette, Ph.D. is the director of academic programs at the Victims of Communism Memorial Foundation, where he leads its educational and scholarly activities. He is the editor of two books and author of numerous articles and book chapters. He is a past president of the Kentucky Political Science Association, Lincoln fellow of the Claremont Institute, academic fellow of the Foundation for Defense of Democracies, and co-director of the Bluegrass State Intelligence Community Center of Academic Excellence.

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14 responses to “How Bureaucrats Could Solve the Budget Mess—Seriously”

  1. Economic incentive is what’s missing from the government machine. I don’t pretend to understand it all as there are people who spend their lives studying incentives but as part of a profit making company we sure get it. Our company instituted profit sharing in the 1980’s – 10% off the top distributed to employees – since then you can hear from almost everyone here at one time or another, “we shouldn’t add that step, think about the profit sharing.” It just makes everyone think a little more and have “some skin in the game.”

  2. But what about the desire for ensuring a post-retirement job at a company in the industry you deal with? Do I get a $1500 bonus now, if it will cost me $70,000 a year 5 years from now?

  3. Brilliant plan! If it’s ever implemented I’ll be sure to get a job at the Department of Transportation, and then I’ll convince my co-workers to refuse to spend the billions allotted for highway funding. Sure, we’ll be fired for not doing our jobs, but not before we get to split all that “savings” among ourselves.

    • Science, you are an imbecile.

      Are you claiming that the DOT couldn’t be more efficient?!!! That would be hilarious if not for the fact that you seem to actually believe it! Nothing says “done inexpensively” like government?!!! You are employed by government, aren’t you?

      You are pure intellectual dishonesty, aren’t you? He never said “with no other restrictions”. He definitely did not say “and they can do nothing and take the money”. The reason you must be intellectually dishonest is that you do not even believe what you say but can’t make honest arguments. Truly pitiful.

      • If you think that private enterprise is always more efficient than government, then you’ve been brainwashed.

      • Because nothing says efficiency like union employed bureaucrats with negative incentives? You didn’t even read the article. Sure, sure, there is a government agency more efficient than the private sector. Name one.

      • You are not even trying now.

        A Ponzi scheme which is illegal if not mandated by government is your idea of efficient?! So you think Bernie Maddoff is also efficient?

      • Where do you see inefficiency in Social Security?

      • When discussing wealth transfers, efficiency is nothing more than administrative costs. It isn’t like they invest the money. All they do is take payments and make payments. Do you think that among financial administrative organizations, SSA comes near the top in cost?!

        I admit that I do not specifically know SSA’s costs. I don’t need to know them to know that they are higher. The whole point of the article, which seems pretty self evident, is that government agencies lack incentives for efficiency. The SSA is a fantastic example, I am glad you mentioned it.

        If you work for a company that doesn’t produce, they go out of business and you lose your job. No matter how worthless, how unproductive, the SSA rarely fires anyone and promotes based upon seniority rather than proficiency. They can also not lose “clients” no matter how poorly they preform. No way they are among the most efficient.

  4. There was an episode of the British comedy “Yes, Prime Minister” where a variation of this plan was used to force the bureaucracy to act.
    Only in Britain they linked honors (knighthoods) to budget cuts.

  5. This won’t work. As commentor ‘Brett baker’ makes clear. A bonus vs continued employment? Continued employment will be the choice every time. The problem with the administrative state is its seeming insulation from popular sovereignty. Why not just conduct an annual binding plebiscite to allow the public to express their priorities in spending? The plebiscite would determine how 50% of national tax revenues would be used with values from 0-10. The process could be integrated into the tax filing process (which, legally, everyone has to do whether they pay taxes or not).

    • I am pretty sure we have a national plebiscite on spending. We call them “congressional elections”.