Blueprint for Balance: a FEDERAL BUDGE T F OR FY 20 18

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Blueprint for Balance: A FEDERAL BUDGET FOR FY 2018 The Heritage Foundation

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...... A FEDERAL BUDGET FOR FISCAL YEAR 2018 FISCAL FOR A FEDERAL BUDGET Blueprint for Balance: ...... and Natural Resources Division Firearms and Explosives of Alcohol, Tobacco, and the Community Eligibility Provision

Cut Non-Defense Spending from the Defense Department Budget Subsidies Commissary and Reduce and Commissaries Combine Military Exchanges Dependent Elementary and Secondary Schools Close Domestic Eliminate the Hollings Manufacturing Extension Partnership Manufacturing Extension Eliminate the Hollings Eliminate the International Trade Administration Administration Eliminate the Economic Development AgencyEliminate the Minority Business Development Report Measure Poverty for the Annual Supplemental Eliminate Census Bureau Funding Reduce Funding for the Department of Justice’s Civil Rights Division for the Department of Justice’s Reduce Funding Environmental for the Department of Justice’s Reduce Funding Community Relations Services Eliminate the Department of Justice’s Bureau for the Department of Justice’s Reduce Funding Eliminate the Office Services of Community Oriented Policing Eliminate Grants within the Office Programs of Justice Act Grants Women Eliminate Violence Against Eliminate the Legal Services Corporation End Broad-Based Categorical Eligibility for Food Stamps End Broad-Based Categorical Eligibility for Food Stamps and Eat” Loophole in Food Eliminate the “Heat Sugar Program Eliminate the Federal Crop Insurance Policies Eliminate Revenue-Based Access Eliminate the Market Program Eliminate the Rural Business Cooperative Service Eliminate the Rural Business Cooperative Standards for National School Meal Prohibit Funding Supply Restrictions and Vegetable Fruit for Federal Withhold Funding Programs Loss Coverage and Price Repeal the Agricultural Risk Coverage Stamp Recipients Adult Able-Bodied Requirement for Food Include Work Repeal the USDA Catfish Inspection Program Repeal the USDA Program Assistance Eliminate the Conservation Technical

Defense Commerce, Justice, Science, and Related Agencies Science, and Commerce, Justice, Agriculture, Rural Development, Food and Drug Administration, Food Development, Agriculture, Rural and Related Agencies Chapter 2: Budget Proposals 2: Budget Chapter Introduction: Blueprint for Balance Introduction: a Congressional Budget for 1: Policies Chapter Contributors Contents iv Interior, Environment, andRelatedAgencies Homeland Security Financial ServicesandGeneralGovernment Energy andWater Development andRelatedAgencies Reduce EPA Infrastructure Needs Eliminate Funding forTwo EPA ResearchPrograms Eliminate NineClimatePrograms Streamline FEMAGrantPrograms Refocus ScienceandTechnology on Meeting DHSNeeds Reduce Funding forFEMA’s Disaster ReliefFund Eliminate FireGrants Expand theDCOpportunityScholarshipProgram Protect Freedom ofConscienceintheDistrict ofColumbia Eliminate Funding PlanProgram fortheMulti-State Eliminate theExport–ImportBank Eliminate theCommunityDevelopment FinancialInstitutions Fund Reform theSecuritiesandExchange Commission Eliminate theSmallBusinessAdministration’s Disaster LoansProgram Auction Offthe Four Remaining Power MarketingAdministrations Auction Offthe Tennessee Valley Authority Liquidate theStrategicPetroleum Reserve andtheNortheastern Home Heating Eliminate DOEFunding forSmallBusinessInnovation Research ofNuclearEnergyandShiftRemainingActivities Eliminate theDOEOffice ofFossilEliminate theDOEOffice Energy andRenewable Energy ofEnergyEfficiency Eliminate theDOEOffice ofElectricityDeliverability andEnergyReliability Eliminate theDOEOffice Eliminate DOEEnergyInnovation Hubs Reduce Funding fortheDOEBasicEnergySciencesProgram Drastically CutorEliminatetheDOEBiologicalandEnvironmental ResearchProgram ResearchProjectsAgency–Energy Program Eliminate theDOEAdvanced ScientificComputingResearchtoFY2008LevelsReturn Advanced Return Funding ofNuclearPhysics toFY2008Levels fortheDOEOffice Focus theDepartmentofEnergy’s NationalNuclearSecurityAdministration End Renewable EnergyMandatesintheDepartmentofDefense Reform theBasicAllowance forHousing Reduce Excess BaseInfrastructure Return to2011Levels DefenseAgencies Increase UseofPerformance-Based Logistics Reform MilitaryHealth Care Spending onWeapons Programs and Using Private-Sector Developments and UsingPrivate-Sector and GasolineSupplyReserves and SmallBusinessTechnology TransferPrograms ofScienceandCivilianRadioactive Wasteto Offices Management ofScience and ShiftRemainingProgramstoOffice ...... The Heritage Foundation | Foundation Heritage The ...... heritage.org ......

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96 95 94 91 90 89 88 84 83 82 81 80 79 78 74 73 72 71 69 68 67 66 65 64 62 61 60 59 58 55 54 53 52 51 50 Contents

Eliminate Six Redundant EPA Programs...... 97 Reduce Funding for the EPA’s Civil Enforcement Program...... 98 Reduce Funding for the EPA’s External Civil Rights Compliance Office/Title VI...... 99 Reduce the EPA’s Legal Advice on Environmental Programs...... 100 Eliminate the EPA’s Stratospheric Ozone Multilateral Fund...... 101 Eliminate the EPA’s Information Exchange/Outreach Programs...... 102 Eliminate the Land and Water Conservation Fund...... 103 Eliminate the National Clean Diesel Campaign...... 104 Eliminate Environmental Justice Programs...... 105 Eliminate the National Endowment for the Humanities...... 106 Eliminate the National Endowment for the Arts...... 107 Eliminate Funding for Woodrow Wilson International Center for Scholars...... 108 Rein in the EPA’s Ozone Standard...... 109 Allow Development of Natural Resources...... 110 Prohibit a Net Increase of Federal Lands...... 111 Eliminate Funding for the John F. Kennedy Center for the Performing Arts...... 112 Labor, Health and Human Services, Education, and Related Agencies Privatize the Corporation for Public Broadcasting...... 116 Eliminate Job Corps...... 117 Eliminate Workforce Innovation and Opportunity Act Job-Training Programs...... 118 Let Trade Adjustment Assistance Expire...... 120 Eliminate Susan Harwood Training Grants...... 121 Eliminate the Corporation for National and Community Service...... 122 Bring National Labor Relations Board Funding in Line with Caseloads...... 123 Sunset Head Start to Make Way for Better State and Local Alternatives...... 124 Eliminate Competitive and Project Grant Programs and Reduce Spending on Formula Grants...... 125 Reduce Funding for the Department of Education Office for Civil Rights...... 126 Eliminate Redundant Department of Labor Agencies...... 127 Eliminate Funding for the Institute of Museum and Library Services...... 128 Redirect Funding from Planned Parenthood to Health Centers Not Entangled with Abortion Services...... 129 Continue to Restrict the ACA Risk-Corridor Program Funding...... 130 Direct the Department of Education to Rescind the “Gainful Employment” Regulations Promulgated on For-Profit Higher Education Institutions...... 131 Protect Freedom of Conscience in Health Care...... 132 Stipulate the Use of Fair-Value Accounting...... 133 Allow K–12 Education Costs as Qualified Expenses Under 529 College Savings Plans...... 134 Halt Implementation of the Union-Persuader Regulations...... 135 Halt Implementation of Occupational Safety and Health Administration Recordkeeping Regulations...... 136 Halt Implementation of New Overtime Regulations...... 137 Stop the NLRB from Using the Joint Employer Redefinition...... 138 Give Workers Time to Make an Informed Choice in Union Elections...... 139 Stop Gerrymandered Bargaining Units...... 140 Repeal the ACA’s Enhanced Federal Funding for the Medicaid Expansion...... 141

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 v vi Multiple Subcommittees Military Construction, Veterans Affairs,andRelated Agencies Legislative Branch Withhold GrantsforSeizure ofPrivateProperty Standards Enforce Data-Quality Prohibit Funding Rule forthe“Waters of theUnitedStates”(WOTUS) fromRegulatingGreenhouseGasEmissions Prohibit Any Agency Prohibit Government DiscriminationinTax Policy, Grants,Contracting, Eliminate Federal Funding forSanctuaryCities Limit ApplicationoftheRecapture Permits Provision forDredge-and-Fill Maintain Existing ofFillMaterial” Definitionof“FillMaterial”and“Discharge Repeal theDavis–Bacon Act Stop Paying Federal Employees WhoWork forOutsideOrganizationsontheClock Narrow EligibilityforVeterans’ Disability Compensation Eliminate ConcurrentReceipt ofRetirement Pay End EnrollmentinVA Medical CareforVeterans inPriorityGroups7and8 Eliminate Funding fortheJohn StennisCenter Reduce Funding fortheU.S.CapitolPolice Eliminate Funding forSpecialCongressionalSubsidies Return ControlandFiscalResponsibilityforLow-Income Housing Strengthen Work RequirementsintheTemporary Assistance Reduce Fraud Penalties andMarriage intheEarnedIncomeTax Credit, InflationIndexforSocialSecurity aMoreAdopt Accurate Eliminate SupplementalSecurityIncomeBenefitsforDisabled Children PaymentModify Medicare Advantage System with Harmonize Medicare’s ofEligibilitywithSocialSecurity’s Age Expand CurrentThresholdforMedicare Income-RelatedSubsidies Update Medicare Premiums Unify Medicare Physician andHospital Programs Convert theCadillacTax Health Benefits toaCaponEmployer-Sponsored End Provider Taxes inMedicaid Disaggregate Medicaid Spendingby Population Category a Competitive, Market-Based System and PutFederal Medicaid SpendingonBudget and Accreditation Under CleanWater Regulations Act by Excluding CertainDisabilities UnrelatedtoMilitaryDuties and Disability Compensation forVeterans for theACA’s Health InsuranceExchange to theStates for NeedyFamilies Program and Fraud ChildTax intheAdditional Credit and OtherMandatoryPrograms ...... The Heritage Foundation | Foundation Heritage The ......

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State, Foreign Operations, and Related Programs End Funding for the United Nations Development Program...... 184 Eliminate the Overseas Private Investment Corporation...... 186 Eliminate Funding for the United Nations Population Fund...... 188 Enforce Cap on United Nations Peacekeeping Assessments...... 189 Return the United Nations Relief and Works Agency for Palestine Refugees in the Near East to Its Original Purpose...... 191 Eliminate Funding for the Paris Climate Change Agreement...... 192 Eliminate Funding for the Global Environment Facility...... 193 End Funding for the United Nations Intergovernmental Panel on Climate Change...... 194 Eliminate the U.S. Trade and Development Agency...... 195 Enforce Funding Prohibition for the United Nations Educational, Scientific, and Cultural Organization...... 196 Maintain the Prohibition on Funding United Nations Organizations that Grant Full Membership to the Palestinian Territories...... 198 Oppose Bailouts for the International Monetary Fund and Insist on Rules-Based Lending...... 199

...... Increase Oversight of International Organizations 200 Transportation, Housing and Urban Development, and Related Agencies Eliminate the Essential Air Service Program...... 204 Eliminate the Appalachian Regional Commission...... 205 Eliminate Subsidies for the Washington Metropolitan Area Transit Authority...... 206 Eliminate Grants to the National Rail Passenger Service Corporation (Amtrak)...... 207 Close Down the Maritime Administration and Repeal the Maritime Jones Act...... 208 Eliminate Capital Investment Grants...... 209 Privatize the Saint Lawrence Seaway Development Corporation...... 210 Eliminate the National Infrastructure Investment Program...... 211 Eliminate the Airport Improvement Program and Reform Airport Funding...... 212 Phase Out the Federal Transit Administration...... 213

Chapter 3: The Budget Process...... 215

Summary Table of Recommendations...... 221

Appendix...... 227

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 vii

ix A FEDERAL BUDGET FOR FISCAL YEAR 2018 FISCAL FOR A FEDERAL BUDGET is Research Fellow in Empiricalis Research Analysis Policy Fellow for in the Center is William in American Research E. Senior Simon Fellow Principles and Public is Research Fellow in Financialis Research Fellow Regulations in the Roe Institute. is Senior Fellow for Health Studies Community, inPolicy for the InstituteFamily, for Fellow is Senior is Senior Policy Analyst Policy is Data Senior Analysis, for in Simulations the Center for the of Blueprint for Balance: is Director of the Center for Health Policy Studies and Preston A. Wells, Jr. Fellow at at Fellow Health Studies andis Policy Director for Preston Jr. the A. Center of Wells, is Senior Policy Analyst Policy is Senior in Budgeting the Policy Allison Defense for Center. is Director of Education Policy Studies,is and Policy Director Will Education of Skillman the in of Education, Fellow is Senior Fellow in Economic Policy in the Policy Roe Institute. in Economic Fellow is Senior is Herbert and Joyce Morgan Fellow in Free Energy for and Center Fellow Environmental Morgan andis Herbert Joyce Policy, is Senior Policy Analyst Policy is in Senior Economics the Roe Institute. in Entitlement is Deputy Director the Thomas of A. Studies, and Policy Roe Institute Grover Economic for is Research in the Assistant Policy Roe Institute. Budget Economic for is Director of the B. Kenneth Simon Center for Principles and Politics, and AWC Family Principles and and Politics, AWC for is Director Center the Simon B. of Kenneth is Research Associate in the DeVos Center. is Research Associate in the DeVos is Senior Research Fellow in the DeVos Center. in the DeVos Researchis Senior Fellow is Policy Analystis Policy Security Homeland in for the Douglas and Cyber and Policy, Sarah Allison is Senior Policy Analyst Policy is Senior in Fiscal Affairs in Roe Institute.the is Research Fellow in Agriculturalis Research Fellow Free Markets for in and the Policy Center Regulatory is Jay Van Andel Senior Policy Analyst Policy Andel Senior Van Free Marketsis in for Jay in and Trade the Policy Center is Senior Research Fellow in Free Regulatory Markets Researchis for Senior and the Center Fellow at Policy

Robert Rector Bryan Riley Regulatory Reform. Nina Owcharenko The Heritage Foundation. and Opportunity. and David B. Muhlhausen, PhD, Analysis. Data Norbert J. Michel, PhD, PhD, Michel, J. Norbert Robert E.PhD, Moffit, Nicolas D. Loris D. Nicolas Markets and Regulatory Reform. Mollie McNeill Diane Katz Regulatory Reform. Melanie Israel Johnson Justin T. David Inserra the Kathryn of Policy, Cullom and Davis Shelby Foreign Institute Security National for for Center and Foreign Policy, at The Heritage Foundation. David R. Burton Drew Gonshorowski Institute for Economic Freedom. Lindsey M. Burke and Community, Opportunity.Institute Family, for Foundation Fellow, of the Institute of Constitutional for Foundation. The Heritage Government, at Fellow, Foundation Daren Bakst Freedom. the Institute of Reform, Economic for Community, and Opportunity, at The Heritage Foundation. David Azerrad Justin Bogie Anderson, PhD, Ryan T. and Religion Civil the for Institute of Family, Center Society, for in the Richard DeVos Policy, and Helen M. Hermann Research Fellow, of the Institute for Economic Freedom, at The Heritage Foundation. The Heritage Freedom, at the Institute of Economic M. for Hermann Research Fellow, Rachel Greszler their employment with The Heritage Foundation. The title listed with reflectsFoundation. The Heritage mostthe title individual’s recent their employment during that time. Romina Boccia The following individuals, both current staff, Heritage and former during to contributed thispublication Contributors x Whiting Tori K. Government. for Constitutional of Institute the Studies, Meese Judicial IIICenter and forEdwin Legal von Spakovsky Hans Tubb Katie Spoehr Thomas James Sherk SheffieldRachel Senger Alyene Thatcher Center Institute. for of Freedom, Davis the Margaret D. SchaeferBrett Michael Sargent Reform. Regulatory and Roberts James M. is Policy Analyst for Energy and Environmental Issues in the Roe Institute. Roe the Issues in Environmental and for Energy Policyis Analyst is Senior Policy Analyst in Labor Economics Labor for in Center the for Analysis. Senior Data is Policy Analyst is Policy Analyst in Health Policy at Center Studies the Health in for Policy Studies. Health Policyis Analyst is Director of Center the for Director Institute. is National Defense of Davis the is Policy Analyst in the DeVos the in Policyis Analyst Center. is Research Assistant in the Center for Free Markets and Regulatory Reform. Regulatory Center the and in for Markets Free Assistant Research is is Research Associate in the Roe Institute. Roe the in Associate Research is is Jay Kingham Senior Research Fellow in International Regulatory Affairs, in the in Affairs, Fellow Senior Regulatory Research International in Jayis Kingham is Research Fellow Center Research the is in for for Markets Free Economic Growth Freedom and is manager of the Election Law Reform Initiative, and Senior Legal Fellow Senior Legal and the Reform of Law Election the in Initiative, manager is The Heritage Foundation | Foundation Heritage The heritage.org - - 1 , would strengthen America’s Blueprint , ed. Dakota by (Washington: L. Wood of sounder financial sounder of management. Thisonly is a and communities,only first a step in reordering therelationship between citizen and government. first step toward returning to Statespower the Congressional adoption of the recommendations Social and Economic Trends Shape America that Economic and Social A.ed. Jennifer by Marshall and Christine Kim (Washington: 2016); Foundation, The Heritage and Strength: U.S. Assessing of Military Index 2017 Common the for Provide to Ability America’s Defense The Heritage Foundation, 2016). 2016 Index of Culture and Opportunity: and The Culture of Index 2016 We’re not cutting not the sake for simply the We’re budget The federal budget should be a reflection of the of be a reflection the should The federal budget Ȗ Ȗ principles of the American of principles within people the con set forthset in this straints constitutional of The budget government. economy, society,economy, and defense. clarifies delineates priorities, on fundamen positions as to economic freedom and prosperity. As President As freedomas and President prosperity. to economic and insight provides into Americans’ moral character. also should a budget andallocate resources.However, tal issues, reflectsgovernment, of the on role the views illustrate to individual a commitment rights as well Ȗ Ȗ Ronald Reagan said in 1981: At the most basic level, a budget isplana to a budget collect theAt basic level, most A FEDERAL BUDGET FOR FISCAL YEAR 2018 FISCAL FOR BUDGET A FEDERAL ------

A FEDERAL BUDGET FOR FISCAL YEAR 2018 FISCAL FOR A FEDERAL BUDGET , ed. by Blueprint for Balance: , provides detailed recommendations for providesdetailed, for recommendations

thing does by does, it the federal government udgeting is anessential governing. act of Every 2017 Index of Economic Freedom: Promoting Economic of Index 2017 Opportunity Prosperity and Economic Terry Miller and Anthony B. Kim (Washington: The Heritage Foundation, 2017); In order for Americans for In order to better achieve lives, Con Blueprint for Balance: A Federal Budget for Fiscal Fiscal for Budget Federal A Balance: for Blueprint Ȗ stronger economy, a stronger society, and a stronger and stronger a society, stronger a economy, stronger should put the budget on a pathtoa balance, on the budget while put should strengthening national defense and without raising scope of America’s budget has directa budget America’s scopeof impact on es the strength of America’s economy, society, and society, es the strength economy, America’s of and hasdefense improvement, great found for need defense. The Heritage Foundation regularly assess Foundation The Heritage defense. dards—for all Americans. damental level, the budget enables Congress enables todamental estab the budget level, either taxingeither spending. regulatory or Even agencies gress take must steps to allow Americans to build a as reflected in the: are andto produce regulation enforce able when only affects its federalevery of and government the facet taxes, to enable economic growthtaxes, economic to enable to raise living stan the annual congressional On the fun most budget. their dreams.their how Americanshow their fami are for to provide able relationship to the Americanrelationship The size and people. lish a comprehensive governing philosophy. Congress governingphilosophy. lish a comprehensive lies, contribute tolies, their contribute communities, and pursue Congressfunds their activities. As such, budgeting Ȗ

Year 2018 Year B

Blueprint for Balance Blueprint Introduction: The country cannot and should not sustain the cur the should and not sustain cannot country The 2017 to 2027 period, piling on2017 even piling 2027 more to period, debt. 3. 2 2. Congress should determine whether: determine should Congress well-connected or lock peoplewell-connected low into incomes by 1. 52 percent of the entire amount of the discretionary 52 percent of discretionary of amount entire the the finances in order. Congress can do this by immedi by in this order.do can finances Congress its currently planned trajectory, it will spend at least trajectory, it will planned currently its Congres the to According $20 approaching trillion. is governmentment, the beyond huge and borrows sums reforming mandatory spending programs. spending mandatory reforming steps to reduce mandatory spendingmeaningful by government’s paymentthe on adown putting make in available opportunities the must take and it can borrowing. rent of excessive and course spending has expanded its scope to virtually every part of the part every virtually to scope its expanded has uses taxes and borrows money borrows pay and to for excessive taxes uses the annual budget appropriations to and processes annual the government the that must pay 2027 represents in $768to 2027. in billion $768 That interest in billion 2016 $241 in billion from increasing 10 next years, the government The taxpayers. from it amount takes the ately reducing discretionary spending and taking taking and spending ately discretionary reducing over collect the it will moreanother $10 than trillion double within five years, and more than triple andover than more five years, double within economy,trajectory. Tax on fiscal is a dangerous and unprecedented size, an to grown governmenteral has spending projected forspending government the year. that in on the if government Budgetsional Office, remains benefit that the programs many including spending, penalizing work. As of March 2017, of March work. As debt national the penalizing payers pay enormous of money amounts govern the to federal program in developing in 2018 FY budget. the program federal Annual debt-service payments are expected to expected payments debt-service are Annual fed The point. acritical have reached Americans While Congress cannot solve everything at once, solve everything cannot Congress While The program would be better administered by administered would better be program The American the serve would better program The would increase program’sThe elimination We can make government again responsive to the the to responsive government again We make can Congress should use four criteria to assess every every assess to should four criteria use Congress the private sector; private the opportunity or reduce favoritism; reduce or opportunity ensuring that its legitimate functions are per are functions legitimate its that ensuring state or local governments; or orstate local people if it were administered and financed by financed and people it were if administered people by cutting its size and scope and thereby and scope and size its people by cutting formed efficiently justly. efficiently andformed 1 The Heritage Foundation | Foundation Heritage The ------“The power over the purse may, in fact, be regarded as power as over“The may, regarded be purse the fact, in American values, and a strong national defense. By national astrong and values, American 4. Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Constitution unequivocally grants Congress the exclu the Congress grants unequivocally Constitution Congress can produce economy, astrong can Congress astrong with congressional budget plans. The American peo American budget The congressional plans. with 58 that providing budgetary powers to Congress was was powers Congress to budgetary providing that 58 legislation that brings current law into compliance compliance law into current brings legislation that limited government, individual freedom, traditional traditional freedom, government, individual limited for excuses not make advancing to process liamentary reducing debt and putting the fiscal house in house order, fiscal the debtreducing putting and interests. for special rolling aimed at avoiding machine tuned afinely is ington use the budget process to promote enterprise, free tatives of the people for obtaining a redress of every of every a redress of people the tatives for obtaining which with weapon most completethe effectual and the policies it was elected to pursue. Congress should Congress pursue. to elected policiesthe it was and say one representatives Congress thing their in any constitution can arm the immediate represen immediate the arm can constitution any rights: individual elementa critical maintaining in grievance, and for carrying into effect every just and just every effect into for and carrying grievance, in government. Jameswrote Madison gimmicks to mask overspending, and stop using par stop using and overspending, mask to gimmicks do another. However, Wash for well-connected, the salutary measure.” salutary forsive power operations the appropriate to of funds society, America. astrong and ple have lost trust in Washington, in part because because part in Washington, in ple have lost trust objectives. The policy important advance to process principled arguments and keeping the gravy train train keeping gravy the and principled arguments Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ The program is wasteful or duplicative. wasteful is program The The federal budget federal The for 2018 FY presented here will: and limit opportunity. limit and Eliminate programs and process; budget Eliminate budget gimmicks deficit by $9.0over trillion 10 years; spending Reduce budget the Balance Cut taxes needs; security national funding spending in Slow growth the Congress should prepare honest budgets and pass pass and budgets honest prepare should Congress appropriations should annual the use Congress Congress must end budget of using practice the Congress heritage.org by more than $1 trillion over 10 $1 years; trillion by more than by $10.0 trillion and cut the the cut by $10.0 and trillion within seven years; within that produce that favoritism and improve the and , while fully fully , while Federalist Federalist No. No. - - - - - Introduction: Blueprint for Balance

CHART 1 Heritage Blueprint Would Save Billions Compared to CBO Projections

BUDGET SURPLUS/DEFICIT BILLION HERITAGE BLUEPRINT SURPLUS DEFICIT

–

CBO PROJECTIONS – FY

DISCRETIONARY DEBT HELD BY OUTLAYS SPENDING THE PUBLIC TRILLION TRILLION GDP CBO CBO CBO

HERITAGE HERITAGE BLUEPRINT BLUEPRINT HERITAGE BLUEPRINT

FY FY FY

SOURCES: Congressional Budget Oce, “The Budget and Economic Outlook: 2017–2027,” January 24, 2017, https://www.cbo.gov/publication/52370 (accessed February 16, 2017), and Heritage Foundation calculations. heritage.org

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 3 4 1. ENDNOTES “Our Philosophy: Address by President Ronald Reagan to theConservative Political Action Conference,” The AmericanConservative Union, March 20, 1981,http://conservative.org/found-conservatism/philosophy/ (accessed January22,2016). The Heritage Foundation | Foundation Heritage The heritage.org ------5 Congress should pri Congress spend reduce should Strong National Defense. National Strong Balanced Budget. Congress also should Reserve review pol Federal bilities after current years cuts. Under defense of for the debt accumulated thethe debt plan before for is enacted. from $293 billion in 2018 to $513 billion to in to $513 billion pay in 2027 from 2018 $293 spending before even more debt is added to the is fed added debt more even spending before sion of the American of sion dream. This outlines chapter eral balance sheet. oritize national security spending to fund critical needs anddefense begin rebuilding military of capa opportunity all for Americans their to ver achieve specialof interests into the lives and the government the Americanof The proposals people. outlined here the annual including deficit However, enactment. of gressional budget. and businesses to expand and enhance the economy the major policy objectives that should guide that policy should objectives the con the major thisproposal, debt-service grow would payments matters infrastructure, of natural resource manage and welfare education, ment, principally to states and icy and restrain the central bank’s discretion. Reduc ing harmful regulations will entrepreneurs enable ing, taxes, cut and protect the the nation, reach reduce withinincludinginterest payments) the firstyear interest will payments reach balance not until2024 inreductions federal spending Under and taxation). localities and the private sector. would balancewould not the primarydeficit (the deficit take growthwould economic of account sparked by In reviving true federalism, Congress leave should This proposal illustrates is so critical it why to reduce (or perhaps earlier perhaps with a dynamic(or calculation that - - - - -

A FEDERAL BUDGET FOR FISCAL YEAR 2018 FISCAL FOR A FEDERAL BUDGET

Blueprint for Balance:

ach year, Congress year, ach is required to pass budget a resolution that addresses the entiretyresolution the fed of Congress should repeal Obamacare and reform repeal Obamacare and reform should Congress Congress should put the budget on a patha toward on the budget Congress put should To strengthen civilTo Congress pro should society, The budget resolution also sets resolution the stage for The budget With nearly trillion $20 in national and debt, an balance econom and enable to debt reduce in order of the government’s financial spending the government’s of problems: and Sustainabledebt. is a bipartisan budgeting problem. dollars than to more a trillion dollars the end before a critical presents resolution the the decade, budget of opportunity Congress for to address drivers the key compliancewith to be fast-tracked in the resolution enabling Congress through to follow its vision on eral all budget: spending and all taxes. While the bud get resolution does not carry does not is key a it resolution get law, of theforce affordable healthaffordable care focusedthat is on the unique annualprojected to grow a deficit halffrom trillion and the years ahead. and establish policy goals the following for fiscalyear Social Security, and welfare. Congress ensure should tect religious liberty. life and and defend conscience that America’s veterans receive quality, timely, and veterans that quality, America’s receive timely, the major entitlement programs: Medicare, Medicaid, entitlement the major tool for Congress to lay out its vision for the nation the Congress nation its vision for for tool out to lay needs of service-related conditions. national defense. ic growthic to raise living standards all for Americans, iation, which allowsiation, a bill to bring current into law while reducing thetax and burden strengthening with separate legislation, especially reconcil budget Congress, and makes filibuster-proof it in the Senate.

