Waste Not, Want Not — but First Define Waste and Want

Posted September 28, 2009 at 2:28pm

Gallup released a poll two weeks ago that unwittingly but perfectly explains the ever-intractable politics of the federal budget. The poll, which was released Sept. 15, found that the average American believes that 50 cents of every tax dollar collected by the federal government is wasted.

[IMGCAP(1)]In a column in the Wall Street Journal published several days after the poll was released, Stephen Moore said the results indicated that a “powerful voter backlash— is brewing and Americans want a “radical shrinking— of the government. But like many others, Moore, who is a virulent anti-spender, either didn’t notice or didn’t want to see the poll’s fatal flaw: “Waste— wasn’t defined. Gallup instead left it up to each of the slightly more than 1,000 people who responded to decide that for themselves.

That’s a problem because waste means many different things when it comes to federal spending. The most basic definition — the government doing something that could be done better or for less money — is only one possibility and probably not the one most people used when they responded. For example, instead of inefficiency, someone may believe a program is completely unnecessary and, therefore, that every dollar spent on it is wasted. Others may think that any program that doesn’t benefit them personally is money Washington is pouring down the drain. Still others may think that other than defense, courts and law enforcement, everything the federal government does is wasteful.

Two federal programs that have been in the news lately illustrate why Gallup’s failure to define waste makes the poll’s findings virtually meaningless.

The first is the National Book Festival held by the Library of Congress on Saturday. This annual one-day program celebrates and promotes books and reading. Many of America’s best-known authors speak to the thousands of people who attend the festival, which is open to the public and held on the National Mall. Many corporate and other sponsors make contributions that enhance the federal resources devoted to making the festival happen. It’s almost always called a triumph rather than just a success.

But it’s not hard to understand how some might define the federal dollars spent on even this very apple-pie-and-motherhood effort as wasteful. For example, if it could be calculated, the program is probably very expensive on the basis of the cost per additional book sold or per the increase in the number of people reading. It could, therefore, be considered wasteful because it might be possible to achieve better results at a lower cost if the government distributed vouchers all over the country and let people get books from local stores. Some might consider the program to be a waste because it directly benefits only a relatively small number of people and is held in only one city. Others might believe it’s a waste because they don’t think it’s the federal government’s job to promote reading over, say, movie watching. Some might think it is waste because they don’t like the authors whose books are featured or because the language in their books offends them.

Another example is Cash for Clunkers. Some economists said the program was a waste because the cost per vehicle was too high and the impact on the economy too limited. Many theorized that the program did little more that encourage consumers who were planning to buy a new car in 2010 to accelerate their purchase to 2009. It’s a waste because the immediate positive impact will be offset by a negative effect next year. Mechanics who might have been paid to keep the clunkers running for another year or two had the cars not been turned in may believe the federal spending is a waste because it reduced their income.

On the other hand, the dealers and salespeople who sold the new cars, the automobile company workers who have to work to rebuild inventory, and the finance people who made it possible for consumers to buy and lease the vehicles may all think of Cash for Clunkers as anything but waste. The consumers with the new cars almost certainly think the federal dollars devoted to this program was money well-spent.

All of this points to the very basic tenet of federal budget politics that Moore and others typically ignore. The Gallup poll demonstrated only that it’s possible to get a majority to say 50 cents of every tax dollar is wasted. But getting those same people to agree on what spending makes up that 50 (or even 15) cents is close to impossible.

The fact that federal spending is labeled as wasteful doesn’t also mean there’s substantial support for reducing or eliminating it. Indeed, it’s not clear that the taxpayer revolt Moore predicts because of waste would be as great as the one that would occur if federal spending were cut as much as he suggests.

Rather than a desire to reduce waste, big federal spending reductions become possible because of a reduced “want— — that is, when there’s an agreement that the federal government should stop doing something. For example, military spending typically falls when hostilities end.

But we know from experience that doesn’t often happen. The federal government frequently continues to spend money on things long after the original goal has been achieved, and the fact this spending is considered wasteful by some is largely irrelevant. That’s why reducing the deficit by cutting “waste, fraud and abuse— never works: There’s seldom any agreement on what qualifies.

Therefore, the Gallup poll isn’t as noteworthy as it seems to be. The deficit picture won’t improve just because taxpayers insist on less waste. The real change will come when they don’t want the government to do as much.

Stan Collender is a partner at Qorvis Communications and author of “The Guide to the Federal Budget.— His blog is Capital Gains and Games.