Congressional Budget Congressional Chapter 1: Chapter

E Policies for a for Policies America’s enemies. America’s The Heritage Foundation’s Heritage The 6 Congress should increase defense pre should to spending increase Congress weak military and invites further provocations from further invites and military weak and expand to Presidentwork Trump with Donald itary Strength Strength itary law, the fiscal year (FY) 2018 defense (FY) budget level year law, fiscal the least economically damaging manner. The U.S. sys manner. U.S. The damaging economically least ranked the 17th-freest economy 17th-freest the world, the in reg ranked should Congress modernization. investments in below well is needed defend to is what country. the and below 2017is terms, FY the level nominal in it dropped in 2010—Congress can make substantial substantial make can 2010—Congress in it dropped offree”— “mostly the ranks the rently in deeply mired The burdens. tax and regulatory soaring including United America’s the States. in competitiveness in lowest its economic score sinceistering freedom harms economic growth, productivity, job productivity, creation, economic growth, harms much is system more economically tax the and high, uted to the continuing decline of economic decline continuing freedom the to uted tem fails Americans on both fronts: Taxes are too too are on Taxes fronts: both Americans tem fails duties of feder the prescribed constitutionally the budget. this in proposals the second-tierthe which into economic status freedom economic byanemic world, the the recov shown as the tion’s defense budget a weak a to safe, leads keep U.S. to the defense astrong budgetty. not alone is While enough al government. Revenuesal the in should collected be business and reduced individual has corruption and readiness. and due to cuts to capacity, which hurt both capability capability both capacity, to due hurt cuts to which destructive than it should be. than destructive fund to revenues only those necessary raise to exist economy.theconfidence cur is in the U.S. While U.S. been undermined Great the since Recession, has ery levelhigh and a of deficitspublic debthavecontrib of the nine in declined dom United has the States in defense, national our shortchange of to continuing strengthen the military and improve securi and national military the strengthen make and readiness, capacity, increase military serve for defense. increase Instead funding significant past 10 years. According to The Heritage The Founda to According 10past years. progress in restoring economic by adopting freedom restoring in progress perception of government elite privilege, cronyism, by the increased size and scope of scope government, the and size by increased the The U.S. tax code’s complexity and structure code’s structure tax complexity U.S. and The To begin rebuilding the military will require a Pro-Growth Tax Reform. Reform. Tax Pro-Growth Freedom. Economic Restoring Index 2017 Freedom of Economic Index was first published in 1994. Large budgetLarge in 1994. published first was rated the U.S. military as “marginal” “marginal” as military U.S. the rated 2017 Index Mil of U.S. Federal taxes should Federal taxes Economic free Economic The Heritage Foundation | Foundation Heritage The ,

the U.S. is U.S. the ------would alleviate the harm caused by the tax system system by tax the caused harm the would alleviate with helping implement to with fed policies federal using improve the incomes of Americans, and enhance their their enhance and improve incomes the of Americans, impose crushing costs on the U.S. economy on U.S. the costs soci and crushing impose also regulators by federal imposed Rules ington. of federal the function out aconstitutional not carry policies of these acondition acceptance state making adopt to induce to states preferred its policiesing by stop try should also Congress areas. of each these in restorereforms constitutional that will governance must propose issue-specific Congress areas, many people. do States ican not do. rights—people possess the excessive growth of the federal government. of federal Con the excessivethe growth government. federal the treat the states as administrative sub-units tasked tasked sub-units administrative as states the treat citizens. their power, limit to but competition create to among the should not belief, the federalism in be popular to trary against saving and investment; eliminate tax prefer tax investment; eliminate and saving against a consumption tax rates; establish business tax and the econthe of size expand therebyand significantly reform tax Fundamental increases. wage real and government, or that otherwise ought to be handled handled ought be to government, or otherwise that eral system, a federalism that has eroded steadily with with eroded steadily has that a federalism system, eral tax U.S. the make and system; tax the ences; simplify opportunities. economic omy. would substantially Stronger economic growth costs increased by over $100 increased annually. billion costs alone, these Administration Obama the ety. During by Wash on burden Americans imposed of total the revenues and only one spending constitute part eral Rather, Congress funds. federal receiving of states’ now is involved so Congress in Because funds. eral not and responsibilities constitutional core its on thereforeshouldstates Constitution, the of confines stand how much they are paying every year to fund fund to year every how paying muchstand they are under taxpayers that so moresystem transparent should leave to the states those programs that do that programs should those leave states the to incentives for thereby creating states, them enact to of Amer the service the but in of states, in the service policies that retain and attract citizens. Within the the Within citizens. attract and policies retain that for the traditional role of states in this country’s fed country’s role this in of states for traditional the base that the current system uses; eliminate the bias bias the eliminate uses; system current the that base hybrid the income-consumption tax rather than base, by states. of needs the serve best policies enact to that free be To revive true federalism, Congress should focus should focus Congress federalism, To true revive True Federalism. Federalism. True reform should lower tax individual Fundamental Properly understood, federalism aims not only aims federalism Properly understood, No Hidden Taxes Through Regulation. Regulation. No Hidden Through Taxes heritage.org The U.S. should restore respect Fed ------Chapter 1: Policies for a Congressional Budget

Congress, along with the new President, must example of its long history of propping up failing reverse this out-of-control regulatory growth. It firms—throughout its history, the Fed has operated should start by repealing the harmful and unnec- within a purely discretionary policy framework. essary rules that have been imposed on Americans. Congress should reduce the Fed’s discretion in These range from restrictions on Internet providers monetary policy and direct the central bank to imple- to Obamacare health insurance mandates to costly ment rules-based policies that move the U.S. toward a limits on energy production and greenhouse gases. truly competitive monetary system. Congress should Next, Congress should require that every major new also review the effectiveness of the Federal Reserve rule be approved by the House and Senate before tak- with a formal commission. Finally, Congress should ing effect. Moreover, existing rules should be subject require the Fed to announce a plan detailing how it to automatic expiration (often called “sunsetting”) if will normalize its balance sheet and dispose of the not specifically renewed after a certain time. government-sponsored enterprise (GSE) securities Support for Entrepreneurship Through it bought. Reformed Securities Laws. A morass of securities Promotion of the Freedom to Trade. The free- regulations impede capital formation, dispropor- dom to exchange goods and services openly with oth- tionately harm small and start-up businesses, and ers is the foundation of America’s modern economic reduce innovation and economic growth. Securities system, which provides historically unprecedent- laws should focus primarily on the core mission of ed opportunities for individuals to achieve greater deterring and punishing fraud, and require reason- economic freedom, independence, and prosperity. able, limited, scaled disclosure by widely held firms of According to data in the annual Index of Economic material information required by investors to make Freedom, countries with low trade barriers are more informed investment decisions, such that larger and prosperous than those that restrict trade. Open even more widely held firms are subject to greater dis- trade fuels vibrant competition, innovation, and closure requirements. economies of scale, allowing individuals, families, The modern securities market is generally inter- and businesses to take advantage of lower prices and state in character, and therefore most primary offer- increased choice. ings, secondary markets, and broker-dealers should The United States has trade agreements with 20 be subject only to the federal regulatory regime, while countries around the world that reduce most taxes state securities regulation should be limited to intra- on imports from these countries to zero. These agree- state offerings and anti-fraud enforcement rather ments cover only about 36 percent of U.S. annual than offering registration and qualification. The law imports, and Congress should further eliminate trade should allow the development of robust secondary barriers and protectionist policies to increase Amer- markets in the securities of smaller companies by icans’ economic freedom. Nearly half of U.S. imports improving existing secondary markets for small pub- are intermediate goods (goods that are components lic companies, establishing a regulatory environment used in making other goods), and U.S. manufactur- that enables venture exchanges, and reasonably reg- ers rely on these imported inputs to create American ulating the secondary sales of private securities. Reg- jobs and to compete in the global marketplace. The ulators should not engage in “merit review” or man- government should boost manufacturing by elimi- date particular portfolio choices; regulators should nating all taxes on imports of intermediate goods. not substitute their investment or business judgment Because the government should not be in the business for that of investors. of picking winners and losers, policies like the sugar Rules-Based Monetary System. Many take program, which causes the price of sugar in the U.S. for granted that the Federal Reserve has contribut- to be much higher than the global average, and the ed positively to economic stabilization, but the U.S. maritime Jones Act, which mandates that any goods has experienced severe economic turmoil in at least shipped by water from one point in the U.S. to another four different decades since the Fed was founded. U.S. location must be transported on U.S.-built ves- Recessions have not become less frequent or shorter sels, should be eliminated. in duration, output has not become less volatile, and Improving Efficacy and Accountability in some of the worst U.S. economic crises have occurred Infrastructure Funding. Federal funding makes on the Fed’s watch. Furthermore, the Fed’s action up about one-quarter of public spending on trans- during the 2008 financial crisis is only the latest portation infrastructure. Expansions of the federal

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 7 Administration’s Air Traffic Control continues be to Traffic Air Administration’s In addition, full repeal would alleviate the burdens the would alleviate repeal addition,In full Fund has been continuously diverted to non-high to been continuously has diverted Fund 8 way projects and has required extensive general-fund general-fund extensive required has way projects and ly increased costs. Repeal is essential to controlling controlling to essential is Repeal costs. ly increased unworkable. andshould Congress lar, unaffordable, nomic mobility, the federal role in funding shouldnomic mobility, role funding federal the in business. tech of ahigh instead abureaucracy like run goes infrastructure of vital needed maintenance spending. public in incentives have crowded out other role half-century over last the market-based. by created new spending in $2 trillion nearly the nate would elimi entirety. its in This Obamacare repeal mismanagement. federal in restoring accountability to a system currently mired people’s suits best that while needs infrastructure the and localities, decisions states, to of funding ity major leave vast the will This importance. national have led to a misallocation of resources, and poor and of resources, have led amisallocation to unfunded. In aviation, federal airport improvement airport federal aviation, In unfunded. the law’s exchange subsidies and Medicaid expansion, expansion, law’sthe Medicaid subsidies exchange and are more and tively, needs, meet specific and identify eco and improve geographic both will that ture The Federal Aviation less significance. of those far to decisions top-down expansive These spending. ture a health care reform alternative. This proposal should proposal This reform alternative. care a health massive have caused that regulations insurance al new taxes. in dollars atrillion more than as well as mid federal public. the accountable the to Removing infrastruc of responsibility fiscal accountability, and Reform. government health care spending and to clear the way way the clear to and spending government care health siphon prohibitive and regulations resources grants disruption in the insurance market and dramatical and market insurance the in disruption onerous and feder costly by Obamacare’s caused empower decisions will infrastructure from man dle to localities incentives for and perverse create states states, localities, and the private sector to build the the build to sector private the and localities, states, efficiency, in led diminution to and of funding sources programs administered at the federal level further level at federal the further administered programs private sector, which can set priorities more sector,private effec can which for an alternative reform that is patient-centered is reform that alternative for and an it distribute and airports most important the from be restricted to a small group of issues strictly of of strictly group issues asmall to restricted be badly projects while transit new,build unnecessary grant due Discretionary overspending. to bailouts In order to spend more wisely on vital infrastruc orderIn spend on to more vital wisely Trust Highway the transportation, surface In Patient-Centered, Market-Based Health Care Care Health Market-Based Patient-Centered, of Obamacare. Repeal Congress should for put place Congress aframework in Obamacare is unpopu is Obamacare The Heritage Foundation | Foundation Heritage The ------work, prepare forwork, prepare work, or look for work acondition as of full not the public, aware are American the with fits. fits. disabledpopulation,For thestates to payments low-income elderly should folded be Medi the into marketplace. Federal Medicaid assistance for the Federal assistance Medicaid marketplace. defined should adirect, converted to be individuals spending. care health in major drivers ing one’s self and one’s dependents. Welfare reform reform Welfare one’s dependents. and one’s self ing now over reaches $1 programs welfare means-tested model. To way, the chang prepare Medicare smaller has failed the poor. the promote to failed It self-sufficiency,has fails ty net. Federal Medicaid assistance for able-bodied Federal net. assistance Medicaid ty relief should Tax insurance. treatment of health tax dis obstacles that policy and regulatory federal the trillion annually. However, annually. along trillion most policymakers, fiscal, demographic, meet growing the itthat can al ownership of health insurance by reforming the the by reforming insurance of health ownership al adults receiving food stamps should be required to to should required be stamps food receiving adults projections. 10-year as well as state and Total federal unsustainable. is cost its and should tran Medicare challenges. structural and the to their programs tailor to flexibility states allow government spending on dozens of different federal federal different of dozens on spending government care program to streamline seniors’ health bene seniors’ health streamline to program care private the in participation facilitate to contribution should capped. be employer-based care health exclusion for of tax of choice, the value their the and choice the competition,courage address and and of receiving assistance. The work The of the requirements assistance. of receiving dependence controlling and costs. The food stamp should include Congress annual its in ofcost welfare. to efits—would premium transition the helpmake retirement the sub age, reducing raising as es—such should encourage work, aproven for formula reducing smoother. support bensidies consolidating for seniors, and wealthy support premium defined-contribution, a to sition so program Medicare the modernize should also theirpopulation. of needs specific control also but fiscal ensure to should limited be package should also restore Medicaid to a true safe atrue to Medicaid restore shouldpackage also by removing care forpromote market health afree programs, would be a good place to start: Able-bodied Able-bodied place would start: agood to be programs, of government one the of largest welfare the program, be extended for individuals to purchase the coverage the purchase to for extended be individuals budget an estimate of total current welfare spending, spending, welfare current of total budget estimate an A replacement package should encourage person encourage should package replacement A There is dignity and value in work, in support work, in in value and dignity There is Welfare Reform. Medicaid as a True Safety Net. Safety aTrue as Medicaid Modernize Medicare. Medicare. Modernize heritage.org The current U.S. welfare system system welfare U.S. current The A replacement package package replacement A A replacement replacement A ------Chapter 1: Policies for a Congressional Budget

Temporary Assistance for Needy Families program, states and schools through reforms in the Academic put into place by the 1996 welfare reform, are much Partnerships Lead Us to Success (A-PLUS) Act. too weak today and must be strengthened. Higher Education Accreditation Reform and The vast majority of welfare spending is federal, Restraint in Federal Higher Education Subsi- even when administration of the program occurs at dies. When tax credits and deductions are included, the state level. Because states are not fiscally respon- total aid for higher education, including non-federal sible for welfare programs, they have little incentive sources, exceed $250 billion annually. Federal aid to curb dependence or to rein in costs. States should alone accounts for more than $158 billion annually. gradually assume greater revenue responsibility for Federal higher education subsidies have increased welfare programs; that is, they should pay for and substantially over the past decade. The number of administer the programs with state resources. A first students who borrow money through federal student step would be to gradually return fiscal responsibil- loans increased by 64 percent—from 5.9 million stu- ity for all subsidized housing programs to the states. dents during the 2002–2003 academic year, to some Additionally, leaders should look for ways to 9.7 million today. At the same time, Pell Grant fund- strengthen marriage. The absence of fathers in the ing has more than doubled in real terms; the num- home is one of the greatest drivers of child poverty, ber of recipients has nearly doubled over the same yet the welfare system penalizes marriage. Policy- time period. makers should eliminate marriage penalties in the As federal subsidies have increased, so, too, have current welfare system. A place to begin would be college costs. Since 1980, tuition and fees at public and with the earned income tax credit (EITC). By reduc- private universities have grown at least twice as fast ing widespread fraud in the EITC, policymakers could as the rate of inflation. Some 60 percent of bachelor’s not only restore integrity to the EITC program and degree holders leave school with more than $26,000 reap large savings, but a portion of that savings could in student loan debt, with cumulative student loan be put toward eliminating marriage penalties in the debt now exceeding $1.2 trillion. rest of the welfare system. To increase access to and affordability of higher Limit Federal Intervention and Restore State education, policymakers should limit federal subsi- and Local Control of Education. Since President dies and spending, which have contributed to increas- Lyndon B. Johnson signed the Elementary and Sec- es in costs. In order to truly drive down college costs ondary Education Act (ESEA) into law in 1965 as the and improve access for students, policymakers should keystone education component of his War on Pov- undertake major reforms to accreditation, including erty, the federal government—which represents 10 decoupling federal financing from the ossified accred- percent of all K–12 education spending—has appro- itation system. priated some $2 trillion in an effort to improve the Access to Natural Resource Production, educational outcomes of American students. Despite Increased Trade Opportunities, and Empowered a more than doubling of inflation-adjusted federal States. With the abundance of resources beneath U.S. per-pupil expenditures since that time, only slightly soil, this land is literally a land of opportunity. Amer- more than one-third of children in grades four and ica has an abundance of natural resources, includ- eight are proficient in reading—a figure effectively ing plentiful reserves of coal, natural gas, uranium, unchanged since the early 1970s. Moreover, achieve- and oil. Federal government control of vast tracts ment gaps among students remain, and graduation of America’s land and federal regulations have sty- rates for disadvantaged students are stagnant. mied proper management of lands and development These lackluster outcomes—and in some cases of natural resources. Furthermore, the government declines—in academic performance come despite has placed restrictions on trading energy that blocks continued increases in education spending. These opportunities to expand to new markets. underwhelming outcomes add to the evidence that Congress should open access to natural resource ever-increasing government spending is not the key development in the U.S., allow states to control the to improving education. In order to shift education environmental review and permitting processes functions from the federal government to state and within their borders, and open opportunities to freely local leaders, Congress should limit federal interven- import and export energy resources and technologies. tion in education, beginning by eliminating ineffec- Elimination of All Energy Subsidies. Over the tive and duplicative programs and offering relief to years, Congress has implemented numerous policies

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 9 Administration to improve to program’s the efficiency Administration 2016 $150 the from billion insolvency by raiding 75-year horizon tops $1375-year trillion. $1 trillion in 2018—about one-quarter of the federal of federal the 2018—about in one-quarter $1 trillion 10 flaws and inefficiencies,and flaws and disincentives. work To OASI Trust Fund, the DI program remains plagued plagued remains DI the program Fund, Trust OASI iffs, and energy sales at below-market costs. Whatever below-marketat sales and costs. energy iffs, ment with the more accurate chained consumer price consumer price chained more the ment accurate with adjust cost-of-living replace current the immediately the increase predictably and should gradually makers theirage, receive benefits to on based individuals incentives; of period disability; adopt aneeds-based OASDI’sries. obligation over combined the unfunded to longevity. Across both the OASI and DI programs, DI longevity.to and OASI the programs, both Across cost pay. they can programs Combined, these than Americans. of benefit the work energy to in market let and afree technology consumers. and families to government The same: the delivers benefitsto a small, production the or subsidize to consumption of one and integrity. and should intro problems, these address policymakers by more benefits promising in of sense security a false provide (OASDI) programs Insurance Disability and mandates programs, toance produce biofuels, tar insur through risk socialized guarantees, loan and grants, special tax treatment, taxpayer-backed loans loans taxpayer-backed treatment, tax special grants, cash overgood direct another, through including education, or skill; and instruct the Social Security Security Social the instruct and education, or skill; allow that grids vocational non-medical the eliminate DI private optional component;duce an improve work competition, tax on rewards that a process of relying they intend that promote. to sources energy Instead standing the price point at which the technology will will point price technology the at which standing and technologies of very the viability and success economy the across costs the spreads and select group always are results the suchtakes, favoritism shape preferential treatment for every energy source and and source energy every for treatment preferential payer under subsidies prevent truly acompany from policymakers should transition to a flat, anti-poverty anti-poverty aflat, to should transition policymakers retirement account to ages full program’s and early for increases in life expectancy, and then index both and expectancy, life in for increases benefit focused on individuals who need it most, and who need it most, benefit individuals on focused excessive abuse, structural and fraud by widespread budget—tobeneficia million provide benefits60 to should eliminate Congress viable. economically be ity Insurance. ity Although Congress avoided Congress DI the program’sAlthough Within Social Security’s retirement program, law retirement program, Security’s Social Within Subsidies significantly obstruct the long-term the obstruct Subsidies significantly Reform of Social Security, Including Disabil Including Security, Reform of Social Social Security’s Old Age Survivors Old Survivors Age Security’s Social The Heritage Foundation | Foundation Heritage The ------(VA) health care delivery system is in need of com in is system delivery (VA) care health victories over the past four decades, the challenges to to challenges over four the decades, past the victories responsible, should reforms These fiscally be vices. judgment of VA administrators. life and conscience that inevitably stem from sanc stem from conscience and inevitably that life medical care in the private sector. private the decisions in The care medical demands care health changing the consistentis with that care timely,receive quality, affordable health and should empowered be save to Moreindex. individuals issues, the VA the issues, ser those to access should facilitate for VA the which services those especially needs, organization. the of level their within regardless individual—born and unborn. Despite major pro-life unborn. and individual—born has a unique expertise, such as poly-trauma, post poly-trauma, such as expertise, aunique has the Supremethe 1973 decisions Court’s in on should alonger-termtion, reforms based be policy at tion. However, care receive better can aveteran if disorder (PTSD), stress rehabilita and traumatic the freedom of conscience of individuals, medical medical of conscience freedom the of individuals, persist. demand on abortion tioned gener entire of an minds and hearts re-orient the to about when and where to receive care should be based shouldabout based when be where receive to and care VA by allowing patients crisis access who exces face and and avoid budget of and and enacting pattern window the a non-VA for non-service-related facility, especially and competentadequate supply clinicians of highly ation toward the dignity and worth of every existing existing of every worth and dignity the ation toward ger-term should reforms use the include refocusing er than time or distance restrictions or the arbitrary or arbitrary the restrictions or distance time er than rath circumstances care health on veteran-specific for current its ending consistent and strategy clear ofconcerns VA. the institutional the not and population veteran the of demand, the pro-life movement pro-life the demand, worked has tirelessly of resources limited on service-related health care sive wait times or travel-related times sive delays wait receive to short-term fixes. prehensive reform to ensure that America’s veterans America’sprehensive that veterans ensure reform to providing quality care in a cost-effective way. acost-effective in In addi care quality providing an by ensuring managementpersonnel failures and System. System. for retirement through private means. private for retirement through for foundational American principles by protecting for American foundational by demanding accountability from all employees, all from accountability by demanding Veteran-Centered Reform of VA the Health In addition, VAIn the should resolve current the First of all, the VA the of all, First develop should immediately a More fundamental, fiscally responsible lon fiscally More fundamental, Policymakers should return to a deeper respect adeeper to respect should return Policymakers Protection of Life and Conscience. and of Life Protection heritage.org Doe v.Doe Bolton The U.S. Department of Veterans Affairs of Veterans Department Affairs U.S. The , inventing a right to abortion on abortion to , inventing a right Roe v.Roe Wade Since Since ------

Chapter 1: Policies for a Congressional Budget

providers, and taxpayers, and ensuring the basic free society—and this freedom has suffered erosion rights of liberty and life for everyone, including those in recent years. The right of Americans and institu- still in the womb. tions to exercise their religious beliefs is not confined There is long-standing, broad consensus that fed- to the private sphere, and is protected from govern- eral taxpayer funds should not be used for elective ment burden and discrimination in public life. abortions or for health insurance that includes cov- America must return to a more reasonable and erage for elective abortions. Policymakers should historically accurate understanding of religious lib- close the patchwork of federal prohibitions on abor- erty, upholding religious and moral conscience as an tion funding by making policies, such as the annually invaluable support for healthy republican govern- re-enacted Hyde amendment—which prohibits the ment and human flourishing. In 2015, the Supreme use of certain federal funds for abortion coverage— Court imposed a redefinition of marriage on all 50 permanent across federal law, and enact permanent states in the decision of Obergefell v. Hodges. Poli- prohibitions on use of taxpayer funding to encour- cymakers should promote policies that protect from age or pay for abortions overseas, through foreign aid discrimination those who believe that marriage is or otherwise. the union of one man and one woman. Congress American taxpayers simply should not be forced to should enact laws to prevent the government from subsidize the abortion industry. Policymakers should discriminating in regard to contracts, grants, licens- end taxpayer funding for the Planned Parenthood ing, accreditation, or the award or maintenance of Federation of America affiliates and all other abortion tax-exempt status, against any person or group on providers, and redirect funding to centers that pro- the basis of speaking or acting on the belief that mar- vide health care for women without entanglement in riage is the union of one man and one woman. on-demand abortion. Policymakers should also enact A Vision for America. The congressional budget permanent conscience protections for individuals, resolution provides Congress with a critical oppor- families, employers, and insurers to keep them from tunity to review federal policy in all areas and to being forced to offer, provide, or pay for coverage that put forth a strong vision for an America that offers violates their conscience. opportunity for all with favoritism to none. Congress Defense of Religious Liberty. The freedom to should seize this opportunity to begin to drive down earn a living, care for the poor, heal the sick, and federal spending to a balanced budget, while reducing serve the community in ways that are consistent with taxes, freeing the economy, and maintaining a strong one’s beliefs is essential for maintaining a just and national defense.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 11

- - - 13 people if it were administered if were it people and financedby state or localstate or or governments; opportunity or reduce favoritism; the private sector; Congress should determine whether: Eliminating the program increase would The program better would serve the American The program be better would administered by The program is wasteful duplicative. or This chapter provides proposals to and reduce freedom, and strengthen civil society. proposals savings produce programs; in defense those nationalprograms, defense. a stronger achieve to help potential States, enhance the United of individual provisions, known that as direct “riders,” prohibit or savings be shifted should to higher priority defense ed the States Constitution, by as ours is a federal gov limited of ernment Congress powers. also should use authority. Congress adding by example, can authority. for so, do the of process. Some budget the FY for 2018 agencies the size and rein the federal scope of government, the appropriations bills, like bills,the appropriations other to advance the use funds of specifiedpurposes. for that fall they within to the Unit delegated the powers ing in federal bureaucrats, to unleash the economic importantpolicy within objectives, the limits its of mandatoryreform and discretionary programs and 1. 2. 3. If enacted, these proposals significantly would reduce 4. ------A FEDERAL BUDGET FOR FISCAL YEAR 2018 FISCAL FOR A FEDERAL BUDGET

Blueprint for Balance:

authorization to be made before appropriations appropriations before made be to authorization he congressional budget process calls congressionalhe budget an for Congressreview should programsduring the The appropriations process calls on Congress to calls to Congress process on appropriations The fund the government’s operations for that fiscalfor operations fundyear the government’s payment of interest on the national interest on of debt. payment pass appropriations bills (currently 12 in number) bills 12pass in number) (currently appropriations provided for activities authorized. for provided been that not have processallows regular for scrutiny and review fed of so-called “mandatory spending” which Congress for each year, before the start before fiscaleach year, the government’s of eliminating funding activities for that the federal gov undertake. not should fundsernment No be should congressionalrules require and federal taxpayers deserve. Congress authorize those only should pro congressional scrutiny programs of that and agencies eralactivities. When this followed, process estab grams federal constitutional that represent priorities, authorization and appropriation process to ensure ensure to process and appropriation authorization annually through referred bills (often appropriations agencies or programs. Yet, lawmakers programs. or agencies rarely Yet, follow arefederal activities. providedfor The authorizations thirds “mandatory spending of goes for spending” and toas “discretionary spending” as distinguished from ture, programs Spending on others. among funded the authorization process. Thisthe authorization the careful evades up about one-third about the totalup of Two- federal budget. haspassed lawsmaking permanent appropriations instead of periodic appropriations) currently makes currently appropriations) periodic of instead icy areas health, and as such agricul defense, energy, lishes, continues, discontinues, or modifies discontinues, or federal lishes, continues,

year on October 1. Appropriations are supposed to to are supposed Appropriations 1. October year on Chapter 2: Chapter (FY). pol of bills a number The cover appropriations

Budget Proposals Budget T

Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Repeal theUSDA Catfish InspectionProgram ADDITIONAL READING Assigned to USDA.” to Assigned While the Food and Drug Administration (FDA) Administration Food the Drug and While As reported in U.S. Government Accountability Office, “Seafood Safety: Responsibility for Inspecting Catfish Should Not Be Assigned to to USDA,” Assigned Be Not Should Catfish Inspecting for Responsibility Safety: “Seafood Office, Accountability Government U.S. in reported As The evidence does not support the health justifi health the support not does evidence The Responsibility for Inspecting Catfish Should NotBe Catfish for Inspecting Responsibility saves (USDA’s) $14proposal This of Agriculture’s Department U.S. the Repeal program. inspection catfish CALCULATIONS USDA to regulate catfish that is soldis that for catfish human USDA regulate to 16 RATIONALE RECOMMENDATION Report toReport Congressional Requesters ly summarized most of problems, the that noting ly summarized report with the not-so-subtle title “Seafood Safety: Safety: not-so-subtle the “Seafood title with report 2008 the seafood, domestic imported and regulates 2018. FY in million has criticized the program, publishing a2012 publishing program, the criticized has and the program “would result in duplication in result “would of federal program the Office(GAO) Governmenttion. The Accountability opposi bipartisan been wide there has which to cations for the more intrusive inspection program, program, inspection cations for more the intrusive FDA complyboth to with required wouldbe catfish, not yet has which program, This consumption. estimate of $14 million annually may understate the true costs of the program. of the costs true the may understate annually million of $14 estimate farm bill created a special exception requiring the the exception requiring aspecial created bill farm because facilities that process seafood, including including seafood, process that facilities because duplication costly impose would implemented, been industry an estimated $14 million annually, with the federal government bearing 98 percent of the cost. This GAO report notes that the reported reported the that notes GAO report This cost. of the percent 98 bearing government federal annually, with the million $14 estimated an industry Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ U.S. Government Accountability Office, “Seafood Safety: Responsibility for Inspecting Catfish Should Not Be Assigned to USDA,” GAO–12–411, GAO–12–411, to USDA,” Assigned Be Not Should Catfish Inspecting for Responsibility Safety: “Seafood Office, Accountability Government U.S. 198–199. pp. 2013, Update,”February An GAO–13–283, Series: Risk “High Office, Accountability Government U.S. May 2012. May 2013. 19, November Signal, Daily The Catfished,” Are Getting Taxpayers Bill: “Farm Consumers and Bakst, Daren Foundation Heritage USDA in Programs,” Extremism and Abuse, Waste, “Addressing Bakst, Daren 2016. May 26, Signal, Daily Votes The Crony Program,” “Senate to aTextbook End Bakst, Daren 2016. 19, September Signal, Daily Allow aVote Cronyism,” The Should Against Leadership “House Bakst, Daren USDA regulations. USDA 1 Another GAO report succinct report GAO Another , GAO–12–411, May 2012, pp. 19 and 20, the proposed catfish program would cost the federal government and and government federal the cost would program catfish proposed the 20, and 19 pp. May 2012, , GAO–12–411, The Heritage Foundation | Foundation Heritage The - - - The USDA catfish inspection program would also also would program inspection USDAThe catfish USDA’s coun from foreign requirements, exporters do not countries meet these If the USDA program. fied trade barrier. The retaliation would likely be likely would Theretaliation trade barrier. fied intended for human consumption.” human for intended reduce competition. reduce have serious trade implications.have Foreign serious trade countries tries that currently supply the United States with supply United currently with the States that tries thewouldto to need U.S. catfish export to want that tries would likely retaliate with—and win—trade win—trade with—and retaliate would likely tries annually without enhancing the safety of catfish of catfish safety the enhancing without annually against industries other than the catfish industry, catfish the other than industries against establish a new regulatory system equivalent to the the to equivalent system anew regulatory establish consumers would also suffer, as this program would program suffer,this as would consumers also unjusti would an be program the since disputes, approval frombe blockedThis doing so. will catfish such as milk producers or meat packers. American producers or meat packers. milk American such as programs and cost taxpayers millions of dollars of dollars millions taxpayers cost and programs process could take years. Catfish-exporting coun Catfish-exporting years. could take process heritage.org Backgrounder No. 2916, May 30, 2014. May 30, 2916, No. 2 - - - Agriculture, Rural Development, Food and Drug Administration, and Related Agencies

Eliminate the Conservation Technical Assistance Program

RECOMMENDATION Eliminate the Conservation Technical Assistance Program. This proposal saves $750 million in FY 2018.

RATIONALE The Natural Resources Conservation Service runs private land. Private landowners, not government, a costly program to offer technical assistance to are the best stewards of a given property. If neces- landowners on natural resource management. This sary, they can seek private solutions to conservation assistance includes help in maintaining private challenges. Federal taxpayers should not be forced lands, complying with laws, enhancing recreational to subsidize advice that landowners should be pay- activities, and improving the aesthetic character of ing for on their own.

ADDITIONAL READING ȖȖ Daren Bakst, “Addressing Waste, Abuse, and Extremism in USDA Programs,” Heritage Foundation Backgrounder No. 2916, May 30, 2014.

CALCULATIONS Savings is expressed as budget authority and was calculated using the FY 2016 estimated spending level of $752 million as found in USDA, “FY 2017: Budget Summary and Annual Performance Plan, U.S. Department of Agriculture,” p. 63. This estimate assumes that the FY 2016 spending level holds constant in FY 2017 and decreases at the same rate as discretionary spending in FY 2018 (–0.32 percent), according to the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 17 Eliminate theRuralBusinessCooperative Service ADDITIONAL READING Agriculture that has a wide range of financial assis of financial range awide has that Agriculture The RBCS is an agency of the U.S. Department of agency Department of U.S. the an is RBCS The FY 2018. FY saves $105 in proposal million This (RBCS). Service Cooperative Business Rural the in programs Eliminate CALCULATIONS 18 warming, including subsidizing biofuels. Rural biofuels. Rural subsidizing including warming, RATIONALE RECOMMENDATION means. The fact that these businesses are in rural rural in are businesses these that fact The means. private through assistance seeking and investing, Savings are expressed on budget authority based on the CBO’s most recent August 2016 baseline spending projections. Savings include $105 $105 include Savings projections. spending baseline 2016 recent August most CBO’s the on based authority budget on expressed are Savings tance programs for rural businesses. It also has a has It businesses. also for rural programs tance areas does not change the fact that they can and and they can that fact the doesnot change areas significant focus on renewable energy and global global andrenewable on focus energy significant businesses are fully capable of running themselves, capable of running fully are businesses Ȗ million in discretionary spending and $68 million in mandatory spending. mandatory in million $68 and spending discretionary in million Ȗ Daren Bakst, “Addressing Waste, Abuse, and Extremism in USDA Programs,” Heritage Foundation Foundation Heritage USDA in Programs,” Extremism and Abuse, Waste, “Addressing Bakst, Daren MANDATORY The Heritage Foundation | Foundation Heritage The - Instead of handing taxpayer dollars to businesses, businesses, to dollars taxpayer of handing Instead rural communities.rural it comes investments or sources. private to energy the obstacles that it has created for created in businesses it that has obstacles the government federal removethe and should identify losers when and winners of business picking the government investments. The thy should not in be should succeed on their own merits like any other any like merits should on own succeed their business. Private capital will find its wayto wor find its will capital Private business. heritage.org Backgrounder No. 2916, May 30, 2014. May 30, 2916, No. - Agriculture, Rural Development, Food and Drug Administration, and Related Agencies

Prohibit Funding for National School Meal Standards and the Community Eligibility Provision

RECOMMENDATION Prohibit funding for national school meal standards and the community eligibility provision. This proposal has no savings for FY 2018.

RATIONALE The U.S. Department of Agriculture’s school-meal The community eligibility provision is a new policy standards for the Healthy, Hunger-Free Kids Act that was implemented by the Healthy, Hunger-Free of 2010 have been a failure. These standards are Kids Act. It expands free school meals to students a burden on schools and have resulted in many regardless of family income. Under this provision, if negative outcomes. A September 2015 GAO report 40 percent of students in a school, group of schools, on the school lunch program shows that since the or school district are identified as eligible for free implementation of the new standards, participation meals because they receive benefits from another in the school lunch program has declined, and food means-tested welfare program like food stamps, waste remains a significant problem. As reported, then all students can receive free meals. The com- some schools have dropped out of the school lunch munity eligibility provision is essentially a back- program at least partially due to the new stan- door approach to universal school meals. Schools dards.3 The new standards have also imposed great- should not be providing welfare to middle-class and er costs on schools, such that some have even have wealthy students. Ending the community eligibility had to draw from their education funds to cover the provision would ensure that free meals are going new costs.4 No funding should be directed toward only to students from low-income families. No fur- implementation or enforcement of these standards. ther funding should be directed toward implement- Any new standards should give states and local ing this provision. educational authorities much greater flexibility and respect the role of parents in helping their children make dietary decisions.

ADDITIONAL READING ȖȖ Daren Bakst, “Addressing Waste, Abuse, and Extremism in USDA Programs,” Heritage Foundation Backgrounder No. 2916, May 30, 2014. ȖȖ Daren Bakst, “Michelle Obama Is Ignoring the Problems Her New School Lunch Standards Have Caused,” The Daily Signal, May 30, 2014. ȖȖ Rachel Sheffield and Daren Bakst, “Child Nutrition Reauthorization: Time for Serious Reform, Not Tinkering,” Heritage Foundation Issue Brief No. 4570, May 26, 2016. ȖȖ Daren Bakst and Rachel Sheffield, “Congress Shouldn’t Push Obama’s Flawed Child Nutrition Policy on Children,” The Daily Signal, January 25, 2016. ȖȖ Daren Bakst and Rachel Sheffield, “Getting the Facts Straight on School Meals and Child Nutrition Reauthorization,” Heritage Foundation Issue Brief No. 4622, November 3, 2016. ȖȖ Daren Bakst and Rachel Sheffield, “School Lunch Program: No Wealthy Child Left Behind,” The Daily Signal, May 15, 2016.

CALCULATIONS Ending funding and enforcement for the new standards would generate savings for state and local governments. The effects of these proposals on federal spending are uncertain so Heritage does not include estimated savings for FY 2018.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 19 Withhold Funding forFederal Fruit ADDITIONAL READING While the “raisin case” receivedmuch attention case” “raisin the While in no savings has proposal vegetable-supply This for fruit-supply and federal restrictions. funding Withhold In JuneIn 2015, United Supreme the States Court FY 2018. FY 20 and Vegetable Supply Restrictions RATIONALE RECOMMENDATION lar, USDA the power its enforce uses to anumber ment’s actions, it is far from unique. In particu In ment’s unique. from it far actions, is ataking was over raisins their turn to growers ing of their over not who did growers hand part raisin government’s federal the fine to authority regarding of private property requiring just compensation. just requiring of property private held forc government. that the crop court to The decided because of the outrageous nature of govern the of nature outrageous the because Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Alden Abbott, “Time to Repeal Agricultural Marketing Orders,” Heritage Foundation Foundation Heritage Orders,” Marketing Agricultural to Repeal “Time Abbott, Alden Elayne Allen and Daren Bakst, “How the Government Is Mandating Food Waste,” The Daily Signal, August 19, 2016. 19, August Signal, Daily Waste,” The Food Mandating Is Government the “How Bakst, Daren and Allen Elayne 2015. 29, September 4466, No. Foundation Heritage Vegetables,” and Fruits of Certain Sale the Stop Limiting Should Government Federal “The Bakst, Daren Horne v. of Agriculture Department The Heritage Foundation | Foundation Heritage The , 5 a case acase - - - Marketing orders are bad enough, orders but, at amini are Marketing vegetables farmers may sell, and should and get gov may sell, the vegetables farmers mum, Congress should stop funding these volume these should stop funding Congress mum, marketing vegetable and Fruit orders. marketing the amounts that agricultural producers may sell. agricultural that amounts the controls that limit how much of their own fruits and and how much fruits controls limit of own that their orders as known agreements industry through of cartels ernment out of the market and cartel management ernment cartel out and of market the supply restrictions (volumesupply restrictions controls), limiting business. heritage.org 6 allow the federal government federal the authorize to allow Backgrounder 7

No. 3054 December 3, 2015. 3, December 3054 No. Issue Brief Issue -

- MANDATORY Agriculture, Rural Development, Food and Drug Administration, and Related Agencies

Repeal the Agricultural Risk Coverage and Price Loss Coverage Programs

RECOMMENDATION Repeal the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. This proposal saves $8.014 billion in FY 2018.

RATIONALE The ARC and PLC programs are two major new The PLC program provides protection against commodity programs that Congress added in minor dips in revenue, including those that could the 2014 farm bill. Essentially, the two programs be attributed to normal business risk. The PLC attempt to insulate farmers from market forces by program has such high reference prices that, even at guaranteeing against lower-than-expected revenue the time of passage of the 2014 farm bill, payments and against price changes. were likely right from the outset for some commod- ities. Policymakers need to allow farmers to freely The ARC program protects farmers from shallow compete in the marketplace, and reap the financial losses (minor dips in expected revenue), providing reward of being more efficient and better managed payments when their actual revenues fall below 86 than their competitors. In other words, they should percent of the expected revenues for their crops. be allowed to operate just like any other business. The PLC program provides payments to farmers when commodity prices fall below a fixed reference Congress should repeal both programs because they price established by statute. On a crop-by-crop go way beyond any concept of a safety net. At most, basis, farmers can participate either in the ARC the taxpayer-funded safety net should only protect program or in the PLC program. These programs farmers from deep yield losses, not insulate farmers go far beyond providing a safety net for farmers. from minor dips in revenue and market forces such Instead, the pretext of a safety net is used to prevent as prices. This proposal would save $9.618 billion many agricultural producers from competing in the dollars in FY 2018. market like other businesses.

ADDITIONAL READING ȖȖ Daren Bakst et al., “Farms and Free Enterprise: A Blueprint for Agricultural Policy,” The Heritage Foundation, Mandate for Leadership Report, September 21, 2016. ȖȖ Daren Bakst, Josh Sewell, and Brian Wright, “Addressing Risk in Agriculture,” Heritage Foundation Special Report No. 189, September 8, 2016.

CALCULATIONS Savings are expressed as budget authority as projected in the CBO’s March 2016 baseline spending projections. Projections for the ARC and PLC can be found in Congressional Budget Office, “CBO’s March Baseline for Farm Programs,” March 24, 2016, https://www.cbo.gov/sites/default/ files/recurringdata/51317-2016-03-usda.pdf (accessed February 6, 2017). Estimated savings of $8.014 billion in FY 2018 include $2.521 billion for the PLC (p. 6); $5.42 billion for the ARC-CO (county) (p. 6); and $66 million for the ARC-IC (individual coverage) (p. 9). All $8.014 billion in savings represent mandatory spending.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 21 Include Work Requirement forAble-Bodied Adult Food StampRecipients ADDITIONAL READING The food stamp program is the nation’s the is program second-larg stamp food The Reform the food stamps program to include to awork adults requirement program for Able-bodied adults. able-bodied Reform stamps food the CALCULATIONS 22 RATIONALE RECOMMENDATION in FY 2015. FY in billion $83.0 to $19.8 from 2000 risen FY in billion 2016. have in Costs million 44.2 to 2000 in million about 17.2 from dramatically recipients risen has saves $9.7 2018.FY proposal receiveThis benefits.in billion formust work, prepare work, or look for number work of month each hours order in for to aminimum Savings of $9.7 billion per year come from analysis contained in Robert Rector, Rachel Sheffield, and Kevin Dayaratna, “Maine Food Stamp Work Work Stamp Food “Maine and Kevin Dayaratna, Sheffield, Rector, Rachel Robert in contained analysis from come year of $9.7 per billion Savings ed welfare programs. The number of food stamp number The of stamp food programs. welfare ed of government’sest the means-test 90 roughly Requirement Cuts Non-Parent Caseload by 80 Percent,” Heritage Foundation Foundation Percent,” by 80 Heritage Caseload Non-Parent Cuts Requirement Ȗ Ȗ mandatory spending. mandatory research/reports/2016/02/maine-food-stamp-work-requirement-cuts-non-parent-caseload-by-80-percent. All $9.7 billion in savings represent Ȗ Ȗ Robert Rector and Rachel Sheffield, “Setting Priorities for Welfare Reform,” Heritage Foundation Foundation Heritage for Reform,” Welfare Priorities “Setting Sheffield, Rachel and Rector Robert Foundation Heritage Percent,” 80 by Caseload Non-Parent Cuts Requirement Work Stamp Food “Maine and Kevin Dayaratna, Sheffield, Rector, Rachel Robert MANDATORY Backgrounder No. 3091, February 8, 2016. 8, February 3091, No. The Heritage Foundation | Foundation Heritage The - - Food stamp assistance should be directed to those those to should directed be Food assistance stamp work, or look for workfor exchange receiving in need them most, a work requirement also promotes aworkneed them most, requirement also who receive food adults Able-bodied need. most in uals toward work. toward uals the principle of self-sufficiency by directing individ principlethe ofdirecting self-sufficiency by assistance. Not only do work help requirements assistance. ensure that food stamps are directed to those who those to directed are stamps food that ensure stamps should be required to work, prepare for work, prepare to should required be stamps Backgrounder heritage.org No. 3091, February 8, 2016, http://www.heritage.org/ 2016, 8, February 3091, No. Issue Brief Issue No. 4520, February 24, 2016. 4520, February No.

- MANDATORY Agriculture, Rural Development, Food and Drug Administration, and Related Agencies

End Broad-Based Categorical Eligibility for Food Stamps

RECOMMENDATION Broad-based categorical eligibility allows states to loosen income limits for potential food stamp recipients and bypass asset tests. This policy should be eliminated. This proposal saves $1.275 billion in FY 2018.

RATIONALE Categorical eligibility traditionally allows individ- to households with incomes higher than those uals who receive cash welfare assistance—from eligible for TANF cash assistance, states are able programs such as Temporary Assistance for Needy to extend food stamp benefits to those with higher Families (TANF)—to automatically enroll in food incomes than otherwise would be permissible. stamps. Now, a policy known as “broad-based categorical eligibility” provides a loophole that allows Furthermore, broad-based categorical eligibili- states to loosen income limits and bypass asset ty allows states to entirely waive asset tests. An tests for potential food stamp recipients. Under individual with temporary low income can receive broad-based categorical eligibility, individuals or a TANF service and then become categorically eli- families can simply receive some type of TANF gible for food stamps, even if he has a large amount “service” and become automatically categorically of savings. Policymakers should end broad-based eligible for food stamps. A “service” can be some- categorical eligibility to ensure that food stamps thing as simple as receiving a brochure from a are focused on helping those truly in need. TANF office. Because TANF services are available

ADDITIONAL READING ȖȖ Rachel Sheffield, “How to Reform Food Stamps,” Heritage Foundation Issue Brief No. 4045, September 12, 2013. ȖȖ Daren Bakst and Rachel Sheffield, “Eight Things to Watch for in the Farm Bill,” Heritage Foundation Issue Brief No. 4101, December 4, 2013.

CALCULATIONS Savings are expressed as budget authority as estimated by the CBO in its analysis of the impact of previously proposed legislation that would enact these reforms as found in Congressional Budget Office, “Cost Estimate for H.R. 3102, the Nutrition Reform and Work Opportunity Act of 2013,” September 16, 2013, https://www.cbo.gov/sites/default/files/113th-congress-2013-2014/costestimate/hr31020.pdf (accessed February 6, 2017). Heritage uses the CBO’s estimated 2014 savings because these represent the first year of implementation. All $1.275 billion in savings represent mandatory spending.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 23 Eliminate the“Heat andEat”Loophole ADDITIONAL READING A loophole known as “heat and eat” is a tactic that that atactic is eat” and “heat A loophole as known in Food Stamps Allowance,” as reported in Sequester Replacement Reconciliation Act of 2012, H.R. 5652, 112th Cong., p. 27, p. Cong., https://www.gpo.gov/fdsys/pkg/CRPT- 112th 5652, H.R. of 2012, Act Reconciliation Replacement Sequester in Allowance,” reported as Heat and Energy Assistance Program (LIHEAP) (LIHEAP) Program Assistance Heat Energy and 2018. saves $1.450 FY proposal in billion loophole This eat” stamps. food and in “heat the Eliminate CALCULATIONS 24 112hrpt470/pdf/CRPT-112hrpt470.pdf (accessed February 6, 2017). All $1.450 billion in savings represent mandatory spending. mandatory represent savings in billion $1.450 All 112hrpt470/pdf/CRPT-112hrpt470.pdf 2017). 6, February (accessed RATIONALE RECOMMENDATION make households eligible for the higher deduction— higher the for eligible households make House deductions. certain minus income—income holds that receive benefits from the Low-Incomeholdsthefrom receive benefits that Savings are based on the estimated FY 2018 savings of $1.450 billion reported for “Changes to SNAP Eligibility Requirements: Standard Utility Utility Standard Requirements: Eligibility to SNAP “Changes for reported billion of $1.450 savings 2018 FY estimated the on based are Savings and, thus, greater food stamp benefits—states have benefits—states stamp food greater thus, and, deduction. order In to eligible for utility alarger are a household on “countable” its based receives is states have used to artificially boost a boost household’s artificially to have used states food stamp benefit. The amount of food stamps amountThe benefit.stamps of food stamp food Ȗ Ȗ Ȗ Ȗ Daren Bakst and Rachel Sheffield, “Eight Things to Watch for in the Farm Bill,” Heritage Foundation Foundation totheThings Heritage Bill,” Watch in for Farm “Eight Sheffield, Rachel and Bakst Daren Foundation Heritage Stamps,” “How Food to Reform Sheffield, Rachel MANDATORY The Heritage Foundation | Foundation Heritage The - Issue Brief Brief Issue $1 to food stamp recipients. While the 2014 farm bill 2014 the bill recipients. farm $1 stamp food While to hold receive greater than $20 annually in LIHEAP LIHEAP in $20 annually hold than receive greater tion and subsequently higher food stamp benefits, subsequentlytion stamp food and higher ahouse that loophole this tightened by requiring close this loopholeclose this entirely. as small for as amounts checks LIHEAP distributed some states have continued to utilize the loophole the some have continued states utilize to payments to be eligible for the larger utility deduc eligibleutility for be payments to larger the by paying over should by $20 per paying year. Policymakers heritage.org No. 4045, September 12, 2013. 12, September 4045, No. Issue Brief Issue

No. 4101, December 4, 2013. 4, December 4101, No. - - MANDATORY Agriculture, Rural Development, Food and Drug Administration, and Related Agencies

Eliminate the Federal Sugar Program RECOMMENDATION Eliminate the federal sugar program. This proposal has no savings in FY 2018.

RATIONALE The federal sugar program uses price supports and An International Trade Administration marketing allotments that limit how much sugar report found: “For each sugar-growing and harvest- processors can sell each year, as well as import ing job saved through high U.S. sugar prices, nearly restrictions. As a result of government intervention three confectionery manufacturing jobs are lost.”9 to limit supply, the price of American sugar is con- The program is also a hidden tax on consumers. sistently higher (at times twice as high) than world Recent studies have found that the program costs prices.8 consumers as much as $3.7 billion a year.10 Such a program also has a disproportionate impact on the This program may benefit a small number of poor because a greater share of their income goes sugar growers and harvesters, but it does so at the to food purchases than for individuals at higher expense of sugar-using industries and consumers. income levels.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 25 Eliminate Revenue-Based Crop InsurancePolicies ADDITIONAL READING A yield-based policy protects farmers from yields yields from farmers protects policy A yield-based safety concept reasonable ofAny ataxpayer-funded There are generally two types of federal crop-in of federal types two generally There are In otherIn revenue-based words, these policies have Eliminate revenue-based crop-insurance policies. Although this proposal would likely save billions of save would billions likely proposal this policies. Although revenue-based crop-insurance Eliminate CALCULATIONS 26 We do not yet include any estimated savings for FY 2018 because, absent an extensive analysis, many unknown factors remain that are necessary necessary are that remain factors unknown many analysis, extensive an absent because, 2018 FY for savings any estimated We yet not include do RATIONALE RECOMMENDATION little over they have since been morelittle 10 prom years includ net, loss. safety Unfortunately, current the receive indemnities. receive or adisaster not does require program The net. crop-insur taxpayer-subsidized federal the ing crop asignificant wouldnet require for farmers inent than yield-based policies. yield-based than inent been only a it alongnot has and been around time, the control of farmers, such as weather crop such and as controlthe of farmers, due events to beyond expected lower are than that a result of this change. of this a result optionan for farmers. asafety way beyond goes providing program, ance dollars each year, Heritage does not include any savings for FY 2018. (See calculations below.) year, each for 2018. Heritage doesnot (See calculations FY dollars include savings any covered by these policies than yield-based policies. yield-based covered policies by these than 1997, In became disease. revenue-based insurance to for farmers even yield have losses occurred to surance policies: yield-based and revenue-based. policies: and yield-based surance for providing a reasonable estimate. Among other factors, savings would be contingent on which coverage, if any, agricultural producers select as as select producers if any, coverage, which on agricultural contingent be would savings factors, other Among estimate. a reasonable providing for Ȗ Ȗ Ȗ Ȗ September 2016. 21, Daren Bakst, Josh Sewell, and Brian Wright, “Addressing Risk in Agriculture,” Heritage Foundation Foundation Agriculture,” in Heritage Risk “Addressing Wright, Brian and Sewell, Josh Bakst, Daren Leadership for Mandate Foundation, Policy,” Heritage The Agricultural for ABlueprint Free Enterprise: and “Farms et al., Bakst Daren MANDATORY 11 By 2003, more acreage was more was acreage 2003, By The Heritage Foundation | Foundation Heritage The - - - 12 -

This relatively overly new of and This generous type Revenue-based policies are more popular than than Revenue-based more policies popular are yield for losses. They accounted percent 77 of all they do not policiesyield-based because require taxpayer-subsidized crop insurance crop taxpayer-subsidized limited to yield insurance as it has been in the past. past. the been in it has as yield insurance to limited ing price or revenue; agricultural producers, like producers, like or price ing revenue; agricultural prices commodity payments if receive indemnity market forces or guaranteed financial success at the success at financial forces ormarket guaranteed the billions). the should be crop insurance taxpayer-subsidized Such a change would lead to major savings (likely in in (likely would lead majorSuch to achange savings are lower than expected. Arevenue-based policy expected. lowerare than government should of business insur not the in be due low to federal low prices, The or yields, both. still and expected than even yields have greater eliminated. taxpayers. of expense from other should businesses, not insulated be protects farmers from dips in expected revenue expected in dips from farmers protects 2014. in premiums policies earning heritage.org Farmers would still be able to purchase Special Report Report Special No. 189, September 8, 2016. 8, September 189, No. , but it would be 13 Farmers can Farmers can Report - , MANDATORY Agriculture, Rural Development, Food and Drug Administration, and Related Agencies

Eliminate the Market Access Program RECOMMENDATION Eliminate the USDA’s Market Access Program (MAP). This proposal saves $185 million in FY 2018.

RATIONALE MAP subsidizes trade associations, businesses, and other private entities to help them market and promote their products overseas. Under MAP, taxpayers have recently helped to fund international wine tastings, organic hair products for cats and dogs, and a reality television show in India. It is not government’s role to advance the marketing interests of certain industries or businesses. Taxpayers should not be forced to subsidize the marketing that private businesses should do on their own.

ADDITIONAL READING ȖȖ Daren Bakst, “Addressing Waste, Abuse, and Extremism in USDA Programs,” Heritage Foundation Backgrounder No. 2916, May 30, 2014. ȖȖ Daren Bakst, “Animated Squirrels, Prunes, and Doggie Hair Gel: Your Tax Dollars at Work,” The Daily Signal, July 25, 2013. ȖȖ .Senator Tom Coburn, “Treasure Map: The Market Access Program’s Bounty of Waste, Loot and Spoils Plundered from Taxpayers,” June 2012

CALCULATIONS Savings are expressed as budget authority as projected for FY 2018 in Congressional Budget Office, “CBO’s March 2016 Baseline for Farm Programs,” March 24, 2016, https://www.cbo.gov/sites/default/files/recurringdata/51317-2016-03-usda.pdf (accessed February 6, 2017). (The CBO’s more recent August 2016 baseline projections did not include estimates for MAP). All $185 million in savings represent mandatory spending.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 27 4. 7. 3. 28 2. 13. Ibid. 12. 11. 10. 1. ENDNOTES 9. 6. 5. 8.

4466, September 29, 2015, http://www.heritage.org/research/reports/2015/09/the-federal-government-should-stop-limiting-the-sale-of- 411, May 2012, http://www.gao.gov/products/GAO-12-411 (accessed February 2,2017). Agralytica, “Economic Effects oftheSugarProgram Since the2008 Farm Bill& Policy Implications for the2013 Farm Bill,” U.S. Government Accountability Office, “SchoolNutrition:USDA Had Efforts Underway toHelp Address OngoingChallengesImplementing These marketing orders cover fruits,vegetables, andspecialty crops. SeeAgricultural Marketing Service, “Marketing Orders for Fruits, Horne v. Department of Agriculture Erik Wasso, “Michelle’s MealsTurn OfftheKids,” Daren Bakst, “The Federal Government ShouldStop ofCertain LimitingtheSale Fruits andVegetables,” HeritageFoundation Ibid., p. 10. Dennis A.Shields,“Federal Crop Insurance: Background,” Congressional Research Agralytica, “Economic Effects oftheSugarProgram Since the2008 Farm Bill& Policy Implications for the2013 Farm Bill.” SeealsoJohn U.S. Department ofCommerce, “Employment ChangesinU.S. Food Manufacturing: The Impact ofSugarPrices,” U.S. Government Accountability Office, “Seafood Safety: Responsibility forInspecting Catfish ShouldNotBe Assigned to USDA,” GAO–12– U.S. Government Accountability Office, “ Vegetables, andSpecialty Crops,” U.S. Department ofAgriculture, http://www.ams.usda.gov/rules-regulations/moa/fv (accessed certain-fruits-and-vegetables. Changes inNutritionStandards,” GAO–15–656, September 14, 2015, http://gao.gov/products/GAO-15-656 (accessed February 2,2017). C. BeghinandAmaniElobeid,“The Impact oftheU.S. SugarProgram Redux,” Center for Agricultural andRural Development at Iowa State the-kids (accessed February 6,2017). University, May 2013, http://www.card.iastate.edu/products/publications/synopsis/?p=1183 (accessed February 3,2017). Marketing Service, “Federal MilkMarketing Orders,” U.S. Department ofAgriculture, November 17, 2015). There are alsomilkmarketing orders, butthey are different from fruitand vegetable marketing orders. See Agricultural November 17, 2015). http://trade.gov/media/Publications/pdf/sugar06.pdf (accessed March 21,2016). http://sugarreform.org/wp-content/uploads/2013/06/AgralyticaEconomicEffectsPaperJune2013.pdf (accessed August 4, 2016). http://www.ams.usda.gov/rules-regulations/moa/dairy (accessed November 17, 2015). , 135 S.Ct. 2419 (2015), http://www.supremecourt.gov/opinions/14pdf/14-275_c0n2.pdf (accessed High RiskSeries:AnUpdate, The Heritage Foundation | Foundation Heritage The The Hill , May 21,2014, http://thehill.com/policy/finance/206734-michelles-meals-turn-off- ” GAO–13–283, February 2013, pp. 198–199. heritage.org Report to Congress

, August 13,2015.

Issue Brief

No. Commerce, Justice, Science, and Related Agencies Eliminate the Office ofCommunity Eliminate theOffice ADDITIONAL READING America’s streets by 2000. COPS failed to add to COPS by failed America’s 2000. streets 100,000 additional officers, and failed at reduc failed at and officers, 100,000 additional Oriented Policing Services FY 2018. FY in million saves Oriented $158 proposal This(COPS). Services Policing of Community Office the Eliminate CALCULATIONS 30 Created in 1994, COPS add 1994, to 100,000 promised in Created RATIONALE RECOMMENDATION ing crime. ing law enforcement local and new officers to state alist alist Savings are expressed as budget authority as projected for FY 2018 in the CBO’s August 2016 baseline spending projections. spending baseline 2016 August CBO’s the in 2018 FY for projected as authority budget as expressed are Savings State and local officials, not government,thefederal not officials, local and State are responsible for funding the staffing levels of staffing the responsible forare funding police officers, COPS funds the day-to-day routine, funds police officers, COPS of for salaries the paying By police departments. functions of police and fire departments. In departments. fire of police and functions Ȗ Ȗ Ȗ Ȗ Those which are to remain in the State govern State the in remain to are which Those powers delegatedThe Constitu proposed by the with which last the power of taxation will, for the will, power the of taxation last which with objects, on external principally exercised be will tion to the federal government are few and defined. defined. few and government are federal tionthe to as war, peace, negotiation, and foreign commerce; foreign commerce; negotiation, and war, peace, as ments are numerous and indefinite. The former indefinite. numerous and ments are May 26, 2006. May 26, Foundation Heritage Cities,” Large in Grants of COPS Evaluation “Impact Muhlhausen, David B. Economy,” Stimulate Foundation the Not Will Funding Heritage Grant JAG COPS and “Byrne Muhlhausen, David B. before the Judiciary Committee, U.S. Senate, May 12, 2009. May 12, Senate, U.S. Committee, Judiciary the before No. wrote: James Madison 45, The Heritage Foundation | Foundation Heritage The Feder - - - - When Congress subsidizes local police departments police departments local subsidizes Congress When The COPS program has an extensive track record of record track extensive an has COPSThe program in this manner, it effectively reassigns to the federal the to federal manner, itreassigns effectively this in the responsibility of state and local governments. local and of state responsibility the and constitutional authority of state and local gov local and of authority state constitutional and grants also unnecessarily fund functions that are are that functions fund unnecessarily also grants government that responsibilities powers the and exclusively, governments. local and state to level wholly, at belongs local the almost notcrime if combat to ordinary responsibility The ernments. poor performance and should be eliminated. COPS should eliminated. and be poor performance fall squarely within the expertise, historical control, historical expertise, the within squarely fall which, in the ordinary course of affairs, concern of affairs, course ordinary the in which, the lives, liberties, and properties of the people, of the properties and liberties, lives, the objects the all to extend will States several the and the internal order, improvement, and pros and improvement, order, internal the and most part, be connected. The powers reserved to to reserved powers The connected. be part, most perity of the State. of the perity heritage.org

Center Data Analysis for Report Testimony on Economy No. 06-03, 06-03, No.

- - Commerce, Justice, Science, and Related Agencies

Eliminate Grants within the Office of Justice Programs

RECOMMENDATION Eliminate state and local grants administered by the Office of Justice Programs (OJP). This proposal saves $2.119 billion in FY 2018.

RATIONALE The majority of the programs under the OJP and are therefore regulated by state criminal law, umbrella deal with problems or functions that lie state law enforcement, and state courts. The fact within the jurisdiction of state and local govern- that thefts by juveniles occur in all states does not ments, and should therefore be handled by state mean that these thefts are a problem requiring and local officials. Grants from the OJP are given action by the federal government. to state and local governments for many criminal justice purposes, including local police officer sala- State and local officials, not the federal government, ries, state corrections, court programs, and juvenile are responsible for funding the state and local crim- justice programs. inal justice programs. The OJP subsidizes the routine, day-to-day functions of state and local crim- In order to address criminal activity appropriately, inal justice programs. When Congress subsidizes the federal government should limit itself to han- routine state and local criminal justice programs in dling tasks that state and local governments cannot this manner, it effectively reassigns to the federal perform by themselves and that the Constitution government the powers and responsibilities that commits to the federal government. The tenden- fall squarely within the expertise, historical control, cy to search for a solution at the national level is and constitutional authority of state and local gov- misguided and problematic. For example, juvenile ernments. The responsibility to combat ordinary delinquents and criminal gangs are a problem com- crime at the local level belongs almost wholly, if not mon to all states, but the crimes that they commit exclusively, to state and local governments. are almost entirely and inherently local in nature,

ADDITIONAL READING ȖȖ David B. Muhlhausen, “Byrne JAG and COPS Grant Funding Will Not Stimulate the Economy,” statement before the Judiciary Committee, U.S. Senate, May 12, 2009. ȖȖ David B. Muhlhausen, “Drug and Veterans Treatment Courts: Budget Restraint and More Evaluations of Effectiveness Needed,” testimony before the Subcommittee on Crime and Terrorism, Committee on the Judiciary, U.S. Senate, July 19, 2011. ȖȖ David B. Muhlhausen, “Get Out of Jail Free: Taxpayer-Funded Grants Place Criminals on the Street Without Posting Bail,” Heritage Foundation WebMemo No. 3361, September 12, 2011. ȖȖ David B. Muhlhausen, “The Second Chance Act: Budget Restraint and More Evaluations of Effectiveness Needed,” testimony before the Subcommittee on Crime, Terrorism, and Homeland Security, Committee on the Judiciary, U.S. House of Representatives, September 29, 2010. ȖȖ David B. Muhlhausen, “Where the Justice Department Can Find $2.6 Billion for its Anti-Terrorism Efforts,” Heritage Foundation Backgrounder No. 1486, October 5, 2001. ȖȖ David B. Muhlhausen, “The Youth PROMISE Act: Outside the Scope and Expertise of the Federal Government,” testimony before the Subcommittee on Crime, Terrorism, and Homeland Security, Committee on the Judiciary, U.S. House of Representatives, July 15, 2009.

CALCULATIONS Savings are expressed as budget authority as projected for FY 2018 in the CBO’s August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 31 Eliminate Violence Against Women Grants Act ADDITIONAL READING VAWA reduce, or mitigate, to prevent are programs VAWA these because should terminated be grants The principal reasons for the existence of for the existence the reasons principal The Eliminate Violence Against Women Violence 2018. FY Against (VAWA) in Act Eliminate million saves $83 proposal This grants. CALCULATIONS Using federal agencies to fund the routine opera routine the agenciesUsing federal fund to 32 RATIONALE RECOMMENDATION local governments could provide is a misuse of fed governments amisuse could provide is local resources as some funds go toward unnecessary unnecessary go toward some as funds resources are Savings are expressed as budget authority as projected for FY 2018 in the CBO’s August 2016 baseline spending projections. spending baseline 2016 August CBO’s the in 2018 FY for projected as authority budget as expressed are Savings through the federal government reduces the overall government federal the overall reduces the through and state tions that of domestic violence programs over, funneling state resources back to the states states the back to resources over, state funneling that concerns from adistraction and resources eral services should be funded and implemented and should funded be locally. services federal administration. federal Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Women Office Evaluations Were Problematic,” March 2002. March Were Problematic,” Evaluations Office Women Backgrounder U.S. Government Accountability Office, “Justice Impact Evaluations: One Byrne Evaluation was Rigorous; All Reviewed Violence Against Against AllViolence Reviewed Rigorous; was Evaluation Byrne One Evaluations: Impact Office,“Justice Accountability Government U.S. David B. Muhlhausen and Christina Villegas, “Violence Against Women Act: Reauthorization Fundamentally Flawed,” Heritage Foundation Foundation Flawed,” Heritage Fundamentally Reauthorization Act: Women Against “Violence Villegas, Christina and Muhlhausen David B. Muhlhausen, David B. Jr., Larkin J. Paul the province of the federal government. of federal More the province the No. 2673, March 29, 2012. 29, March 2673, No. “Send in the Lawyers: The House Passes the Senate’s Violence Against Women Act,” Women Against Senate’s the Violence Passes House The Lawyers: the in “Send “Violence Against Women Act Gives Grant Money to Misleading Organizations,” to Misleading Money Grant Gives Act Women Against “Violence The Heritage Foundation | Foundation Heritage The - - - “demonstrated a variety of methodological limita of methodological “demonstrated avariety The Government Accountability Office concluded Office GovernmentThe Accountability Despite being created in 1994, grant programs programs grant 1994, in Despite created being representative, scientifically rigorous experimental experimental rigorous scientifically representative, under the VAWA have not undergone nationally VAWA the under nationally undergone not have tions will produce definitive results.” Further, the Further,results.” produce definitive tions will whether to evalua the as concerns tions, raising of VAWA the evaluations previous that programs violence.of domestic andoccurrence effects the evaluations were not representative of the types of were notevaluations representative of types the evaluations of effectiveness. programs funded nationally by VAWA. the nationally funded programs heritage.org The Daily Signal, March 1, 2013. 1, March Signal, Daily The The Daily Signal, February 13, 2013. 13, February Signal, Daily The - - Commerce, Justice, Science, and Related Agencies

Eliminate the Legal Services Corporation RECOMMENDATION Eliminate the Legal Services Corporation (LSC). This proposal saves $484 million in FY 2018.

RATIONALE The LSC was created by the Legal Services Act of repeatedly listed LSC elimination among its defi- 1974 as a means to provide civil legal assistance to cit-reduction options, citing that many programs indigent clients. It does so by distributing federal receiving LSC grants already receive resourc- grant funds in one-year to three-year award incre- es from state and local governments and pri- ments to service areas throughout the United States vate entities. and its territories. The annual appropriations legislation specifies the types of activities for which the LSC also should be abolished because state and funds may be used, and also restricts certain uses, local governments, supplemented by donations such as for political activities, advocacy, demon- from other outside sources, already provide funding strations, strikes, class-action lawsuits, and cases for indigent legal defense and are better equipped involving abortion, partisan redistricting, and wel- to address the needs of those in their communities fare reform. who rely on these free services. By giving local entities sole responsibility for these activities, funds LSC grants do help provide high-quality civil legal can be targeted in the most efficient manner, and assistance to some low-income Americans. Nev- the burden can be removed from the federal deficit. ertheless, the Congressional Budget Office has

ADDITIONAL READING ȖȖ Kenneth F. Boehm and Peter T. Flaherty, “Why the Legal Services Corporation Must Be Abolished,” Heritage Foundation Backgrounder No. 1057, October 19, 1995. ȖȖ Congressional Budget Office, “Budget Options Volume 2,” August 6, 2009. ȖȖ National Legal and Policy Center Staff, “What the Legal Services Corporation Doesn’t Want Congress to Know,” National Legal and Policy Center, March 22, 2012.

CALCULATIONS Savings are expressed as budget authority as projected for FY 2018 in the CBO’s August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 33 Reduce Funding fortheDepartment ADDITIONAL READING A recent report by the Justice Department Inspec by JusticeA recent Department the report Reduce funding for the Department of Justice’s Civil Rights Division by 33 percent. This saves $49 million saves million $49 by percent. 33 Division This of for Justice’s Rights Department the Reduce Civil funding CALCULATIONS 34 (accessed February 3, 2017). This estimate assumes that the FY 2016 enacted spending level holds constant in FY 2017 and decreases at the at the decreases and 2017 FY in constant level holds spending enacted 2016 FY the that assumes estimate This 2017). 3, February (accessed RATIONALE RECOMMENDATION ing from public hiring to public to education. public from ing hiring intended abusiveto lawsuits filed and integrity mistrust.” 2018. FY in Savings equal 33 percent of the estimated FY 2018 spending level. spending 2018 FY estimated of the percent 33 equal Savings of Justice’s Department the in found as million level of $148.2 spending enacted 2016 FY the on based authority budget as expressed are Savings time when there is less discrimination than we than when less theretime discrimination is as Division Rights Civil the described tor General a dysfunctional division torn by “polarization and and by “polarization torn division a dysfunctional enforce progressive social ideology in areas rang areas ideology in social enforce progressive of Justice’s Civil RightsDivision same rate as discretionary spending (–0.32 percent) in FY 2018 as projected in the CBO’s most recent August 2016 baseline spending projections. projections. spending baseline 2016 recent August most CBO’s the in projected as 2018 percent) (–0.32 FY in spending discretionary rate as same FY 2017 Congressional Budget Submission, “General Legal Activities: Civil Rights Division,” https://www.justice.gov/jmd/file/822036/download https://www.justice.gov/jmd/file/822036/download Division,” Rights Civil Activities: Legal “General Submission, Budget Congressional 2017 FY Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ John Fund and Hans von Spakovsky, Hans and Fund John Adams, Christian J. U.S. Department of Justice Office of the Inspector General, “Review of the Operations of the Voting Section of the Civil Rights Division,” Division,” Rights Civil the of theSection of Voting Operations “Reviewthe of General, Inspector the of Office of Justice Department U.S. March 2013. 1 It is a division that has fought election has It that adivision is Injustice: Exposing the Racial Agenda of the Obama Justice Department Justice the Racial of the Obama Agenda Injustice: Exposing Obama’s Enforcer: Eric Holder’s Justice Department Justice Obama’s Enforcer: Eric Holder’s The Heritage Foundation | Foundation Heritage The 2 At a - - was fighting crucial civil rights battles. It has far far battles. has rights It civil crucial fighting was largest, far larger that in was in the 1960s when 1960s the it in was in that larger far largest, ing its efficiency and ability to protect the topublicprotect efficiency its and ing ability needed vigorouslymore to employees are than have ever had in our society, the division is athave society, ever our is its in had division the enforce civil rights and voting rights laws and its its and laws rights voting and rights enforce civil from discrimination. from budget can be significantly cut while maintain cutwhile significantly be budget can heritage.org (New York: HarperCollins/Broadside, 2014). York: (New HarperCollins/Broadside, (Washington, DC: Regnery Publishing, 2011). Publishing, Regnery DC: (Washington,

- Commerce, Justice, Science, and Related Agencies

Reduce Funding for the Department of Justice’s Environmental and Natural Resources Division

RECOMMENDATION Reduce funding for the Department of Justice’s Environmental & Natural Resources (ENR) Division by 33 percent. This saves $36 million in FY 2018.

RATIONALE The ENR Division of the Justice Department has lawsuits with extremist environmental groups that suffered an embarrassing string of defeats in the take environmental lawmaking out of the hands of courts because it has taken radical positions on Congress and put it in the hands of agencies, private environmental issues far outside the legal main- interests, and federal judges.5 The division’s budget stream.3 One federal court of appeals accused should be significantly reduced so that it will con- ENR Division lawyers of making legal arguments centrate on its core functions of defending the envi- in court that were “so thin as to border on the ronmental laws of the United States in a reasonable frivolous.”4 It has also colluded in “sue and settle” and commonsense manner.

ADDITIONAL READING ȖȖ J. Christian Adams, Injustice: Exposing the Racial Agenda of the Obama Justice Department (Washington, DC: Regnery Publishing, 2011). ȖȖ U.S. Department of Justice Office of the Inspector General, “Review of the Operations of the Voting Section of the Civil Rights Division,” March 2013. ȖȖ John Fund and Hans von Spakovsky, Obama’s Enforcer: Eric Holder’s Justice Department (New York: HarperCollins/Broadside, 2014).

CALCULATIONS Savings are expressed as budget authority based on the FY 2016 enacted spending level of $110.5 million as found in the Department of Justice’s FY 2017 Congressional Budget Submission, “General Legal Activities: Environmental and Natural Resources Division,” https://www.justice.gov/ jmd/file/822016/download (accessed February 3, 2017). This estimate assumes that the FY 2016 enacted spending level holds constant in FY 2017 and decreases at the same rate as discretionary spending (–0.32 percent) in FY 2018 as projected in the CBO’s most recent August 2016 baseline spending projections. Savings equal 33 percent of the estimated FY 2018 spending level.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 35 Eliminate theDepartmentofJustice’s ADDITIONAL READING The CRS budget should be entirely eliminated. budget CRS shouldThe entirely be eliminated. 2018 spending level. spending 2018 Community RelationsServices Rather than fulfilling its mandate of trying to be the be to trying of mandate its fulfilling than Rather 2018. FY saves $14 (CRS). in of This Justice’s Relations million Department the Service Community Eliminate CALCULATIONS 36 RATIONALE RECOMMENDATION raised tensions in local communities in recent in inci communities tensions local in raised helped organize and manage rallies and protests protests and rallies manage and helped organize Savings are expressed as budget authority as enacted for FY 2016 on p. 58 of the ‘Consolidated Appropriations Act, 2016 (H.R. 2029). This 2029). This (H.R. 2016 Act, Appropriations ‘Consolidated of the 58 p. on 2016 FY for enacted as authority budget as expressed are Savings dents. In the Zimmerman case in Florida, the CRS CRS the Florida, in case dents. Zimmerman the In peacemaker in community conflicts, the CRS has has the CRS conflicts, community in peacemaker estimate assumes that FY 2016 appropriations hold steady in FY 2017 and decrease at the same rate as discretionary spending growth (–0.32 (–0.32 growth spending discretionary rate as same at the decrease and 2017 FY in steady hold appropriations 2016 FY that assumes estimate Ȗ Ȗ Ȗ percent) in FY 2018 according to the CBO’s most recent August 2016 baseline spending projections. Savings equal the estimated $14 million FY FY million $14 estimated the equal Savings projections. spending baseline 2016 recent August to most CBO’s according the 2018 percent) FY in Ȗ Ȗ Ȗ John Fund and Hans von Spakovsky, Hans and Fund John Adams, Christian J. U.S. Department of Justice Office of the Inspector General, “Review of the Operations of the Voting Section of the Civil Rights Division,” Division,” Rights Civil the of theSection of Voting Operations “Reviewthe of General, Inspector the of Office of Justice Department U.S. March 2013. Injustice: Exposing the Racial Agenda of the Obama Justice Department Justice the Racial of the Obama Agenda Injustice: Exposing Obama’s Enforcer: Eric Holder’s Justice Department Justice Obama’s Enforcer: Eric Holder’s The Heritage Foundation | Foundation Heritage The - letter to the Attorney General. Attorney the letter to ment, leading the employeesment, the leading send to acomplaint of incompetence, have cited aculture CRS inside the against George Zimmerman. George against political decision making, and gross mismanage gross and decision making, political heritage.org (New York: HarperCollins/Broadside, 2014). York: (New HarperCollins/Broadside, (Washington, DC: Regnery Publishing, 2011). Publishing, Regnery DC: (Washington,

6 Other employees employees Other 7 - Commerce, Justice, Science, and Related Agencies

Reduce Funding for the Department of Justice’s Bureau of Alcohol, Tobacco, Firearms and Explosives

RECOMMENDATION Reduce funding for the Department of Justice’s Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) by 20 percent. This saves $263 million in FY 2018.

RATIONALE The ATF’s budget should be reduced to eliminate Representative Sensenbrenner even introduced resources that could be used for reckless operations a bill to eliminate the ATF because it is a “largely similar to Operation Fast & Furious. The ATF may duplicative” agency that “lacks a clear mission.”9 be the most scandal-ridden agency in the federal Sensenbrenner believes that enforcement work government. The agency has, according to Rep- should be transferred to the FBI and the Drug resentative James Sensenbrenner (R–WI), been Enforcement Agency. “branded” with decades of “high profile failures.”8

CALCULATIONS Savings are expressed as budget authority as projected for FY 2018 in the CBO’s most recent August 2016 baseline spending projections. Savings of $263 million equal 20 percent of the projected $1.316 billion in ATF spending for FY 2018.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 37 Extension Partnership Eliminate theHollings Manufacturing The Hollings Manufacturing Extension Partner Extension Manufacturing Hollings The Eliminate the Hollings Manufacturing Extension Partnership. This proposal saves $130 million in FY 2018. FY in saves $130 million proposal This Partnership. Extension Manufacturing Hollings the Eliminate CALCULATIONS 38 RATIONALE RECOMMENDATION manufacturers, and business advisers with the goal goal the with advisers business and manufacturers, Savings are expressed as budget authority as enacted for FY 2016 on p. 50 of the ‘Consolidated Appropriations Act, 2016 (H.R. 2029). This 2029). This (H.R. 2016 Act, Appropriations ‘Consolidated of the 50 p. on 2016 FY for enacted as authority budget as expressed are Savings ogy (NIST). The Hollings Manufacturing Exten Manufacturing Hollings The (NIST). ogy It managed is at manufacturers. operation directed growth (–0.32 percent) in FY 2018 according to the CBO’s most recent August 2016 baseline spending projections. spending baseline 2016 recent August to most CBO’s according the 2018 percent) (–0.32 growth FY in sion Partnership provides subsidies to consultants, provides subsidies consultants, to sion Partnership management consulting funded afederally ship is estimate assumes that FY 2016 appropriations of $130 million hold steady in FY 2017 and decrease at the same rate as discretionary spending spending discretionary rate as same at the decrease and 2017 FY in steady hold million of $130 appropriations 2016 FY that assumes estimate by the National Institute of Standards and Technol and of Standards by National Institute the The Heritage Foundation | Foundation Heritage The - - - Federal outcomes involvement market distorts which is corporate welfare, pure and simple, and and pure welfare, corporate is which not be playing arole development the not in playing be of business. should government The businesses. medium-size and picks winners and losers businesses— among and winners picks and of bettering the business practices of small and and of small practices business the of bettering should end. should heritage.org Commerce, Justice, Science, and Related Agencies

Eliminate the International Trade Administration RECOMMENDATION Eliminating the International Trade Administration (ITA) saves $512 million in FY 2018.

RATIONALE The ITA serves as a sales department for certain trade and drive up costs for both consumers and businesses, and promotes investment in the U.S., businesses. One ITA program is the International offering taxpayer-funded subsidies for businesses Buyer Program (IBP) through which the ITA sets up that promote their products overseas. Promoting a space “where foreign buyers can obtain assistance U.S. exports is also a task carried out by the Depart- in identifying potential business partners, and meet ment of Agriculture and the State Department, with U.S. companies to negotiate and close deals.” causing large areas of government overlap. The Private companies should facilitate their own busi- ITA’s protectionist policies, including antidumping ness meetings or do so through voluntary trade and countervailing duty laws, interfere with free associations—not on the taxpayers’ dime. ADDITIONAL READING ȖȖ Michael Sargent, Romina Boccia, Emily J. Goff, David B. Muhlhausen, and Hans A. von Spakovsky, “Cutting the Commerce, Justice, and Science Spending Bill by $2.6 Billion: A Starting Point,” Heritage Foundation Issue Brief No. 4220, May 12, 2014.

CALCULATIONS Savings are expressed as budget authority for FY 2018 as projected in the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 39 Development Administration Eliminate theEconomic ADDITIONAL READING The EDA provides taxpayer money and technical money technical EDAThe and provides taxpayer Eliminate the Economic Development Administration (EDA). This proposal saves $262 million in FY 2018. FY Economicin saves the $262 Development proposal (EDA). million This Eliminate Administration CALCULATIONS 40 RATIONALE RECOMMENDATION Savings are expressed as budget authority for FY 2018 as projected in the CBO’s most recent August 2016 baseline spending projections. spending baseline 2016 recent August most CBO’s the in projected as 2018 FY for authority budget as expressed are Savings taxpayer dollars to target local political pet proj political local target to dollars taxpayer assistance to economically distressed areas in the the in areas distressed economically to assistance one particular company or small segment of the company or small one particular benefit—injust cases many narrow avery with ects sector. private the including EDA The uses ects, form of “grants” and “investments” for local proj for “investments” local and form of “grants” Ȗ Ȗ Improved,” GAO–14–131, February 6, 2014. 6, February Improved,” GAO–14–131, Be Could Decisions ofSelection Award Documentation Administration: Development “Economic Office, Accountability Government U.S. The Heritage Foundation | Foundation Heritage The - - tance loans, the Agriculture Department’s rural rural Department’s Agriculture the loans, tance Small Business Administration’s assis Small disaster development programs, and others that Congress development Congress others that and programs, economic development the including programs, should eliminate. population. The EDApopulation. The one just is of about federal 180 heritage.org - Commerce, Justice, Science, and Related Agencies

Eliminate the Minority Business Development Agency

RECOMMENDATION Eliminate the Minority Business Development Agency. This proposal saves $33 million in FY 2018.

RATIONALE The Minority Business Development Agency hands procurement opportunities. By targeting certain out grants and runs federally funded management racial and ethnic groups for special government consulting operations, called business centers, in assistance, the agency is one key component of the over 40 locations. Part of the Department of Com- federal government’s affirmative action approach. merce, the Minority Business Development Agency The federal government should not provide spe- reported that its business centers assisted eligible cial assistance to businesses to procure federal businesses with 1,108 financings and contracts contracts; neither should the federal government worth over $3.9 billion in FY 2011.10 The agency target such assistance based on racial or eth- helps businesses identify and respond to federal nic considerations.

CALCULATIONS Savings are expressed as budget authority for FY 2018 as projected in the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 41 Eliminate CensusBureau Funding fortheAnnual ADDITIONAL READING The SPM is a relative poverty measure; rather than rather than measure; SPMThe arelative poverty is Supplemental Poverty Measure Report Eliminate U.S. Census Bureau funding for the annual supplemental poverty measure (SPM) report. This This (SPM) report. supplemental measure for poverty annual the funding Bureau Census U.S. Eliminate 42 RATIONALE RECOMMENDATION its income, as the official U.S. poverty measure does, does, measure poverty U.S. official the income,its as the SPM determines ahousehold’s SPMthe by determines status poverty determining whether ahousehold ondetermining poor based is proposal saves an unknown amount in FY 2018. FY in amount unknown saves an proposal Ȗ Ȗ November 9, 2011. 9, November Foundation Heritage the Wealth,’” ‘Spreads Measure New Poverty “Obama’s Sheffield, Rachel and Rector Robert The Heritage Foundation | Foundation Heritage The 11 holds. The SPM undergirds a“spread-the-wealth”holds. SPM The undergirds agenda, and it should and agenda, eliminated. be comparing its income its income the to of othercomparing house heritage.org Commentary 12 , - Commerce, Justice, Science, and Related Agencies

ENDNOTES 1. U.S. Department of Justice Office of the Inspector General, “A Review of the Operations of the Voting Section of the Civil Rights Division,” March 2013, https://oig.justice.gov/reports/2013/s1303.pdf (accessed January 13, 2016). 2. John Fund and Hans von Spakovsky, Obama’s Enforcer: Eric Holder’s Justice Department (New York: HarperCollins/Broadside, 2014). 3. Kimberly A. Strassel, “Greens Gone Wild,” The Wall Street Journal, April 9, 2013. 4. Evans v. U.S., 694 F.3d 1377, 1381 (Fed. Cir. 2012). 5. Andrew M. Grossman, “Regulation Through Sham Litigation: The Sue and Settle Phenomenon,” Heritage Foundation Legal Memorandum No. 110, February 25, 2014, http://www.heritage.org/research/reports/2014/02/regulation-through-sham-litigation-the-sue-and-settle- phenomenon. 6. Hans von Spakovsky, “Zimmerman Trial: The Holder Justice Department’s Latest Abuse of Power,” The Daily Signal, July 10, 2013, http://dailysignal.com/2013/07/10/zimmerman-trial-the-holder-justice-departments-latest-abuse-of-power/. 7. Hans von Spakovsky, “Corruption, Incompetence Scandal at DOJ’s Ferguson Unit Widens,” PJ Media, April 18, 2016. 8. News release, “Sensenbrenner Introduces the ATF Elimination Act,” Congressman Jim Sensenbrenner, January 12, 2017, http://sensenbrenner.house.gov/news/documentsingle.aspx?DocumentID=398088 (accessed February 2, 2017). 9. AWR Hawkins, “Lawmaker Proposes ‘ATF Elimination Act,’” Breitbart.com, March 6, 2015. The bill is H.R. 1329, 114th Congress. 10. Government Accountability Office, “Federal Efforts to Assist Small Minority-Owned Businesses,” GAO 12–873, September 2012, http://www.gao.gov/assets/650/648985.pdf (accessed January 18, 2017). 11. In FY 2016, the Census Bureau requested a total of $66.2 million for the Current Population Survey, under which the SPM operates. See Jennifer D. Williams, “FY 2016 Appropriations for the Census Bureau and Bureau of Economic Analysis,” Congressional Research Service, October 21, 2015, https://www.fas.org/sgp/crs/misc/R44141.pdf (accessed January 19, 2016). 12. Robert Rector and Rachel Sheffield, “Obama’s New Poverty Measure ‘Spreads the Wealth,’” Heritage FoundationCommentary , November 9, 2011, http://www.heritage.org/research/commentary/2011/11/obamas-new-poverty-measure-spreads-the-wealth.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 43

Defense 46 2018. FY in save million $85 would proposal one,percent this year reduction in a25 with outones programs the phasing join. By to but no new finish, to participants current allowing Force). Air for $175 the for $55 million Army, and the million for for Navy, the Marines, the million $23 million $87 (including programs JROTC fund to million received $304 2016,average. FY In four services the than at higher arate military the in enlisting uals lead individ to no programs the is evidence that responsible into but adults, grow there and mature demonstrably help to young enrollees the programs (JROTC) Corps Training Officer Junior Reserve 2018. would FY save in $195 million programs 2016. FY in $196 million to 2007 FY in $122 from million grown has category This Youth National Guard the Program. Challenge and STARBASE called a DOD education program include These programs.” military “civil troller calls DOD the what Comp defense are from cut spending should that be set ofAnother non-defense programs should eliminated. be for non-defense research funding This autism. epilepsy; and cancer; prostate and ovarian breast, including: issues non-defense medical research to 2016 appropriated $235 million alone Congress FY in or orthotics, post-traumatic stress such as DOD, the relevant to for are that issues research medical to goes funding some of this While then. since been appropriated by$11 Congress has billion 1992 and FY in by Congress budget. It started was DOD inside the ofexamples non-defense funding (CDMRP) one is of oldest the largest and Programs Research Medical Directed Congressionally The RATIONALE 2018. savesFY $514 in proposal million This capabilities. not military related to are that programs (DOD) Defense the Department fund have to used Administrations various and Congress RECOMMENDATION the DefenseDepartmentBudget Cut Non-Defense Spendingfrom 2 The programs should be phased out, should phased be programs The 1 Eliminating civil military The Heritage Foundation | Foundation Heritage The - - of approximately $200 million in fresh produce fresh in of million approximately $200 delivery collection and the toward resources and personnel, time, commits DLA ment the dollars, USDA the budget entitle While provides the DLA. the producetlement buy through to fresh dollars USDA use schools to enti allows which (DLA), cy Agen Defense (USDA) Logistics and Agriculture of Department U.S. the between a partnership Vegetable is and DODThe Fruit Fresh Program is highly uncertain. highly is level the as of savings included proposal, forare this savings No estimated mandate. this should repeal cometo renewable from by Congress 2025. sources by DOD the percent used 25 of electricity requires that mandate energy agreen imposed has Congress DOD. projects the across energy tive” Additionally, spent on over period “green” or same the “alterna show over data that was same $100the million However, concerns. over more security pressing change climate prioritizing from attention resulting and of time costs notdoes include internal the 2009, since actions this on climate-change-driven been spent has only shows $5 million that data ing of DOD publicly contract available search initial an While strength. not military greater related to but were Administration, for Obama priority the were “green” ahigh energy and change Climate of DOD’s the not part be budget. not is aDOD should but mission and this proposal, included for are this savings no thus estimated and USDA, the to program of this costs the passes DLA the budget not if The clear annually. are documents heritage.org

- - - - - Defense

ADDITIONAL READING ȖȖ Rachel Zissimos and Katie Tubb, “The New Administration’s Policy Should Reflect that Biofuels Cannot Meet Military Needs,” Heritage Foundation Issue Brief No. 4643, January 4, 2017. ȖȖ Senator Tom A. Coburn, “Department of Everything,” November 2012. ȖȖ Brian Slattery and Michaela Dodge, “Biofuel Blunder: Navy Should Prioritize Fleet Modernization over Political Initiatives,” Heritage Foundation Issue Brief No. 4054, September 24, 2013. ȖȖ Jack Spencer, “Capability, Not Politics, Should Drive DOD Energy Research,” Heritage Foundation WebMemo No. 3299, June 22, 2011.

CALCULATIONS Savings represent budgetary authority levels and were estimated based on FY 2016 enacted spending levels. This estimate assumes that the FY 2016 enacted levels hold steady in FY 2017 and decrease slightly in FY 2018 (–0.32 percent) in accordance with discretionary spending growth, according to the CBO’s most recent August 2016 baseline spending projections. CDMRP spending levels by category can be found at Congressionally Directed Medical Research Programs, “About Us: Funding History,” http://cdmrp.army.mil/about/fundinghistory (accessed February 6, 2017). Civil Military Program spending can be found at Under Secretary of Defense (Comptroller), “Fiscal year 2017 President’s Budget: Civil Military Programs,” February 2016, p. CMP-22, http://comptroller.defense.gov/Portals/45/Documents/defbudget/FY2017/budget_ justification/pdfs/01_Operation_and_Maintenance/O_M_VOL_1_PART_1/CMP_OP-5.pdf (accessed February 6, 2017). JROTC spending levels are found at Department of the Navy, “Fiscal Year 2017 Budget Estimates: Operation and Maintenance, Navy (OMN),” February 2016, p. 397, http://www.secnav.navy.mil/fmc/fmb/Documents/17pres/OMN_Vol1_book.pdf (accessed February 6, 2017) for the Navy; Department of the Navy, “Fiscal Year 2017 Budget Estimates: Operation and Maintenance, Marine Corps,” February 2016, p. 117, http://www.secnav.navy.mil/fmc/ fmb/Documents/17pres/OMMC_Book.pdf (accessed February 6, 2017) for the Marine Corps; Department of the Army, “Fiscal year 2017 Budget /Estimates: Volume 1–Operation and Maintenance, Army,” February 2016, p. 456, https://www.asafm.army.mil/Documents/OfficeDocuments Budget/budgetmaterials/fy17/opmaint//oma-v1.pdf (accessed February 6, 2017) for the Army; and Department of the Air Force, “Fiscal Year 2017 Budget Estimates: Operation and Maintenance, Air Force–Volume 1,” p. 536, http://www.saffm.hq.af.mil/Portals/84/documents/FY17/AFD- 160205-032.pdf?ver=2016-08-24-101954-513 (accessed February 6, 2017) for the Air Force. JROTC spending totals $340 million across the four defense branches, and this spending level is reduced by 25 percent in FY 2018, generating savings of $85 million.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 47 48 billion. of $1.43 subsidy 2018 FY estimated the from million of $286 reduction percent a20 assume savings The projections. spending baseline 2016 recent August most CBO’s the in projected as percent) (–0.32 2018 FY in spending discretionary rate as same at the 2017, decreases FY in and steady level holds authority budget billion $1.435 the that assumes estimate This 2017). 6, February (accessed justification/pdfs/06_Defense_Working_Capital_Fund/DeCA_FY2017_PB.pdf Agency, “Fiscal Year 2017 President’s Budget,” pp. 15 and 16, http://comptroller.defense.gov/Portals/45/Documents/defbudget/FY2017/budget_ Commissary Defense in found as billion level of $1.435 subsidy enacted 2016 FY the on based authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING 2016, FY $1.435In subsidy the billion. was operations. their fund up enough prices fully the to do not mark commissaries the exchanges, the Unlike workforce. subsidy pay to for civilian their annual an (DeCA), Agency rely on by Defense the Commissary run are which appropriations. Commissaries, direct on revenue rather the than relying sales their from self-sustaining, are of exchanges the ently. three All differ managed are exchanges and Commissaries one Corps. for Navy, the another for and Marine the (exchanges),stores Force, Air and one for Army the general-retail separate three has ies, military the addition In commissar to of military. branches the all to available stores, anetworkies, is of grocery operated by DOD. the One commissar of the them, systems retail different four are There dependents. members their and military network serve to retail separate and extensive an has DODThe currently RATIONALE order FY in more in 2018. provide goods to efficiently. systems million saves$286 proposal This commissary subsidies combine by percent, and 20 and exchange its should Defense reduce commissary The Department RECOMMENDATION and ReduceCommissary Subsidies andCommissariesCombine MilitaryExchanges Ȗ Ȗ Congressional Budget Office, “Reducing the Deficit: Spending and Revenue Options,” March 2011. March Options,” and Revenue Spending Deficit: the “Reducing Office, Budget Congressional Foundation Heritage Department,” Defense the in Efficiency Increase and to Save Money, “How Processes, Reform Pollack, Julia and Eaglen Mackenzie Backgrounder No. 2507, January 10, 2011. 10, 2507, No. January The Heritage Foundation | Foundation Heritage The - - - retail outlets operate, it is reasonable to expect that that outlets operate, expect to it reasonable is retail and grocery where sufficientprivate areas those In few or no subsidies by provided being taxpayers. with to members goods access affordable service ing of the provid goal with should effort continue this Secretary the and Congress commissaries. and es common management of exchang the toward steps of Defense take to Secretary the allows (NDAA) 2017 FY The National Defense Authorization Act increased prices. increased the them cushion from to for used be groceries could which apre-loaded card, them credit with employed could be system needs-based provide to members, a for most junior the service hardship out completely.phased order In prevent to fiscal could be exchanges and government commissaries heritage.org

- - Defense

Close Domestic Dependent Elementary and Secondary Schools

RECOMMENDATION Close the Defense Department’s Domestic Dependent Elementary and Secondary Schools (DDESS) on military bases in the continental United States. Based on a phased-in closing with a 25 percent reduction in total spending in year one, this proposal saves $150 million in FY 2018.

RATIONALE The DOD currently operates over 170 schools $360 million in FY 2007) and have more staff per around the world, including 62 schools in the Unit- students than DOD overseas schools. The cost per ed States. While overseas schools supporting mili- student in DDESS schools is roughly double the tary dependents make sense, the domestic schools national average. are a legacy system from the years of segregation that should be re-examined. DDESS operates 62 There is no need for the military to be operating domestic schools in seven states (Alabama, Georgia, schools in these states, and the Pentagon should Kentucky, New York, North Carolina, South Caro- promptly take action to initiate the process to close lina, and Virginia), the Territory of Guam, and the the schools and transfer military dependents to Commonwealth of Puerto Rico. States with major local school systems. The necessary amount of military bases that do not have DDESS schools are Impact Aid would then be provided to the local Florida, Texas, and Colorado. The domestic schools school systems to cover the incremental cost to edu- cost the DOD over $600 million in FY 2016 (versus cate the students.

ADDITIONAL READING ȖȖ Fiscal Commission, “$200 Billion in Illustrative Savings [for 2015],” November 12, 2010. ȖȖ Senator Tom A. Coburn, “Department of Everything,” November 2012.

CALCULATIONS Savings are expressed as budget authority and are based on the FY 2016 enacted spending level of $602 billion for DDESS, as found in Department of Defense, “Fiscal Year 2017 Budget Estimates Department of Defense Dependents Education (DoDDE),” p. DoDDE-327, http:// comptroller.defense.gov/Portals/45/Documents/defbudget/FY2017/budget_justification/pdfs/01_Operation_and_Maintenance/O_M_VOL_1_ PART_1/DoDDE-OP-5.pdf (accessed February 6, 2017). This estimate assumes that the FY 2016 level holds constant in FY 2017 and decreases at the same rate as discretionary spending (–0.32 percent) according to the CBO’s most recent August 2016 baseline spending projections. The estimated savings assume a phased-in reduction in DDESS spending, amounting to a 25 percent cut in FY 2018.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 49 50 implemented. fully once per year billion $6 than more year, and first the in billion save $3.9 would proposal this that estimates commission The report. final its in outlined 6 as Recommendation MCRMC’s of the implementation the on based are Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING costs. reducing also members while family military options and for access increase would dramatically system insurance health menting aprivate-sector members much choicefamily or flexibility.Imple military not does and give expensive both is system dependents. This for military care providing into evolved has system care health much of military the combat, but in when they are particularly uniform, for men women the able must be and care to in tary members. service Medicare-eligible for accruals care health on billion another $6.6 retiree and ment spent $32.9 Program on billion Health its 2016, FY In Defense the Depart pressure. upward of personnelportion the budget, have faced and represent costs asignificant care health Military RATIONALE appropriations authorization2018, both and but changes. would require saves $3.9 FY proposal in billion members. This family option for military insurance health private-sector a by introducing system care health military’s reform the compensation. must next Congress military reforming step toward first asignificant took 2016 FY the Congress In National Defense Authorization Act, RECOMMENDATION Reform MilitaryHealth Care Ȗ Ȗ Commission: FinalReport Commission: Commission, Modernization Retirement and Compensation Military Foundation Heritage Families,” Their and Members Service Military for Retirement and Care Health Improving Dream: American the “Saving Spring, Baker Backgrounder , January 2015, Appendix D, 262. p. Appendix 2015, , January No. 2621, November 17, November 2621, 2011. No. The Heritage Foundation | Foundation Heritage The 3 The mili - - - Report of the Military Compensation and Retirement Modernization Retirement Modernization and Compensation of the Military Report Military Compensation and Retirement Moderniza Retirement and Compensation Military chartered 2015, congressionally the January In years. future in more significantly and year employees, would save which $1.4 first the in billion federal by civilian used currently system the to dependents their and members service moving A2011 Heritage Foundationplan. proposed report implement to exist of proposals such a A variety more in the future. more the in and year would save first $3.9 the in billion this that MCRMC The estimated plans. insurance health cial dependents aselection from choose to of commer includedand arecommendation military allow to report final its issued tion (MCRMC) Commission heritage.org 4 - - Defense

Increase Use of Performance-Based Logistics RECOMMENDATION The Department of Defense should increase the use of the performance-based-logistics (PBL) method in weapon-systems maintenance and sustainment. This proposal saves $9 billion in FY 2018 but requires changes in both authorization and appropriations bills.

RATIONALE To operate a weapon system, the DOD must pay the PBL method emphasizes the readiness of the for the full life-cycle cost of the equipment, which platform as the desired outcome. includes the development and procurement of the system, as well as the far more costly maintenance The benefits of PBL have been known in the Penta- and sustainment of the weapon system. The DOD gon for a while, and are even listed as the preferred spends about $90 billion on maintenance and sus- practice in DOD acquisition regulations. A DOD tainment of weapon systems each year.5 report has also verified that PBL practices, when implemented correctly, lead to both cost savings PBL is a proven method used for sustainment work and improved system performance.6 That being that enhances the military capability and avail- said, PBL is not appropriate for all systems and ability of weapon systems at a lower cost. Rather should be applied judiciously. Furthermore, exist- than measuring stovepipe metrics, such as number ing barriers and cultural biases against PBL would of aircraft repaired or the quantity of repair parts make a universal application unfeasible. For those acquired, the PBL approach uses metrics that mea- reasons, cost savings for the effort vary from $9 bil- sure whether the system is meeting the capability lion a year to $32 billion a year.7 requirements for the warfighters. In other words,

ADDITIONAL READING ȖȖ Baker Spring, “Performance-Based Logistics: Making the Military More Efficient,” Heritage Foundation Backgrounder No. 2411, May 6, 2010. ȖȖ Mackenzie Eaglen and Julia Pollack, “How to Save Money, Reform Processes, and Increase Efficiency in the Defense Department,” Heritage Foundation Backgrounder No. 2507, January 10, 2011.

CALCULATIONS Savings are expressed as budget authority and were calculated based on a range of estimated savings from two reports: John Boyce and Allan Banghart, “Performance Based Logistics and Project Proof Point,” Defense AT&L: Product Support Issue (March–April 2012), http://www.dau.mil/ pubscats/ATL%20Docs/Mar_Apr_2012/Boyce_Banghart.pdf (accessed February 6, 2017), and Aerospace Industries Association, “Modernizing Defense Logistics,” June 25, 2009, https://www.aia-aerospace.org/assets/paper_v1_0_6_25_09_rr.pdf (accessed February 6, 2017). The estimates of cost savings range from a notably conservative, or low, level of $9 billion per year to $32 billion per year. Heritage conservatively assumes that the DOD would initially realize the lowest range of these savings, at $9 billion per year in FY 2018, with that figure growing to $32 billion per year over the 10-year period (growing at an annual rate of 15.1 percent).

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 51 52 levels. at 2011 terms real in constant held were spending if exist thatwould the levels and levels 2018 FY projected between difference the equal savings The dollars. 2018 real, reflect to inflation for increased levels, enacted 2011 to levels FY the projected 2018 FY these compared Heritage 2017). 6, February (accessed Book.pdf 2017“FY Budget Justification,” http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2017/FY2017_Budget_Request_Overview_ Department, Defense U.S. the in contained all documents budget multiple in found be can levels spending 2016 FY projections. spending baseline 2016 recent August percent) (–0.32 to most CBO’s according the spending discretionary rate as same at the decreases and 2017 FY in constant level holds 2016 FY the that assumes estimate This levels. spending enacted 2016 FY on were based and authority budget represent Savings CALCULATIONS of After $103 2012. FY apeak to in billion 2007 FY $75 in from billion increased has funding wide Defense- accounts. budget “defense-wide” through agencies funded some and joint are capabilities Force). (Army, Navy, Air departments and Defense DOD’s the military budget three within located is and capability fighting of military’s the bulk The produce modest and savings. curtailed be likely can some of growth mission-driven, the legitimately may be growth some of this decade. While past the over significantly grown has commands, combatant of the departments of military not part are that of entities consists which DOD The Fourth Estate, RATIONALE 2018. FY saves defense $102 proposal in agencies’ 2011 Estate” to levels. spending “Fourth million This Return RECOMMENDATION Return to2011 DefenseAgencies Levels The Heritage Foundation | Foundation Heritage The cy, Defense Legal Services Agency, Washington and cy, Services Defense Legal Agen Management Contract Defense Agency, Audit 2011 levels: FY to Defense Contract should return four defense-wide At least accounts held constant. levels they shouldspending 2011, and since be levels. Some defense agencies have reduced their 2011 defense FY to Estate agencies should return necessity, Fourth military Unless aclear there is 2016. $100 back to FY in billion growing it alowsequestration, fell to of before billion $94 in FY 2018. FY in would save $103 This million Service. Headquarters heritage.org - Defense

Reduce Excess Base Infrastructure RECOMMENDATION Reduce excess base infrastructure. Heritage does not include any estimated savings in FY 2018, but this proposal will produce up to $2 billion in savings annually once implemented.

RATIONALE Since the end of the Cold War, the Department of Congress routinely blocks DOD efforts to right-size Defense has tried to reduce its physical infrastruc- their infrastructure. The last time the DOD was ture (bases and facilities) to match current military able to do this was during the 2005 Base Realign- needs. Today, the U.S. military needs to grow in ment and Closure (BRAC) process. Since 2012, the size, but the infrastructure supporting the military DOD has asked for BRAC authority every year, and should be thoroughly re-examined. According to every year Congress has rejected it. At the same recent DOD estimates, the military has approxi- time that Congress works to expand the mili- mately 22 percent excess capacity, ranging from 7 tary, Congress should allow the DOD to conduct percent in the Navy to 33 percent in the Army.8 As a rigorous and transparent review of its current the military grows, it is unlikely to need the same and future infrastructure needs, including clos- types of facilities it needed in the 1980s. While some ing bases and facilities as appropriate. While this excess infrastructure may be worth keeping, as a process will come with an up-front cost, DOD hedge against future needs, the DOD cannot even estimates that once fully implemented it could save thoroughly analyze the issue today due to congres- $2 billion annually. sional restrictions.

ADDITIONAL READING ȖȖ Michaela Dodge, “Beyond BRAC: Global Defense Infrastructure for the 21st Century,” Heritage Foundation Backgrounder No. 2791, May 3, 2013. ȖȖ Joe Gould and Aaron Mehta, “Pentagon to Congress: We Need Base Closures,” Defense News, April 15, 2016. ȖȖ William D. Hartung, “A New BRAC Round Would Boost Readiness, Save Billions,” The Hill, May 21, 2014.

CALCULATIONS Although Heritage does not include any savings from this proposal for FY 2018, the Department of Defense estimates that once fully implemented, a BRAC would save $2 billion annually. FY 2017 Defense Budget Overview, pp. 2–4, http://comptroller.defense.gov/Portals/45/ Documents/defbudget/fy2017/FY2017_Budget_Request_Overview_Book.pdf (accessed February 6, 2017).

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 53 54 million. $116 equals billion level of $5.809 2018 Two FY estimated of the percent projections. spending baseline 2016 recent August to most CBO’s according the 2018, percent)(–0.32 FY in spending discretionary rate as same at the decreases and 2017 FY in constant level holds this that assumes estimate This BAH. on billion $5.826 spent DOD the 2016, FY In 2021. to FY in 8percent rising 2018, by FY in 2percent costs BAH reduce would approach aphased-in that estimates Heritage costs), housing actual affect and behaviors change could (and allowances accurate more uncertain is level of savings exact the While CALCULATIONS Ȗ ADDITIONAL READING It solely is costs of BAH. the the defray to designed of purpose the amischaracterization is bers.” This money mem out of service of pockets the “taking it that is others. Opponents claim and of change the tion members from of House the of Representatives of face opposi the in retreated but ultimately costs, housing validated to return attempted to Congress tion.” consideration the In 2017 of FY the NDAA, compensa “extra as retained be for housing can money that they what pay above expectation, any notmembers entitled are to, nor should they have adequate Service housing. mustbers pay obtain to mem on of amount money the based be service that should compensation. Housing allowances military members not is help pay for service This housing. for Housing (BAH). DODThe spent Allowance Basic over in billion $5.8 RATIONALE 2018. FY in saves $116 million proposal This housing spending. actual match better to for Housing (BAH) Allowance Reform Basic the RECOMMENDATION Reform theBasicAllowance forHousing Ȗ congressional_budget/pdfs/FY2017_pdfs/SASC/SASC_Report-CRPT-114srpt255.pdf (accessed February 2, 2017). Year 2017,” Fiscal for Act http://www.dtic.mil/ Authorization 163, p. Defense “National Report, Committee Services Armed Senate 9 This allowance is designed to to designed is allowance This The Heritage Foundation | Foundation Heritage The - - - - service members based on what they actually spend, on members they actually what based service for married allowance proposed an ally, Congress members spend on Addition housing. service that proof (a or mortgage) lease of of amount money the on evidentiary based allowance an to BAH the ing considered Congress return 2017 FY the In NDAA, costs. ing hous actual their than more BAH in million $200 members receive service married that estimated of Yet, housing. Audit report Agency Army aU.S. would save an estimated $116 million in FY 2018. FY in $116 million estimated would save an This 2018 FY the NDAA. with beginning allowances housing more in should accurate phase Congress completely are and would appropriate. reduce costs changes These opposed adouble to as allowance. heritage.org - - - Defense

End Renewable Energy Mandates in the Department of Defense

RECOMMENDATION End renewable energy mandates in the Department of Defense. This proposal has uncertain savings and thus none are included for FY 2018.

RATIONALE Such mandates undermine the incentive for pro- meeting the need.”11 Under the Obama Administra- ducers of renewable energy to develop competition, the Departments of Defense, Energy, and Agri- tively priced products, thereby impeding market- culture used funds through the Defense Production place diversity. In particular, under Section 2911(e) Act and Commodity Credit Corporation to fund of Title 10 of the United States Code, the Defense purchases of expensive, uncompetitive biofuels Department is obligated to produce or procure 25 while hiding true costs from taxpayers. Congress percent of the energy consumed in DOD facilities has also unnecessarily constrained possible fueling from renewable sources by 2025. This mandate, options with a greenhouse gas emissions cap in the which is forcing the Pentagon to expend ever more Energy Independence and Security Act of 2007 by resources on renewable energy rather than on mili- forbidding alternative fuels with lifecycle green- tary capability, should be ended immediately.10 house gas emissions that exceed those of conventional petroleum. In regard to operational energy initiatives, all programs should be driven by their contribution to Fuel is as much an asset as it is a point of vulnera- military capability or their cost-saving potential. bility for the military. In order to protect taxpayers Accordingly, Congress should remove grandfather from undue energy expense by the DOD, Congress clauses that circumvent requirements that all fed- should remove technology-specific and fuel-specific eral energy investments be “the most cost effective, mandates from the military. expedient, and practical alternative method for

ADDITIONAL READING ȖȖ Brian Slattery and Michaela Dodge, “Biofuel Blunder: Navy Should Prioritize Fleet Modernization over Political Initiatives,” Heritage Foundation Issue Brief No. 4054, September 24, 2013. ȖȖ Jack Spencer, “Capability, Not Politics, Should Drive DOD Energy Research,” Heritage Foundation WebMemo No. 3299, June 22, 2011.

CALCULATIONS While this proposal will almost certainly improve efficiency and generate significant cost savings, Heritage does not have a reliable estimate of the costs of the Defense Department’s recent renewable energy mandates, and does not include any estimated savings here.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 55 56 11. 10. 9. 8. 7. 6. Ibid. 5. 4. 3. 2. 1. ENDNOTES Service, July28,2014, p. 14, https://www.fas.org/sgp/crs/natsec/R43118.pdf (accessed February 2,2017). Jared T. Brown andDaniel H.Else, “The Defense Production Act of1950: History, Authorities, andReauthorizaton,” Congressional Research http://www.heritage.org/research/reports/2011/06/capability-not-politics-should-drive-dod-energy-research. Jack Spencer, “Capability, NotPolitics, ShouldDrive DODEnergy Research,” HeritageFoundation 2016, p. 16,http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2017/fy2017_m1.pdf (accessed February 2,2017). Under Secretary ofDefense (Comptroller), “Department ofDefense Budget FiscalYear 2017L MilitaryPersonnel Programs (M-1),” February http://www.defensenews.com/story/defense/2016/04/15/pentagon-requests-brac/83082038/ (accessed February 2,2017). Joe GouldandAaron Mehta, “Pentagon to Congress: We Closures,” NeedBase “PerformanceBanghart, Logistics Based andProject Proof Point.” http://www.heritage.org/research/reports/2010/05/performance-based-logistics-making-the-military-more-efficient, and Boyce and Baker Spring,“Performance-Based Logistics: MakingtheMilitary More Efficient,” Heritage Foundation 2012), p. 30, http://www.dau.mil/pubscats/ATL%20Docs/Mar_Apr_2012/Boyce_Banghart.pdf (accessed December 29, 2015). John Boyce “Performance andAllanBanghart, Logistics Based andProject Proof Point,” dream-improving-health-care-and-retirement-for-military-service-members. Heritage Foundation Baker Spring,“Saving theAmericanDream: Improving HealthCare andRetirement for MilitaryService Members andTheir Families,” February 2,2017). http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2017/FY2017_Budget_Request_Overview_Book.pdf (accessed Under Secretary ofDefense (Comptroller), “Defense Budget Overview: FiscalYear 2017 Budget Request,” February 2016, p. 6–2, 032.pdf?ver=2016-08-24-101954-513 (accessed Estimates: Operation andMaintenance, AirForce–Volume 1,” p. 536, budgetmaterials/fy17/opmaint//oma-v1.pdf (accessed February 2,2017); andDepartment oftheAirForce, “FiscalYear 2017 Budget Volume 1–Operation andMaintenance, Army,” February 2016, p. 456, https://www.asafm.army.mil/Documents/OfficeDocuments/Budget/ fmb/Documents/17pres/OMMC_Book.pdf (accessed February 2,2017); Department oftheArmy, “Fiscalyear 2017 Budget Estimates: “Fiscal Year 2017 Budget Estimates: Operation andMaintenance, MarineCorps,” February 2016, p. 117, http://www.secnav.navy.mil/fmc/ http://www.secnav.navy.mil/fmc/fmb/Documents/17pres/OMN_Vol1_book.pdf (accessed February 2,2017); Department oftheNavy, Department oftheNavy, “FiscalYear 2017 Budget Estimates: Operation andMaintenance, Navy (OMN),” February 2016, p. 397, pdf (accessed February 2,2017). Portals/45/Documents/defbudget/FY2017/budget_justification/pdfs/01_Operation_and_Maintenance/O_M_VOL_1_PART_1/CMP_OP-5. Department ofDefense, “FiscalYear 2017 President’s Budget, CivilMilitaryPrograms,” February 2016, http://comptroller.defense.gov/ Backgrounder No. 2621, November 17, 2011, http://www.heritage.org/research/reports/2011/11/saving-the-american- The Heritage Foundation | Foundation Heritage The February 2,2017). http://www.saffm.hq.af.mil/Portals/84/documents/FY17/AFD-160205- heritage.org Defense News

Defense AT&L: Product SupportIssue , April15, 2016, WebMemo Backgrounder

No. 3299, June22,2011,

No. 2411, May 6,2010, (March–April

Energy and Water Development and Related Agencies 58 Program. Partnership Institution Serving Minority the cancelling plus components, budget five for levels funding 2014 FY on cap ahard total of placing combined the equals million of $466 Savings projections. spending baseline 2016 recent August most CBO’s the in percent) (–0.32 projected as spending discretionary rate as same at the decrease and 2017 FY in steady hold levels 2016 FY the that assumes Table Heritage by Statistical Appropriation.” 2017 “FY of Energy’s Department the from levels spending estimated on based were calculated and authority budget as expressed are Savings CALCULATIONS Ȗ ADDITIONAL READING following the return 2018, and FY in of $15 million asavings with Program, Partnership Institution Serving Minority the should cancel Congress not. is support for and non-weapons programs increase an entirely is necessary, ons programs for nuclear weap increase this While years. ing com the in spending increase to Administration nuclear of Obama forces the U.S. drove review recent The negativedefense-related activities. $16 ly $17 between and billion fund to billion rough year, Each DOE the allotted is Department. operated by Defense the are that weapons and DOEThe responsible is for nuclear the reactors RATIONALE 2018. FY in million saves $466 proposal This nuclear programs. weapons country’s the contribute to do notthat directly programs (NNSA) Administration National Nuclear (DOE) Security of Energy Department in growth Halt RECOMMENDATION on Weapons Programs Nuclear SecurityAdministration Spending Focus theDepartmentofEnergy’s National Ȗ January 4, 2013. Foundation Stop,” Heritage Must Modernization Switch and Nuclear on “Bait Spring, Baker and Dodge Michaela The Heritage Foundation | Foundation Heritage The - - - Ȗ Ȗ Ȗ dollars): nal 2014 FY their to budget levelsprograms nomi (in Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Materials Transparency (now under “Nuclear Transparency Materials Warhead Dismantlement Fissile and million.) $12 (Saves Security Cyber TechnologyInformation and (Saves $72 Asset million.) Transportation Secure million.) Clean-Up (Saves $365 Defense Environmental million.) $2 (Saves Programs Security and Nuclear Safeguards million.) $1 (Saves Verification”) heritage.org 1 Backgrounder

No. 2755, 2755, No. - Energy and Water Development and Related Agencies

Return Funding for the DOE Office of Nuclear Physics to FY 2008 Levels

RECOMMENDATION Reduce funding for the DOE Office of Nuclear Physics to FY 2008 levels. This proposal saves $128 million in FY 2018.

RATIONALE Under the Office of Science, the Office of Nucle- universities and federally sponsored research facil- ar Physics supports theoretical and experimental ities (also called user facilities).2 Funding for the research in the composition of and interactions Nuclear Physics program has become unaffordable within nuclear matter. The DOE and the Nation- in tight fiscal conditions. Program funding should al Science Foundation conduct nearly all basic be returned to the inflation-indexed FY 2008 nuclear physics research in the country: The DOE amount of $487 million in FY 2018 (actual FY 2008 provides over 90 percent of the nuclear science spending was $424 million)—a $128 million reduc- research funding in the U.S., which is employed at tion from its projected FY 2018 level of $615 million.

ADDITIONAL READING ȖȖ Nicolas D. Loris, “Department of Energy Budget Cuts: Time to End the Hidden Green Stimulus,” Heritage Foundation Backgrounder No. 2668, March 23, 2012. ȖȖ James Jay Carafano, Jack Spencer, Bridget Mudd, and Katie Tubb, “Science Policy: Priorities and Reforms for the 45th President,” Heritage Foundation Backgrounder No. 3128, June 13, 2016.

CALCULATIONS Savings are expressed as budget authority and were calculated by comparing current spending levels to estimated levels assuming that FY 2008 spending had increased for inflation only, based on the personal consumer expenditures (PCE) measure and as projected for FY 2017 and 2018 by the CBO. The FY 2016 enacted level of $617.1 million can be found in U.S. Department of Energy, “FY 2017 Statistical Table by Appropriation,” p. 7, https://energy.gov/sites/prod/files/2016/02/f29/FY2017BudgetStatisticalTablebyAppropriation_0.pdf (accessed February 7, 2017). Heritage assumes that the FY 2016 level holds steady in FY 2017 and decreases at the same rate as discretionary spending (–0.32 percent) according to the CBO’s most recent August 2016 baseline spending projections (a projected $615.1 million appropriation level for 2018). The FY 2008 spending level of $423.7 million equals $486.6 million in 2018 dollars.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 59 60 dollars. 2018 in million $403.4 equals million level of $351.2 spending 2008 FY The level 2018). for appropriation million (a $619 projected projections spending baseline 2016 recent August percent) (–0.32 to most CBO’s according the spending discretionary rate as same at the decreases and 2017 FY in steady holds level 2016 FY the that assumes Heritage 2017). 7, February (accessed files/2016/02/f29/FY2017BudgetStatisticalTablebyAppropriation_0.pdf 7, Table p. by Statistical Appropriation,” 2017 https://energy.gov/sites/prod/ of Energy, “FY Department U.S. in found be can million level of $621 enacted 2016 FY The CBO. by the 2018 and 2017 FY for projected as and measure PCE on the only, based inflation for increased had spending 2008 FY that assuming levels to levels estimated spending current by comparing were calculated and authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING of basicEnergy aspects some of most important the arguably are and tion for scientific breakthroughs lay founda the models These can environments. ematics, computer network science, integrated and DOE’s the appliedadvance math mission through to computer testing simulations, and modeling, Sciences under of Office the conducts program This RATIONALE 2018. FY in $216 million saves proposal This levels.2008 FY to spending Computing Scientific Reduce Research DOE Advanced RECOMMENDATION to FY2008Levels Return Advanced ScientificComputingResearch Ȗ Ȗ Foundation Foundation Heritage 45th the for President,” Reforms and Priorities Policy: Tubb, Katie “Science and Mudd, Spencer, Bridget Jack Jay Carafano, James 2012. 23, March Foundation Heritage Stimulus,” Green Hidden to the End Time Cuts: Budget of Energy “Department D. Loris, Nicolas Backgrounder No. 3128, June 13, 2016. 13, June 3128, No. The Heritage Foundation | Foundation Heritage The - - 2008 spending was $351 million). was spending 2008 (actual tion-indexed levels million 2008 of $403 FY infla the to should returned be funding straints, con today’s fiscal orderbudget, in within live and to consistentlyof a expanding beneficiary been the also has program this research—but Department heritage.org Backgrounder No. 2669, 2669, No.

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Eliminate the DOE Advanced Research Projects Agency–Energy Program

RECOMMENDATION Eliminate the Advanced Research Projects Agency–Energy (ARPA-E) program. This proposal saves $302 million in FY 2018.

RATIONALE ARPA-E is a federal program designed in 2007 Federal scientific research and development fund- to fund high-risk, high-reward projects on which ing must be rationalized to cut waste and reign in the private sector would not embark on its own. federal spending to either meet specific government ARPA-E also has the goal of reducing energy objectives or contribute to basic research where the imports, increasing energy efficiency, and reduc- private sector is not already working. In 2013, the ing energy-related emissions, including green- DOE had the fourth-largest research-and-devel- house gases. opment (R&D) budget in the federal government.4 Government projects that have become commer- ARPA-E does not always seem to follow its own clear cial successes—the Internet, computer chips, the goals: The federal government has awarded several global positioning system (GPS)—were not initially ARPA-E grants to companies and projects that are intended to meet a commercial demand but were neither high-risk nor something that private industry developed for national security needs. Entrepre- cannot support. These problems with ARPA-E were neurs saw an opportunity in these defense technol- identified by the Government Accountability Office ogies and created the commercially viable products (GAO), the Department of Energy’s Inspector Gener- available today. The DOE should conduct research al (DOE IG), and the House Science, Space, and Tech- to meet government objectives that the private nology Committee staff. Of the 44 small and medi- sector does not undertake. Further, policies should um-sized companies that received an ARPA-E award, be put in place that remove bureaucratic obstacles the GAO found that 18 had previously received pri- and invite the private sector, using private funds, to vate-sector investment for a similar technology. The access that research and commercialize it. GAO found that 12 of those 18 companies planned to use ARPA-E funding to either advance or accelerate already funded work.3

ADDITIONAL READING ȖȖ Nicolas D. Loris, “Department of Energy Budget Cuts: Time to End the Hidden Green Stimulus,” Heritage Foundation Backgrounder No. 2668, March 23, 2012. ȖȖ Matthew Stepp, Sean Pool, Jack Spencer, and Nicolas D. Loris, “Turning the Page: Reimagining the National Labs in the 21st Century Innovation Economy,” The Information Technology & Innovation Foundation, June 19, 2013. ȖȖ James Jay Carafano, Jack Spencer, Bridget Mudd, and Katie Tubb, “Science Policy: Priorities and Reforms for the 45th President,” Heritage Foundation Backgrounder No. 3128, June 13, 2016.

CALCULATIONS Savings are expressed as budget authority according to the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 61 62 Ȗ Ȗ Ȗ Ȗ Ȗ should the: Cuts made to be mission. Department’s Energy the with not align sector,private or duplicative do of other research, the to suited better ly, activities they are because Science, moved of Office the entire to eliminated or and should cutdrastically be BER programs Many environment.” the in nants nutrients contami such and as mation of materials transfor biological controlled and storage, carbon biofuels production, improvedfor sustainable plants conducted and of on microbes “redesign the For is beyond basicresearch. example, research inappropriately that move activities supports also BER the program Furthermore, warming. global on research mission including ofthe DOE, the conducted not does much support of research the However, endeavorssome valid. is of research the forresearch-and-development level, funding the biogeochemistry. At abasic ence, subsurface and biology,including sci climate radiochemistry, of energy-related subjects, for avariety research funds Science’s of Office The BERprogram RATIONALE 2018. FY in saves $592 million proposal This program. (BER) Research Environmental DOE the and Biological or cut eliminate Drastically RECOMMENDATION ofScience Remaining Programs toOffice and Environmental Research Program andShift Drastically CutorEliminate theDOEBiological Ȗ Ȗ Ȗ Ȗ Ȗ and Infrastructure. Facilities Environmental and Climate and program, Science Genomic The program, Centers Research Bioenergy The Infrastructure program, Facilities Systems and Biological The program, Science Environmental and Climate The 5 The Heritage Foundation | Foundation Heritage The - - - - vast majority of the average Americans’ exposure to to exposure of average the majority Americans’ vast levels the it not does and yet, adequately understand low-dose government regulating engagederal is in fed the because critical is Such research exposure. of low effects radiobiological the levels radiation of understand to created was which program, (LDRR) Low-Dose the Research is Radiation funding should that receive One BER program 100 2019. percent FY in 2018 FY and in 75 percent with funding beginning years, over two next the levels 2008 ofto funding program LDRR the should reconstitute Congress complete. from on low-dose far is radiation research ontee Science, Technology. Space, and by House the Commit obtained DOEto e-mails theory,” according No (LNT) Threshold Linear tive on conserva extremely the based are which limits, regulatory current their them overturn to cause would that information research additional require they do not that “EPA indicated the because has apparently were consideredactivities complete completed.” are “activities that only andstating budget request final its in no funds requesting ultimately program, foring LDRR the fund decreased gradually Administration Obama The knowledge of risks. more radiation accurate nuclear complex weapons improved could be with cleanupment of remaining the like responsibilities low, at is very radiation govern doses, and chronic heritage.org 6 LDRR program program LDRR increased 7 In fact, fact, In -

- - - - Energy and Water Development and Related Agencies

ADDITIONAL READING ȖȖ Nicolas D. Loris, “Department of Energy Budget Cuts: Time to End the Hidden Green Stimulus,” Heritage Foundation Backgrounder No. 2668, March 23, 2012. ȖȖ James Jay Carafano, Jack Spencer, Bridget Mudd, and Katie Tubb, “Science Policy: Priorities and Reforms for the 45th President,” Heritage Foundation Backgrounder No. 3128, June 13, 2016.

CALCULATIONS Savings are expressed as budget authority and were calculated by using the FY 2016 requested spending level of $609 million for BER as found in U.S. Department of Energy, “FY 2017 Congressional Budget Request: FY 2017 Statistical Table by Appropriation,” p. 7, https://energy.gov/sites/ prod/files/2016/02/f29/FY2017BudgetStatisticalTablebyAppropriation_0.pdf (accessed January 5, 2017). Heritage assumes that the FY 2016 level holds steady in FY 2017 and decreases at the same rate as discretionary spending (–0.32 percent) in FY 2018 according to the CBO’s most recent August 2016 baseline spending projections. This saves $607 million in FY 2018. Additional funding for the LDRR would add $15 million in FY 2018. The FY 2008 spending level was $17.6 million as reported in U.S. Department of Energy, FY 2009 Congressional Budget Request: Science, Vol. 4, February 2008, p. 201, https://energy.gov/sites/prod/files/FY09Volume4.pdf (accessed February 4, 2017). In inflation-adjusted dollars, this amounts to $20 million in FY 2018. Heritage proposes a 75 percent funding level in FY 2018. Combined, this proposal saves $592 million in FY 2018.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 63 64 spending. enacted 2016 FY on based billion level of $1.843 2018 FY projected the and billion, level of $1.498 2018 FY estimated an PCE, to billion)the according to inflation by level 2013 ($1.402 FY growing recommended the between difference the equal 2018 FY for million of $345 savings billion). estimated The (declining to slightly $1.843 projections spending baseline 2016 recent August to most CBO’s the according 2018 percent) (–0.32 growth FY in spending discretionary rate as same at the decreases and 2017 FY in steady level holds enacted 2016 FY the that 7. Table p. assumes by Statistical Appropriation,” 2017 Heritage FY Request: Budget Congressional 2017 of Energy, “FY Department U.S. in found is billion level of $1.849 enacted 2016 FY The billion. to alevel of $1.402 spending 2013 FY have would brought cuts These Foundation Heritage Stimulus,” Green Hidden to the End Time Cuts: Budget of Energy “Department D. Loris, Nicolas in found as Sciences Energy Basic for cuts spending 2013 $287.6 FY in million recommended the on based are Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING levels.2008 others close FY to return and some subprograms The wouldcuts eliminate proposed unaffordable. simply become has Government funding research. university or laboratories by funding own their roles,these whether through capable of fulfilling are companies private since programs, of these government suchThe aspects should eliminate commercialization. into research fundamental from stray of BES subprograms the many that is security.” national and environment, DOE the support energy, to mission in and ogies technol energy new for foundations the provide levels order in molecular atomic, to and electronic, at the energy control and matter ultimately and predict, understand, to research “fundamental investigates that program alegitimate BES is The RATIONALE 2018. FY in million saves $345 proposal This program. Sciences for (BES) DOE the Energy Basic Reduce funding RECOMMENDATION Energy SciencesProgram Reduce Funding fortheDOEBasic Ȗ Ȗ Foundation Foundation Heritage 45th the for President,” Reforms and Priorities Policy: Tubb, Katie “Science and Mudd, Spencer, Bridget Jack Jay Carafano, James 2012. 23, March Foundation Heritage Stimulus,” Green Hidden to the End Time Cuts: Budget of Energy “Department D. Loris, Nicolas Backgrounder No. 3128, June 13, 2016. 13, June 3128, No. The Heritage Foundation | Foundation Heritage The 8 The problem problem The - ly intended but demand meet were to acommercial computer Internet, the GPS—were chips, not initial successes— have becomeprojects that commercial budget government. federal R&D the in 2013, In DOE the fourth-largest the working. had not is sector where already private the basic research governmentmeet aspecific objective contributeto or either to spending federal in rein and cut waste to rationalized be must funding Federal scientificR&D research and commercialize and it. research that access to sector, private funds, the private using removeplace invite that and bureaucratic obstacles in put be should policies Further, undertake. not does meet government sector private the objectives that today.available DOE The to should conduct research products viable commercially the created and ogies defense these technol in opportunity saw an neurs Entrepre needs. developed for security national heritage.org

Backgrounder No. 2668, March 23, 2012. 2012. 23, March 2668, No. Backgrounder 9 Government Government No. 2668, 2668, No. - - - Energy and Water Development and Related Agencies

Eliminate DOE Energy Innovation Hubs RECOMMENDATION Eliminate funding for DOE Energy Innovation Hubs. This proposal saves $39 million in FY 2018.

RATIONALE The DOE has four Energy Innovation Hubs (mul- is not already working. In 2013, the DOE had the tidisciplinary teams) to overcome obstacles in fourth-largest R&D budget in the federal govern- energy technologies: (1) the Fuels from Sunlight ment.10 Government projects that have become Hub, (2) the Batteries and Energy Storage Hub, (3) commercial successes—the Internet, computer the Nuclear Energy Modeling and Simulation Hub, chips, GPS—were not initially intended to meet a and (4) the Critical Materials Institute. Regardless commercial demand but were developed for nation- of the merits of such endeavors, the problem with al security needs. Entrepreneurs saw an oppor- the Energy Innovation Hubs is that they focus on tunity in these defense technologies and created promoting specific energy sources and technology the commercially viable products available today. developments rather than basic research. The DOE should conduct research to meet government objectives that the private sector does not Federal scientific R&D funding must be rational- undertake. Further, policies should be put in place ized to cut waste and rein in federal spending to that remove bureaucratic obstacles and invite the either meet a specific government objective or con- private sector, using private funds, to access that tribute to basic research where the private sector research and commercialize it.

ADDITIONAL READING ȖȖ Nicolas D. Loris, “Department of Energy Budget Cuts: Time to End the Hidden Green Stimulus,” Heritage Foundation Backgrounder No. 2668, March 23, 2012. ȖȖ James Jay Carafano, Jack Spencer, Bridget Mudd, and Katie Tubb, “Science Policy: Priorities and Reforms for the 45th President,” Heritage Foundation Backgrounder No. 3128, June 13, 2016.

CALCULATIONS Savings are expressed as budget authority and were calculated by using the FY 2016 enacted spending levels of $24.3 million for energy information hubs batteries and storage and $15 million for the hubs’ fuels for sunlight as found in U.S. Department of Energy, FY 2017 Congressional Budget Request, Vol. 4, p. 53, https://energy.gov/sites/prod/files/2016/02/f29/FY2017BudgetVolume%204.pdf (accessed February 7, 2017). Heritage assumes that the FY 2016 enacted level holds steady in FY 2017 and decreases at the same rate as discretionary spending for 2018 (–0.32 percent), according to the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 65 66 projections. spending baseline 2016 recent August to most CBO’s according the authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING itmerit, should accomplished be at private, the nation’s the has grid upgrading electricity While development. and research cybersecurity and security, infrastructure tribes, for and states assistance and mission permitting R&D, trans technology grid on advanced focuses vehicles renewable electric and moting energy. OE went pro to much of funding the Administration, system.” flexible and electricity nation’s reliable, “ensure aresilient, to power grid the modernize to activities pursues Reliability gy and Ener Deliverability of Electricity Office The RATIONALE 2018. FY in million saves $214 Reliability proposal (OE).This and Energy Deliverability DOE the of Electricity Office Eliminate RECOMMENDATION Deliverability andEnergy Reliability ofElectricity Eliminate theDOEOffice Ȗ Ȗ Jonathan Lesser, “America’s Electricity Grid: Outdated or Underrated?” Heritage Foundation Foundation Heritage Underrated?” or Outdated Grid: “America’s Lesser, Electricity Jonathan 2012. 23, March Foundation Heritage Stimulus,” Green Hidden to the End Time Cuts: Budget of Energy “Department D. Loris, Nicolas 11 Under the Obama Obama Under the The Heritage Foundation | Foundation Heritage The - - - sary regulatory burden on grid siting and upgrades. upgrades. and siting burden on grid regulatory sary government’s role should reduce unneces to be technology, federal the or smart-grid resources gy ener renewable advanced subsidizing than Rather operatorssystem (ISOs), sector. private the and independent regional (NERC), Corporation ability Reli Electric sion American North the (FERC), Commis Regulatory Federal the Energy with dant levels. OE’s regional and state, role redun local, is Department of Homeland Security’s purview. of HomelandDepartment Security’s under the fall well could protection, very for grid or for acooperative public–private rolesecurity for concerns, cyber example in National security heritage.org Backgrounder No. 2959, October 29, 2014. 29, October 2959, No. Backgrounder No. 2668, 2668, No. ------Energy and Water Development and Related Agencies

Eliminate the DOE Office of Energy Efficiency and Renewable Energy

RECOMMENDATION Eliminate the DOE Office of Energy Efficiency and Renewable Energy (EERE). This proposal saves $2.149 billion in FY 2018.

RATIONALE EERE funds research and development “to create Federal scientific research and development fund- and sustain American leadership in the transition ing must be rationalized to cut waste and rein in to a global clean energy economy” as the govern- federal spending to either meet a specific government defines clean-energy technologies.12 Under the ment objective or contribute to basic research Obama Administration, funding went to projects where the private sector is not already working. In such as “drop-in” biofuels, improving engine efficien- 2013, the DOE had the fourth-largest R&D budget in cy, vehicle weight reduction, home energy efficiency, the federal government.13 Government projects that and renewables. Promoting these technologies is not have become commercial successes—the Internet, an investment in basic research, but outright com- computer chips, GPS—were not initially intended mercialization. Congress should eliminate EERE. to meet a commercial demand but were developed for national security needs. Entrepreneurs saw All of this spending is for activities that the private an opportunity in these defense technologies and sector should undertake if companies believe it created the commercially viable products available is in their economic interest to do so. The reality today. The DOE should conduct research to meet is that the market opportunity for clean-ener- government objectives that the private sector does gy investments already exists. Americans spent not undertake. Further, policies should be put in roughly $456 billion on gasoline in 2014. Both the place that remove bureaucratic obstacles and invite electricity and the transportation-fuels markets the private sector, using private funds, to access are multi-trillion-dollar markets. The global mar- that research and commercialize it. ket for energy totals $6 trillion. There is a robust, consistent, and growing demand for energy technology and services independent of any government efforts to subsidize it.

ADDITIONAL READING ȖȖ Nicolas D. Loris, “Department of Energy Budget Cuts: Time to End the Hidden Green Stimulus,” Heritage Foundation Backgrounder No. 2668, March 23, 2012. ȖȖ James Jay Carafano, Jack Spencer, Bridget Mudd, and Katie Tubb, “Science Policy: Priorities and Reforms for the 45th President,” Heritage Foundation Backgrounder No. 3128, June 13, 2016.

CALCULATIONS Savings are expressed as budget authority according to the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 67 68 Reserves. Petroleum Strategic and Reserves, Shale &Oil Petroleum Naval Development, and Research Energy Fossil on spending include Savings projections. spending baseline 2016 recent August to most CBO’s according the authority budget as expressed are Savings CALCULATIONS Ȗ ADDITIONAL READING event. inventories Over such an abundant in unload sector’s to private the ignores abilities and shocks, supply oil to responding more for than politics Petroleum (SPR). Reserve been used SPR The has ment-controlled Strategic of the oil, stockpile govern the gone managing has to funding Other trade. gas natural should all approval of Office the acts, Energy Fossil Untilkets. Congress mar energy restricts unnecessarily that function However, unnecessary outdatedgas. and an is this of natural exports and imports authorizes also FE sequestration. ture cap and of carbon scalability the increase and cost the down of DOE’s the bring to is plan Part strategic technologies. gas natural and sequestration, carbon turbines, advanced research, bined-cycle (IGCC) integrated-gasification-com plants, for existing powerreduce fossil emissions, plant innovations to power and systems fuels power initiative, coal out. spends FE money on aclean- should carry sector private the that activities are emissions and reduce CO2 ment will on that technologies focuses develop and research for fossil-energy funding most of the Under Administration, Obama the RATIONALE FY in 2018. million saves $898 proposal (FE).This DOE the of Office Energy Fossil Eliminate RECOMMENDATION ofFossilEliminate theDOEOffice Energy Ȗ March 23, 2012. 23, March Foundation Heritage Stimulus,” Green Hidden to the End Time Cuts: Budget of Energy “Department D. Loris, Nicolas The Heritage Foundation | Foundation Heritage The - - - - - tribute to basic research where the private sector sector where private the basicresearch to tribute either government meet aspecific objective conor to spending federal in rein and waste cut to ized rational be must funding Federal scientificR&D ofOffice Energy.Fossil need for the an eliminates resources stockpiled off governmentof selling reserves projects and gy for spending ener fossil for Eliminating SPR. the should used decommission or facilities storage sell revenue the use exclusively for deficitreduction. It SPR the and in oil the should all sell Congress time, without exception, it fails in some in way. exception,without it fails almost Thus, process. critical this it circumvents commercialization, technological drive to attempts government the op market-viable When products. only proven the is which devel way to marketplace, compete the to in opportunity the technologies gy ener denies losers and winners picking government of the practice investment. This out private-sector role the of entrepreneur, the diminishes crowds and government the market, the into oped technologies ment. budget govern R&D federal the in fourth-largest 2013, In DOE the the working. had notis already heritage.org 14 By attempting to force to government-devel attempting By Backgrounder No. 2668, 2668, No. ------Energy and Water Development and Related Agencies

Eliminate the DOE Office of Nuclear Energy and Shift Remaining Activities to Offices of Science and Civilian Radioactive Waste Management RECOMMENDATION Eliminate the DOE Office of Nuclear Energy and shift funding for some of its programs to the Office of Science and Civilian Radioactive Waste Material. This proposal saves $350 million in FY 2018.

RATIONALE The Office of Nuclear Energy aims to advance Fuel-cycle R&D should also be decreased by $103.8 nuclear power in the U.S. and address technical, million while reprogramming remaining spending cost, safety, security, and regulatory issues. Like to reconstitute the statutorily required Office of spending with conventional fuels and renewables, it Civilian Radioactive Waste Management (OCRWM) is not an appropriate function of the federal govern- and support the Nuclear Regulatory Commis- ment to spend taxes on nuclear projects that should sion’s license review of Yucca Mountain. Before be conducted by the private sector. For example, the the Obama Administration eliminated OCRWM, Office of Nuclear Energy includes tens of millions the office was responsible for overseeing the DOE’s of dollars for small modular reactor (SMR) licens- activities for storage of nuclear waste from commer- ing and support programs. While SMRs have great cial nuclear power plants. In particular, OCRWM potential, commercialization must be shouldered by managed the permit application for a deep geologic the private sector. Government funding should be repository at Yucca Mountain. Despite the Obama redirected to the Nuclear Regulatory Commission Administration’s refusal to support the program, for SMR-licensing preparation. the 1982 Nuclear Waste Policy Act, as amended, legally mandates that the DOE carry out a licens- Work that clearly falls under basic R&D should be ing process for a repository at Yucca Mountain in moved to the Office of Science. For example, the Nevada. Regardless of the ultimate fate of Yucca President’s Nuclear Energy Enabling Technologies Mountain, completing the review makes all of the (NEET) program is charged with investigating the information available for Congress, the President, crosscutting of technologies. Cuts to the NEET the state of Nevada, industry, and others to make budget should include eliminating the unnecessary wise decisions about what to do next. modeling and simulation hub, and tens of millions from the National Scientific User Facility, which Congress should provide $50 million each to the supports work that should be funded by the Science DOE and the Nuclear Regulatory Commission budget, if at all. That still leaves approximately $19 (NRC) for FY 2017 to start up the program, and million for NEET projects. re-evaluate concrete funding needs in FY 2018. No funds should be used for the DOE’s consent-based siting initiative established under the Obama Administration without direction from Congress.

ADDITIONAL READING ȖȖ Nicolas D. Loris, “Department of Energy Budget Cuts: Time to End the Hidden Green Stimulus,” Heritage Foundation Backgrounder No. 2668, March 23, 2012. ȖȖ Katie Tubb and Jack Spencer, “Real Consent for Nuclear Waste Management Starts with a Free Market,” Heritage Foundation Backgrounder No.3107, March 22, 2016.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 69 70 1. Table p. by Statistical Appropriation,” 2017 FY Request: Budget Congressional 2017 of Energy, “FY Department U.S. in found is million level of $986.2 enacted 2016 FY The projections. spending baseline 2016 recent August to most CBO’s according the spending, percent) (–0.32 discretionary in decline projected by the 2018 FY in slightly it decreasing and 2017 FY in million level of $986.2 enacted 2016 FY the steady (amillion), holding million by $350 calculated of of $983 difference appropriation 2018 FY projected the million) and $633 level of 2018 FY estimated PCE the accordinglevel to (an 2013 FY inflation by million $592 growing recommended the between difference the equal 2018 FY for savings estimated The million. $770 actual of the instead to alevel of $592 million, spending 2013 FY havewould brought Foundation Heritage Stimulus,” Green Hidden to the End Time Cuts: Budget of Energy “Department D. Loris, Nicolas in found as energy nuclear for cuts spending 2013 FY in million $178 recommended the on based are Savings CALCULATIONS The Heritage Foundation | Foundation Heritage The heritage.org Backgrounder No. 2668, March 23, 2012. These cuts cuts These 2012. 23, March 2668, No. Energy and Water Development and Related Agencies

Eliminate DOE Funding for Small Business Innovation Research and Small Business Technology Transfer Programs RECOMMENDATION Eliminate Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. This proposal saves $197 million in FY 2018.

RATIONALE The DOE Office of Science includes SBIR and STTR Federal scientific R&D funding must be rational- programs with the original intent to “increase ized to cut waste and rein in federal spending to private sector commercialization of innovations either meet a specific government objective or con- derived from Federal R&D, thereby increasing com- tribute to basic research where the private sector petition, productivity, and economic growth.”15 is not already working. In 2013, the DOE had the fourth-largest R&D budget in the federal govern- The SBIR and STTR programs stress that the goal ment.16 Government projects that have become of the programs today is to place more emphasis commercial successes—the Internet, computer on commercialization, “[a]ccepting greater risk in chips, GPS—were not initially intended to meet a support of agency missions.” Using taxpayer dollars commercial demand but were developed for nation- to offset higher risk is no way to promote economic al security needs. Entrepreneurs saw an opportu- development. It ensures that the public pays for the nity in these defense technologies and created the failures, as they have with failed government energy commercially viable products available today. The investments, while the private sector reaps the ben- Department of Energy should conduct research to efits of any successes. Congress should eliminate all meet government objectives that the private sector SBIR and STTR funding in the DOE budget. does not undertake. Further, policies should be put in place that remove bureaucratic obstacles and invite the private sector, using private funds, to access that research and commercialize it.

ADDITIONAL READING ȖȖ Nicolas D. Loris, “Department of Energy Budget Cuts: Time to End the Hidden Green Stimulus,” Heritage Foundation Backgrounder No. 2668, March 23, 2012. ȖȖ James Jay Carafano, Jack Spencer, Bridget Mudd, and Katie Tubb, “Science Policy: Priorities and Reforms for the 45th President,” Heritage Foundation Backgrounder No. 3128, June 13, 2016.

CALCULATIONS The Department of Energy received $174 million in SBIR awards and $24 million in STTR awards in 2015. SBIR and STTR award information is found in U.S. Department of Energy, FY 2017 Congressional Budget Request, Vol. 4, p. 369, https://energy.gov/sites/prod/files/2016/02/f29/ FY2017BudgetVolume%204.pdf (accessed February 7, 2017). The budget request does not provide enacted levels for FY 2016, so Heritage assumes that the FY 2015 spending level remains unchanged through FY 2017 and then decreases at the same rate as discretionary spending (–0.32 percent) according to the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 71 72 savings. discretionary in million $228 and savings time one- $27.561in billion including 2018, FY $27.789 saves in billion Reserves Northeast and SPR the off selling Combined, savings. discretionary in gov/petroleum/gasdiesel/ 2017, 30, Update,” Fuel January Diesel and Gasoline Liquids: &Other “Petroleum Administration, Information Energy (U.S. $2.32 is 2017, (October–March),” 2, Prices January Propane and Oil Weekly Heating Liquids: &Other “Petroleum Administration, Information Energy (U.S. $2.63 is oil heating home for gallon per price current the and barrels 1million hold reserves Both million. $208 equal Reserves Northeast the selling from 2018 FY in savings One-time savings. spending discretionary in million $220 prices) well oil as 2017 as with January billion $10.8 to about equal amount 2018—an of FY end the at remaining MMB 196 have would about SPR (the 2018 $27.353 FY in billion equal savings one-time the Thus, 2018. FY in of oil worth million $200 off will sell SPR the projects CBO the as amount this from million $200 subtracts of $27.553 Heritage billion. total in sales results This throughout. constant hold prices selling recent most the that assumes Heritage so unknown, is changes of those direction the fluctuate, will certainly prices Although 2018. sour) FY in 308 and sweet (191 MMB of 499 asale in resulting month, each sold month’s is inventory previous of the percent 10 that and 2018 of FY beginning the through constant remain prices and inventory that assumes sour. for Heritage $56.16 and sweet for $53.76 was oil for price market the 26, of January As atotal for MMB. of 695.1 oil, crude sour of Brent MMB 429 and oil crude sweet TexasWest Intermediary of (MMB) barrels of million 266.1 inventory, SPR’s on the including data recently available most on the based are SPR the off selling from Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING would save $27.573 2018. FY in billion This spacestorage or companies. it private sell to the decommission then should DOE The depleted. completely is reserve the production crude until 10 month’s percent previous of country’s the total not amount exceeding an auctioning periodically DOE the should SPR the markets, sell oil by oil not disrupt to as So infrastructure. supporting the or sell decommission and reserves these liquidate should DOE the completely authorize to Congress controlled can. governmentfederally stockpiles respond more efficiently than to supply shocks will open and markets abundant, are reserves inventories event. and Private such an in tories inven abundant sector’s unload to private abilities the ignores supply oil to and responding shocks, more been used for SPRThe than politics has RATIONALE revenues the using solelyReserves, saves for $27.789 deficitproposal This reduction. 2018.FY in billion Home Supply Gasoline Petroleum (SPR) Heating Northeastern and Strategic the the Reserve Liquidate and RECOMMENDATION Supply Reserves the Northeastern Home Heating andGasoline Liquidate theStrategic Petroleum Reserve and Ȗ Ȗ August 20, 2015. 20, August Foundation Heritage Reserve,” Petroleum Strategic the on Plug the Pull Should Congress “Why D. Loris, Nicolas 2012. 23, March Foundation Heritage Stimulus,” Green Hidden to the End Time Cuts: Budget of Energy “Department D. Loris, Nicolas ONE-TIME ). Heritage assumes that these prices hold constant until the reserves are sold. This proposal also includes $228 million million $228 includes also proposal This sold. are reserves the until constant hold prices these that assumes ). Heritage https://www.eia.gov/dnav/pet/pet_pri_wfr_a_EPD2F_prs_dpgal_w.htm The Heritage Foundation | Foundation Heritage The - homes and businesses in the northeast heated by northeast the homes in businesses and supply for disruptions against protect to gasoline of refined gallons 1million of diesel and gallons 1million held They contain are by DOE. the and Act Conservation Policy and by Energy the lished oline Supply were These Reserves. reserves estab Gas the Home and Reserve Northeast Heating Oil the or liquidate DOE privatize The should also stockpiles. This saves $216 million in FY 2018. FY savesin $216 million This stockpiles. much more efficientlygovernment-controlledthan them up inventories unloading byos and building scenari market respond and prices to companies at President’s the used be to Private oil, discretion. heritage.org Backgrounder ), while the price for gasoline gasoline for price the ), while Backgrounder http://www.eia. No. 3046, 3046, No. No. 2668, 2668, No. - - - ONE-TIME MANDATORY Energy and Water Development and Related Agencies

Auction Off the Tennessee Valley Authority RECOMMENDATION Auction off all Tennessee Valley Authority (TVA) assets. This proposal saves $30.032 billion in FY 2018.

RATIONALE The TVA’s original purpose of providing naviga- electricity rates, and growing liabilities for all U.S. tion infrastructure, flood control, power genera- taxpayers. Americans serviced by the TVA pay tion, reforestation, and economic development in some of the highest electricity prices in the region. a region encompassing nine states, especially in Despite three major debt-reduction efforts in recent Tennessee, Alabama, Mississippi, and Kentucky, history, the TVA has still not reduced its taxpay- has long been accomplished. Its continuance as a er-backed and ratepayer-backed debt. government corporation is an outmoded means of providing rural areas with electricity that enables The most effective way to restore efficiency to the tremendous special privileges that interfere with TVA is to sell its assets via a competitive auction market competition. The TVA has had no effective that honors existing contracts and continues ser- oversight from either the government or the pri- vice for existing customers. Any proceeds should be vate sector, which has resulted in costly decisions, used solely to pay down the national debt. environmental damage, excessive expenses, high

ADDITIONAL READING ȖȖ Ken G. Glozer, “Time for the Sun to Set on the Tennessee Valley Authority,” Heritage Foundation Backgrounder No. 2904, May 6, 2014.

CALCULATIONS It is hard to know the TVA’s market value, but comparable assets in the Southeast suggest that the TVA’s value is between $30 billion and $40 billion. For an assessment of the TVA’s value, see Ken G. Glozer, “Time for the Sun to Set on the Tennessee Valley Authority,” Heritage Foundation Backgrounder No. 2904, May 6, 2014, http://www.heritage.org/research/reports/2014/05/time-for-the-sun-to-set-on-the-tennessee-valley- authority. Heritage uses the lower end of this estimate, with a one-time savings of $30 billion in FY 2018. Auctioning off the TVA would also generate $32 million in mandatory savings in FY 2018 from contributions to the TVA fund, as estimated by the CBO in its most recent August 2016 baseline spending projections. Thus, total FY 2018 savings from auctioning the TVA equal $30.032 billion.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 73 74 savings. mandatory in million $221 and savings, discretionary in million $487 savings, one-time in billion $33.323 including 2018, FY in billion $34.031 equal savings total Thus, projections. spending baseline 2016 recent August most its in CBO by the estimated as PMAs, to these contributed funds the from savings mandatory in million $221 well as as 2018, FY in million to total $487 projected are which costs maintenance and operation annual the from savings generate would PMAs these off auctioning addition, In savings. aone-time represents billion $33.323 This 2018. FY in billion $33.323 at estimate of this low-end the assumes Heritage dollars. 2018 FY estimated in billion to $44.9 billion of $33.3 into arange translate estimates 1997 FY CBO’s the terms, inflation-adjusted In 2017). 7, February (accessed sites/default/files/105th-congress-1997-1998/reports/electric.pdf 1997, https://www.cbo.gov/November 15, p. Electricity?” Sell Government Federal the Should Office,CBOStudy: “A Budget Congressional See 1997. FY in billion $31 and billion $23 between them valued CBO the but administrations, these of marketvalue the estimate to difficult is It CALCULATIONS Ȗ Ȗ ADDITIONAL READING as now supply such PMAs areas the communities, power poor to provide subsidized to and struction con anddam intendedirrigation pay to off federal Originally by taxpayers. subsidized loans terest enjoy and They doprices. not pay low-in taxes West and South the in at subsidized electricity sell PMAs The locks. and generation, reservoirs, dams, power maintain to of New the Deal part 1930s as the in power. were organized selling and PMAs The ment should of business managing not the in be govern federal The function. local and a private primarily is production distribution and Electricity RATIONALE 2018. FY saves $34.031 in proposal billion (4) and This Power Southwestern the Administration, Administration. (3) (2) Power PowerPower Western Southeastern the the Administration, Administration, Area (PMAs): (1) Bonneville the Administrations PowerMarketing the remaining of four assets all Auction off RECOMMENDATION Marketing Administrations Auction Offthe Four Remaining Power Ȗ Ȗ Ken G. Glozer, “Time for the Sun to Set on the Tennessee Valley Authority,” Heritage Foundation Foundation Valley Authority,” Heritage Tennessee the to on Sun Set the for Glozer,Ken G. “Time 2012. 23, March Foundation Heritage Stimulus,” Green Hidden to the End Time Cuts: Budget of Energy “Department D. Loris, Nicolas ONE-TIME MANDATORY The Heritage Foundation | Foundation Heritage The - - - Both the Reagan and Clinton Administrations Administrations Clinton and Reagan the Both of of aselect group Americans. bills ity electric the forced subsidize be to should taxpayers neither activity; government-managed centralized, should not a electricity be commercial distributing Vegas. Las Generating and Vail, and Angeles, Los sold under competitive bidding. competitive under sold be should similarly PMAs tomers. remaining The soldcus to off its successfully was Administration Power Alaska The PMAs. the proposed privatizing heritage.org Backgrounder No. 2904. May 6, 2014. May 6, 2904. No. Backgrounder No. 2668, 2668, No. - - Energy and Water Development and Related Agencies

ENDNOTES 1. Totals may not add due to rounding. 2. U.S. Department of Energy, FY 2017 Budget Justification, Vol. 4, February 2016, p. 239, http://energy.gov/cfo/downloads/fy-2017-budget- justification (accessed December 1, 2016). 3. Government Accountability Office, “Department of Energy: Advanced Research Projects Agency–Energy Could Benefit from Information on Applicants’ Prior Funding,” January 2012, http://www.gao.gov/assets/590/587667.pdf (accessed October 9, 2015), and U.S. Department of Energy, Office of Inspector General, Office of Audits and Inspections, “The Advanced Research Projects Agency–Energy,” Audit Report, August 2011, http://science.house.gov/sites/republicans.science.house.gov/files/documents/hearings/2011%2008%20DOE%20IG%20 ARPA-E%20Audit.pdf (accessed October 9, 2015). 4. James Jay Carafano, Jack Spencer, Bridget Mudd, and Katie Tubb, “Science Policy: Priorities and Reforms for the 45th President,” Heritage Foundation Backgrounder No. 3128, June 13, 2016. 5. U.S. Department of Energy, FY 2017 Congressional Budget Request: Science, February 2016, p. 111, http://energy.gov/cfo/downloads/fy-2017-budget-justification (accessed December 1, 2016). 6. U.S. Department of Energy, FY 2017 Congressional Budget Request, Vol. 4, p. 122. 7. Committee on Science, Space, and Technology, “U.S. Department of Energy Misconduct Related to the Low Dose Radiation Research Program,” Majority Staff Report, December 20, 2016, pp. 7 and 13, https://science.house.gov/majority-staff-report-department-energy- misconduct (accessed February 4, 2017). 8. Office of Science, “Basic Energy Sciences (BES),” U.S. Department of Energy, http://science.energy.gov/bes/ (accessed December 1, 2016). 9. Carafano, Spencer, Mudd, and Tubb, “Science Policy: Priorities and Reforms for the 45th President.” 10. Carafano, Spencer, Mudd, and Tubb, “Science Policy: Priorities and Reforms for the 45th President.” 11. Office of Electricity Delivery and Energy Reliability, “Mission,” http://energy.gov/oe/mission (accessed December 1, 2016). 12. Office of Energy Efficiency and Renewable Energy, “About the Office of Energy Efficiency and Renewable Energy,” .(http://energy.gov/eere/about-office-energy-efficiency-and-renewable-energy (accessed December 1, 2016 13. Carafano, Spencer, Mudd, and Tubb, “Science Policy: Priorities and Reforms for the 45th President.” 14. Carafano, Spencer, Mudd, and Tubb, “Science Policy: Priorities and Reforms for the 45th President.” 15. U.S. Department of Energy, “Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR),” http://science.energy.gov/sbir/about/ (accessed October 9, 2015). 16. Carafano, Spencer, Mudd, and Tubb, “Science Policy: Priorities and Reforms for the 45th President.”

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 75

Financial Services and General Government 78 2013. FY in million $887 totaled DLP the for authority budget example, For disasters. declared of number the on based significantly vary amounts spending as higher, significantly be could savings Actual projections. spending baseline 2016 recent August to most CBO’s according the 2018 FY for authority budget as expressed are Savings CALCULATIONS Ȗ ADDITIONAL READING disasters. losses from natural to exposure reducepreviously their to steps took of whether beneficiaries the regardless awarded are loans Currently, disaster SBA catastrophes. ral for natu insurance purchasing from businesses and individuals by discouraging hazard” a “moral relief offeredthe by creates disaster DLP federal property.destroyed, Unfortunately, generous the replacing and damaged, renters repairing and in nonprofitbusinesses, homeowners, organizations, assist to loans direct offertaxpayer-funded loans disaster SBA disasters, declared federally After RATIONALE 2018. FY in $198 million (SBA’s) Administration’s saves Business (DLP). proposal Small This the Program Eliminate Loans Disaster RECOMMENDATION Disaster LoansProgram Eliminate theSmallBusinessAdministration’s Ȗ Business and Entrepreneurship, U.S. Senate, March 14, 2013. 14, March Senate, U.S. Entrepreneurship, and Business Small on beforeCommittee the testimony Effectiveness,” and Review of 2013: of Impact Act Reform Disaster “Business Muhlhausen, David B. The Heritage Foundation | Foundation Heritage The - ed in a high-risk area. In many cases, the loans fail fail loans the cases, many In area. ahigh-risk in ed locat still are location. applicants Thus, same exact the in rebuild to required are zone, flood applicants amajor in located atown from of moving instead locations. disaster-prone For in rebuild example, forced to are borrowers that requirement is of this consequence before unintended disaster, the the as condition same the to property their return cants intended help to are appli loans disaster SBA While to offer a long-term solution. long-term a offer to heritage.org - - Financial Services and General Government

Reform the Securities and Exchange Commission RECOMMENDATION Freeze the Securities and Exchange Commission (SEC) budget in real, inflation-adjusted terms. This proposal saves at least $26 million in FY 2018.

RATIONALE The mission of the SEC is to protect investors; method of estimating savings across proposals. (See maintain fair, orderly, and efficient markets; and calculations section below.) facilitate capital formation. These are important goals. However, over the past 10 years, the SEC’s There is no reason to believe that the previous budget has increased by 92 percent—almost two flood of resources has improved the SEC’s perfor- times faster than government as a whole, and more mance or effectiveness. In fact, the SEC has become than four times as fast as inflation. In FY 2016, the sclerotic and moribund. It has too many layers of SEC received $1.605 billion, an 8.9 percent increase middle management, too many offices, and too over the FY 2015 spending level of $1.479 billion. many layers of review. It needs to be reformed and The SEC budget should be frozen at its real, FY 2015 streamlined. It needs to focus on its core enforce- level (an amount equal to $1.574 billion in 2018 dol- ment mission of preventing fraud and ensuring lars). This would likely generate significantly more compliance with disclosure laws. What it does not than the reported $26 million in FY 2018 savings, need is more taxpayer money. but Heritage maintains a consistently conservative

ADDITIONAL READING ȖȖ David Burton, “Lack of Resources Is Not the Reason for SEC Tardiness,” The Daily Signal, December 10, 2013.

CALCULATIONS Savings are expressed as budget authority. Estimated appropriations for FY 2018 are based on the FY 2016 authorized level of $1.605 billion found in the Consolidated Appropriations Act, 2016, Public Law 114–113, p. 220. Heritage assumes that the FY 2016 level holds constant in FY 2017 based on the continuing resolution passed by Congress in December 2016, and then decreases by 0.32 percent for FY 2018 in accordance with CBO’s projection for overall discretionary spending in FY 2018 as reported in the CBO’s most recent August 2016 baseline spending projections. This projected level of spending is compared to the FY 2015 enacted level, increased by inflation to FY 2018 dollars. This results in very small savings. However, if the SEC budget continues to rise at the rate it has in recent years, savings would be many times the level estimated here.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 79 80 projections. spending baseline 2016 recent August to most CBO’s according the 2018 FY for authority budget as expressed are Savings CALCULATIONS (1) CDFI the four Program, programs: ly through primari institutions these supports fund The communities. underserved to services financial various and tal, capi credit, to provide firms of financial private improve to ability is the objectiveed of fund the Thestat institutions. other financial and private DevelopmentCDFIs, Community Entities (CDEs), to it provides grants and ment of Treasury, the Depart by U.S. the CDFI administered The is Fund RATIONALE 2018. FY in million $243 saves proposal (CDFI) This Development Institutions Fund. Community the Financial Eliminate RECOMMENDATION Institutions Fund Eliminate theCommunityDevelopment Financial 1 The Heritage Foundation | Foundation Heritage The - - - - private markets, ultimately leading to higher con higher to leading ultimately markets, private hinder competition distort and more, grants the Further welfare. corporate to it amounts because (combined). CDFI The should shut Fund be down programs these through been disbursed has dollars 2010 $15 taxpayer 2015, in to billion more than (4) Program. Credit Tax New the Markets and Program, CDFI Assistance Native American (3) the Program, Award (2) Enterprise Bank the federal spending. federal forincreased justification further and sumer prices heritage.org 2 From From - - Financial Services and General Government

Eliminate the Export–Import Bank RECOMMENDATION Revoke the charter of the Export–Import Bank (Ex–Im) and eliminate bank authorizations. This proposal saves about $160 million in FY 2018.

RATIONALE Ex–Im provides subsidized financing to foreign With few exceptions, all financing that exceeds $10 firms and foreign governments for the purchase of million must be approved by the bank’s board of American exports. The program primarily bene- directors. Under the bylaws, board action requires fits very large corporations, and puts unsubsidized at least three directors. Currently, there are three American firms at a competitive disadvantage and vacancies on the five-member board, which means taxpayers at risk. that the industrial titans that ordinarily benefit- ed most from Ex–Im subsidies have been shut out, Those risks are ignored in reported budget fig- including the likes of Boeing, Caterpillar, General ures, which assume that incoming fee collections Electric, and John Deere. But Ex–Im does not need will fully offset Ex–Im costs. This assumption fails a quorum to assist the smaller exporters, who—as to account for default risks. A better, fair-value the U.S. Chamber of Commerce and the Nation- accounting method that prevails in the private sec- al Association of Manufacturers have long main- tor reveals an estimated 10-year cost of $1.6 billion tained—are their primary concern. for Ex–Im, according to the Congressional Budget Office. In the CBO’s analysis of the Ex–Im program, Ex–Im was capitalized with $1 billion in taxpayer then–CBO Director Douglas Elmendorf stated that dollars, and its financing is backed by the full faith “fair-value estimates provide a more comprehensive and credit of the United States—which means that measure of the costs of federal credit programs, and taxpayers are on the hook for any losses that the CBO has provided fair-value estimates for many bank fails to cover with reserves. programs to help lawmakers more fully understand the trade-offs between certain policies.”3 Ex–Im’s direct costs do not reflect the detrimental impact on American firms of subsidizing overseas The bank’s charter was reauthorized through 2019 competitors. The subsidies also distort the alloca- as a rider to a bloated multibillion dollar transpor- tion of credit and labor. For example, job losses to tation measure passed by the House and Senate on domestic companies have been caused by export December 4, 2015. However, the reauthorization did financing of coal mining in Colombia, copper exca- not return the bank back to business as usual—that vation in Mexico, and airplanes for India. is, financing foreign deals for some of America’s most successful conglomerates—because of vacan- There is no shortage of private financing, and Ex– cies on the board of directors. Im subsidies are not needed to maintain strong levels of exports.

ADDITIONAL READING ȖȖ Diane Katz, “Export–Import Bank: Cronyism Threatens American Jobs,” Heritage Foundation Issue Brief No. 4231, June 2, 2014. ȖȖ Diane Katz, “The Export–Import Bank: A Government Outfit Mired in Mismanagement,” Heritage FoundationIssue Brief No. 4208, April 29, 2014.

CALCULATIONS The CBO estimates that, under fair-value accounting, eliminating the Export–Import Bank would have resulted in savings of $1.6 billion over the 2015–2024 period ($160 million per year) as shown in Congressional Budget Office, “Testimony on Estimates of the Cost of the Credit Programs of the Export–Import Bank,” June 25, 2014, p. 6.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 81 82 9, 2017). February (accessed February 2016, pp. 113 and 114, https://www.opm.gov/about-us/budget-performance/budgets/congressional-budget-justification-fy2017.pdf Fiscal 2017,”Year Justification Budget “Congressional Management, Personnel of Office in provided as Multi-State the for Plan annually million $1.1 of expenses administrative estimated Management’s and Personnel of Office the on based authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING limit to designed standards sets program the fact, competition. market In not is MSP The expanding enrollment. exchange persons, or about 4percent of only 440,000 total is enrollment MSP The of Columbia. District the as well as only 32 states, in plans but there are today states, 50 all 2017,By in available be to are plans the have collapsed. since about half and unstable cially were finan plans even these ofroster though plans, its to plans co-op 2015, OPM added so-called the er, Blue the Blue In and Cross Shield Association. 2014,In insur only one OPM large with contracted state. every in exchanges ance insur health the in plans other health private all to, eventually, companies compete with insurance ment (OPM). two at least with OPM contract to was of by Office Manage the Personnel administered be to (ACA), program, MSP the created Congress Act UnderCare of Affordable the 1334 Section RATIONALE 2018. FY in saves $1.1 million proposal This for program. (MSP) Multi-State the Plan funding Eliminate RECOMMENDATION Eliminate Funding PlanProgram fortheMulti-State Ȗ Ȗ Foundation Foundation Heritage Markets?” Insurance Health America’s A PlayerPower in Management: Personnel of Office “The et al. Springer Linda Honorable The January 2015. Center Mercatus Consolidation?” or Competition for Agents Plans: Health “Multistate Meredith, R. Neil and Moffit E. Robert Lecture No. 1145, February 19, 2010. 19, February 1145, No. 5 4 The Heritage Foundation | Foundation Heritage The - - - - ture of the original version reform legisla of health of original the ture akey fea insurance, private compete to with plan public option,for agovernment “robust” the health asubstitute was MSP,The program, co-op the like payer money should not pay for abortions. elective tax that policy long-standing widely and accepted thefrom departure asignificant is subsidies. This eligible for government remaining while ACA, provide coverageto under of abortion the elective market. ance insur consolidation health the in increase further competition entry, may decrease plan and and further accelerate that consolidation. that accelerate further law, government-sponsored to and threaten plans they were before enactmentcompetitive than of the less already are markets the plans; health private compete to against plans health sponsor special noThere is need for government federal the to tion Administration. championed by Obama the heritage.org 6 Moreover, allowed some MSPs are Working Paper , -

- - 7 -

Financial Services and General Government

Protect Freedom of Conscience in the District of Columbia

RECOMMENDATION Protect freedom of conscience in the District of Columbia. This proposal has no budgetary impact in FY 2018.

RATIONALE Exercising authority Congress delegated by law to lifestyle, orientation, or belief” if it violates their the District of Columbia government, in 2015 the beliefs about human sexuality. DC Council passed two acts that could potential- ly interfere with religious liberty and exercise of Congress should ensure that the repeal of the Arm- conscience in the District. The Reproductive Health strong Amendment does not have the effect of pro- Non-Discrimination Act (RHNDA) specifically prohibiting religiously affiliated private schools from hibits employers from discriminating in “compen- acting in accordance with the tenets of their faith sation, terms, conditions or privileges of employ- regarding beliefs about human sexuality when per- ment” on the basis of an individual’s “reproductive forming their religious educational mission. health decision making,” including the “termina- tion of a pregnancy.” RHNDA could force pro-life Congress has a special responsibility to protect the organizations to violate their organizational mis- freedom of the people of the District of Columbia sion and hire individuals who advocate for abortion. because of the power delegated to Congress by the U.S. Constitution (Article 1, Section 8) to “exercise Likewise, the Human Rights Amendment Act exclusive Legislation in all Cases whatsoever over (HRAA) repealed the Nation’s Capital Religious such District.” Liberty and Academic Freedom Act, popular- ly known as the Armstrong Amendment. Passed Congress should, therefore, displace the effects of by Congress in 1989, the Armstrong Amendment RHNDA and HRAA by appropriate provisions in has protected religious schools in DC from being the federal DC Appropriations Act to the extent coerced by the government into “promoting, necessary to protect religious liberty and the exer- encouraging, or condoning any homosexual act, cise of conscience.

ADDITIONAL READING ȖȖ Ryan T. Anderson and Sarah Torre, “Congress Should Protect Religious Freedom in the District of Columbia,” Heritage Foundation Issue Brief No. 4364, March 9, 2015.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 83 84 recommendation. abudget-neutral it making budget, of Columbia’s education District the within funding shifts proposal The CALCULATIONS Ȗ Ȗ Ȗ ADDITIONAL READING public schools traditional to provided funding al feder of additional aportion the ers should shift public DC Federalthe school system. policymak an schools, and charter for supplemental DC’s in public funding million for OSP, the funding in approach: $20 $20 million “three-sector” the as known is what through new the school choice funded optionCongress Members 2003, of in created was OSP the When choice. schoolprivate of parents’ the attend to a DC, Washington, in low-income families OSP, from children to provides scholarships which continued Act).(SOAR) and the created bills These Results and Students the for as Opportunity rized School Choice Incentive (most Act recently reautho by DC the authorized funding existing through OSP the to access schooling choice by expanding of increas goal the advance can Policymakers RATIONALE for 2018. FY (OSP). no savings has proposal Program This Scholarship Opportunity DC the expand abudget-neutral in manner. funds Specifically, school choice nation’s shifting the in Expand through capital RECOMMENDATION Expand theDCOpportunityScholarshipProgram Ȗ Ȗ Ȗ June 2010. June 2010-4018, NCEE of Education, Department U.S. Report,” Final Program: Scholarship Opportunity DC of the Wolf “Evaluation et al., Patrick 2014. 18, March Foundation Heritage Research,” at the ALook Education: in Choice of Value Parental “The Burke, M. Lindsey Choice,” Step School in Next “The Burke, M. Lindsey and Bedrick Jason additional additional $20 million for $20 million The Heritage Foundation | Foundation Heritage The - - - - National Affairs National rate 21 percentage points higher than acontrol than percentage 21 rate higher points of Education—a Department by U.S. the astudy to school, according school of high choice graduated of avoucher students who used attend to aprivate OSP. the government fund to Moreover, 91 percent it appropriate is of fordiction Congress, federal the under juris the of Columbia falls District the Since choice. of for students school attendscholarships to aprivate additional approach fund to three-sector the in and providers. and multipleto education-related products, services, funds their direct to count model, parents enabling avoucherfrom education-savings-ac model an to OSP the position aunique transition to in ers are scholarship. but not of did a whogroup were peers use, awarded, heritage.org ,

No. 22 (Winter 2015). (Winter 22 No. 8 At the same time, federal policymak federal time, same At the Issue Brief Issue No. 4173, 4173, No. - - - Financial Services and General Government

ENDNOTES 1. Community Development Financial Institutions Fund, “New Markets Tax Credit CDE Certification Application,” May 2009, https://www.novoco.com/sites/default/files/atoms/files/cde_certification_application_0509.pdf (accessed December 21, 2016). 2. In 2008, the Housing and Economic Recovery Act (HERA) created a new CDFI program called the Capital Magnet Fund (CMF). As of this writing, only $80 million (in 2010) has been disbursed from the CMF. See Norbert J. Michel and John L. Ligon, “GSE Reform: Trust Funds or Slush Funds?” Heritage Foundation Issue Brief No. 4080, November 7, 2013, http://www.heritage.org/research/reports/2013/11/gse-reform- affordable-housing-trust-funds-or-slush-funds; Norbert J. Michel and John L. Ligon, “Fannie and Freddie Will Finance a New Source for Affordable Housing Funds,” The Daily Signal, March 3, 2015, http://dailysignal.com/2015/03/03/fannie-freddie-will-finance-new-source- affordable-housing-funds/; and U.S. Department of Treasury, “Capital Magnet Fund: Interim Impact Assessment,” March 2014, https://www.cdfifund.gov/Documents/CMF_Impact_Assessment.pdf (accessed December 21, 2016). 3. Congressional Budget Office, “Testimony on Estimates of the Cost of the Credit Programs of the Export–Import Bank,” June 25, 2014, http://www.cbo.gov/publication/45468 (accessed January 11, 2016). 4. The Honorable Linda Springer et al., “The Office of Personnel Management: A Power Player in America’s Health Insurance Markets?” Heritage Foundation Lecture No. 1145, February 19, 2010, http://www.heritage.org/research/lecture/the-office-of-personnel-management-a-power-player-in-americas-health-insurance-markets. 5. Rachana Pradhan and Paul Demko, “Another Piece of Obamacare Falls Short,” Politico, September 7, 2016, http://www.politico.com/story/2016/09/obamacare-falls-short-227854 (accessed February 9, 2017). 6. Robert E. Moffit and Neil R. Meredith, “Multistate Health Plans: Agents for Competition or Consolidation?” Mercatus Center Working Paper, January 13, 2015, http://mercatus.org/publication/health-insurance-multi-state-plan-program-competition (accessed November 17, 2015). 7. Sarah Torre, “Obamacare’s Many Loopholes: Forcing Individuals and Taxpayers to Fund Elective Abortion Coverage,” Heritage Foundation Backgrounder No. 2872, January 13, 2014, http://www.heritage.org/research/reports/2014/01/obamacares-many-loopholes- forcingindividuals-and-taxpayers-to-fund-elective-abortion-coverage. ,Patrick Wolf et al., “Evaluation of the DC Opportunity Scholarship Program: Final Report,” U.S. Department of Education, NCEE 2010-4018 .8 June 2010, https://ies.ed.gov/ncee/pubs/20104018/pdf/20104018.pdf (accessed February 9, 2017).

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 85

Homeland Security 88 projections. spending baseline Office’s 2016 Budget (CBO’s) August Congressional the in 2018 FY for projected as authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING of fire-related emergencies database by reported incident-based Incident an System, Fire Reporting the to National data award grant fire matching by grants fire effectiveness the of evaluated ysis HeritageThe Foundation’s Center for Anal Data departments. fire volunteer of activities fortherecruitment and paying fighters fire career of salaries the funding levels by staffing intended increase to are grants (SAFER) Response and EmergencyFire for Adequate Staffing the and andrelatedhazards; public the protect fire from and of firefighters projects improve to safety the fund grants (FP&S) Prevention Safety Fire the and organizations; management emergency and ments depart fire of local activities routine the subsidizes program (AFG) Grant Firefighters to Assistance The encompass anumber of programs: grants Fire RATIONALE 2018. FY in million saves $715 proposal This the by Emergency (FEMA). Federal ManagementAgency administered program grant fire the Eliminate RECOMMENDATION Eliminate Fire Grants Ȗ Ȗ November 29, 2012. 29, November Foundation Heritage Program,” Ineffective an Reauthorize Not Do Grants: “Fire Muhlhausen, David B. 2009. September 23, Foundation Heritage Fire Casualties?” Reduce Fire Grants DHS “Do Muhlhausen, David B. The Heritage Foundation | Foundation Heritage The - - - received federal assistance. departments fire grant-funded before after and of grants impact the the compared evaluation the addition, In ments not did that receive grants. fire depart to grants receivedthat departments fire compared evaluation The (4) injuries. and civilian (2) deaths, deaths, injuries, firefighter civilian (3) firefighter casualties: (1) fire of different measures on four grants of impact fire the assessed evaluation the departments, 10,000 for fire 2006 more than fromto 1999 data panel Using departments. fire casualties as grant-funded fire departments. fire grant-funded as casualties at preventing fire ments successful were as just fire depart comparison grants, fire out receiving With injuries. civilian and deaths, civilian injuries, firefighter deaths, reduce firefighter to failed grants FP&S, SAFER and showed evaluation AFG, The that heritage.org Center Data Analysis for Report Issue Brief Issue No. 3788, 3788, No. No. 09-05, 09-05, No. - - - Homeland Security

Reduce Funding for FEMA’s Disaster Relief Fund RECOMMENDATION Reduce funding for FEMA’s Disaster Relief Fund (DRF). This proposal saves $2 billion in FY 2018.

RATIONALE Throughout most of U.S. history, state and local In FY 2016, FEMA’s DRF received $7.375 billion in governments were responsible for responding to budget authority. This spending can be reduced by nearly all disasters, regardless of the cause. Under at least $2 billion by reforming the Stafford Act to President Ronald Reagan, FEMA averaged 28 fed- return more responsibility for disasters to state and eral disaster declarations a year. After the passage local governments. First, Congress should increase of the amended Stafford Act in 1988, this number the Stafford Act threshold to require $3 per capita dramatically changed, with federal disaster decla- in damages with a $5 million minimum threshold rations rising significantly, so that under President (under which a federal disaster is never declared), George W. Bush the U.S. averaged around 130 feder- and a $50 million maximum threshold (over which al disaster declarations a year, and under President a disaster declaration is usually issued). Obama around 120 disasters a year. Second, the FEMA cost share should be reduced The Stafford Act has two provisions that are to from between 75 percent and 100 percent to 25 blame: one that shifts most of the costs of a fed- percent, with a greater cost share for large catastro- eralized disaster to the federal government, and phes. This system of funding will require states to another that makes it relatively easy for a regional take responsibility for more localized disasters. It or localized disaster to qualify as a federal disaster. will also ensure that FEMA is able to respond to This combination of easy-to-acquire federal assis- disasters more effectively, and that it can save funds tance and the substantial monetary benefit from for catastrophic disasters. For disasters that top $5 federal involvement puts FEMA in high demand, billion, the cost-share provision should gradually leaving it unprepared—in terms of readiness and increase as the cost of the disaster increases. This money—for truly catastrophic disasters where it is gradual increase in cost sharing should be capped at most needed. 75 percent once a disaster tops $20 billion.

ADDITIONAL READING ȖȖ David Inserra, “FEMA Reform Needed: Congress Must Act,” Heritage Foundation Issue Brief No. 4342, February 4, 2015.

CALCULATIONS Savings represent an estimate of potential savings based on current programs and their budget authority as authorized and found in the Consolidated Appropriations Act, 2016, Public Law 114–113, pp. 263–268.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 89 90 level. million $750 the proposed million)and ($784 figure 2018 FY estimated of this difference the equal Savings projections. spending baseline 2016 recent August most its in CBO by the percent) (–0.32 projected as 2018 FY in spending discretionary rate as same atthe decreases then level and 2016 FY at its steady holds spending 2017 FY the that assumes 269. Heritage p. 114–113, Law Public 2016, Act, Appropriations Consolidated the in found and authorized as 2016 FY for million of $787 authority budget on based are Savings CALCULATIONS Ȗ ADDITIONAL READING most powerful the is sector ment, private U.S. the equip response disaster to innovations technology and cybersecurity From private officials. local and of DHS to interest personnel are or that state ucts develop to new prod striving constantly is sector work the cate sector. of private the private U.S. The S&T it must do that doesnot more dupli ensure to resources. appropriately to and allocate department” the across toactivities oversee it difficult “makes also butness mission of needs, end meeting in products useful the not only harms activities of research components.” respective their one from of transitioned S&T’shad projects to R&D of few or they were S&T aware nosaid that products DHS components “consistently were that surveyed Office, Government the to Accountability According RATIONALE 2018. FY in developments. million saves private-sector $34 proposal using and needs This (DHS) (S&T) Science the ofRefocus Homeland &Technology Directorate on Department meeting Security RECOMMENDATION Needs andUsing Developments Private-Sector Refocus ScienceandTechnology onMeeting DHS Ȗ Special Report Foundation It,” on Heritage Depend Lives American Priorities: Security of Homeland Department Re-Set Must “Congress David Inserra, 2 No. 175, January 3, 2017. 3, January 175, No. 1 Poor coordination coordination Poor The Heritage Foundation | Foundation Heritage The - - - - meet DHS needs. This effort should be expanded should effort be expanded meet DHS This needs. to adapted could be that or technologies emerging out seeks existing which foraging,” “technology on it what focusing calls begun has Partnerships S&T’s result, Developmentand office ofResearch DHS’sAs a requirements. or general needs specific could meet that sector private the in available of or technologies know products may not always force for world. the innovation in S&T, however, DHS components. DHS technologies needed by on efforts delivering its it that refocus mandate and aboutto $750 million S&T should trim meet Congress to mission needs. R&D of private-sector use greater make DHS can Act, of SAFETY the Together expansion the with development. and brand-new research than faster be likely government the it will costs lessas and heritage.org Homeland Security

Streamline FEMA Grant Programs RECOMMENDATION Streamline FEMA grant programs. This proposal saves $300 million in FY 2018.

RATIONALE While federal grants to state and local partners may risks. Failure to prioritize grants weakens security be of value in some cases, the current structure does and preparedness, and continues waste and abuse. not adequately prioritize grants based on the risks In this process of moving DHS grants to a more risk- they are trying to reduce. To the Obama Admin- based allocation system, the grant programs must istration’s credit, it recommended consolidating be evaluated to see which needs they are meeting many of these grants into a new National Prepared- and how well they are doing so. ness Grant Program that would allot grants in a more risk-based fashion. Grant programs that are found to be ineffective or unnecessary should be cancelled, such as the Congress should revisit grant consolidation and SAFER and Fire Prevention and Safety (FP&S) expand it to cover more grant programs. Grants grants, as well as the Assistance to Firefighter that meet the greatest need in areas of high risk Grants (AFG), mentioned under “Eliminate Fire should be prioritized. These grant dollars should Grants” in this section. Applying similar prioritiza- not be viewed as another entitlement to send back tion and elimination to other grant programs could to each congressional district, but as limited home- save around $300 million in FY 2018. land security funding that will alleviate the greatest

ADDITIONAL READING ȖȖ David Inserra, “Congress Must Re-Set Department of Homeland Security Priorities: American Lives Depend on It,” Heritage Foundation Special Report No. 175, January 3, 2017.

CALCULATIONS Savings are based on estimated spending reductions that would result from implementing a risk-based system to prioritize grants based on national preparedness needs. Compared to the current system that grants significant amounts to unnecessary and ineffective programs, this proposal could save about $300 million per year (on top of savings from eliminating already listed grant programs).

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 91 92 2. 1. ENDNOTES September 9, 2014, p. 22,http://www.gpo.gov/fdsys/pkg/CHRG-113hhrg92900/pdf/CHRG-113hhrg92900.pdf (accessed February 8,2017). on Research andTechnology, Committee onScience, Space, andTechnology, U.S. HouseofRepresentatives, 113thCong., 2ndSess., Infrastructure Protection, andSecurity Technologies, Committee onHomelandSecurity, U.S. HouseofRepresentatives, andSubcommittee “Strategy andMission oftheDHSScience andTechnology Directorate,” joint hearingbefore theSubcommittee onCybersecurity, and Governmental Affairs, U.S. Senate, January2015, p. 137. Senator Tom Coburn, “A Review oftheDepartment ofHomelandSecurity’s Missions andPerformance,” Committee on HomelandSecurity The Heritage Foundation | Foundation Heritage The heritage.org Interior, Environment, and Related Agencies Eliminate NineClimatePrograms ADDITIONAL READING (GHGs),reduceto of agency efforts deny funding Whether carbon dioxide and other dioxide and GHG carbon emissionsWhether Con 1963, in passed was Act Air Clean the When Eliminate nine climate-related programs. This proposal saves $3.566 billion in FY 2018. FY in billion saves $3.566 proposal This programs. climate-related nine Eliminate CALCULATIONS 94 GHGs, and repeal any agency actions that serve serve agency that actions any GHGs, repeal and should prohibit expressly Congress agency regula RATIONALE RECOMMENDATION life could be unprecedented, without offering any unprecedented, offering could be without life measurable environmental benefit. environmental rea Forthese measurable would covered be under on for earth, life required mate data do not indicate that the earth is heading heading is earth dothe not that data mate indicate have or have not affected climate, the actual cli the actual climate, have or have not affected ulation are staggering, and its effect effect its on everyday and staggering, ulation are Savings are expressed as budget authority for FY 2018, including the categories of “Science and Technology” ($775 million) and “Environmental “Environmental million) and ($775 Technology” and of “Science categories the including 2018, FY for authority budget as expressed are Savings toward catastrophic warming with dire conse dire with warming catastrophic toward EPA’s the tions, such as endangerment finding. gases greenhouse tion other of CO2 and so-called tion (EPA) Agency or other agencies, federal should law.the economic The implications of CO2 reg gress never intendedgress or envisioned car that do the data indicate that the dominant driving force driving dominant the that indicate do data the Nor public and welfare. quences health for human develop to CO2 or regula indirectly either directly reviews. permit or considered environmental in decide dioxide should whether regulated be carbon sons, Congress, and not the Environmental Protec not Environmental and the sons, Congress, spending projections. spending bon dioxide (CO2), odorless and invisible gas an Programs and Management” ($2.791 billion) according to the Congressional Budget Office’s (CBO’s) most recent August 2016 baseline baseline 2016 Office’s Budget (CBO’s) recentAugust most billion) to Congressional ($2.791 according the Management” and Programs Ȗ Ȗ Ȗ Ȗ Heritage Foundation Foundation Heritage Policies,” Extreme for Justification No State of Climate Science: “The Tubb, Kevin Katie D. and David Dayaratna, W. Loris, Kreutzer, Nicolas Foundation Heritage Benefits,” Environmental Zero Essentially Costs, Economic Protocol: Devastating of Paris David W. and Kreutzer, “Consequences Loris, Nicolas Kevin D. Dayaratna, Backgrounder No. 3119, April 22, 2016. 22, April 3119, No. The Heritage Foundation | Foundation Heritage The Backgrounder - - - - No. 3080, April 13, 2016. 13, April 3080, No. - - - - - There is noThere is need for EPA the and costly impose to Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Congress should eliminate funding for: funding should eliminate Congress warming fail to account to for major the inconsisten fail warming house gas emissions. Theories about catastrophic emissions. about Theories catastrophic house gas energy use. energy Americans’ intendedonerous limit to regulations models underlie that regulations. climate cies in behind climate change is human-induced green human-induced is change climate behind Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ aircraft, and transportation fuels); transportation and aircraft, (as non-road as well equipment, locomotives, of GHGRegulation vehicles emissions from Research and Development. and Research for of Office the funding research Climate and Initiative; Water Utilities Ready Climate The Program; GreenThe Infrastructure Tool; Awareness Evaluation Resilience Climate The Fund; Resilience Climate The Initiative; Global Methane The Program; Reporting Greenhouse Gas The sources; other boilers, and stationary factory of CO2 power emissions from Regulation plants, heritage.org - - Interior, Environment, and Related Agencies

Eliminate Funding for Two EPA Research Programs RECOMMENDATION Eliminate funding for two EPA research programs. This proposal saves $245 million in FY 2018.

RATIONALE ȖȖ The Air, Climate, and Energy research program ȖȖ The Sustainable and Healthy Communities has repeatedly violated data-quality standards, research program does not address and has relied on deeply flawed research to craft environmental priorities, and it is inappropriate global warming regulations. This proposal saves for the federal government to control local $92 million in FY 2018. projects. This proposal saves $153 million in FY 2017.

ADDITIONAL READING ȖȖ The Heritage Foundation, “Eight Principles of the American Conservation Ethic,” 2012. ȖȖ Diane Katz, “An Environmental Policy Primer for the Next President,” Heritage Foundation Backgrounder No. 3079, December 14, 2015. ȖȖ Nicolas Loris, “EPA Is Desperately in Need of Budget Cuts. Here’s a Few Places to Start,” The Daily Signal, July 10, 2014.

CALCULATIONS Savings estimates are based on FY 2016 enacted budget authority as found in U.S. Environmental Protection Agency, “Fiscal Year 2017 Justification of Appropriation Estimates for the Committee on Appropriations,” February 2017, pp. 1094 and 1100, https://www.epa.gov/ planandbudget/fy-2017-justification-appropriation-estimates-committee-appropriations (accessed February 3, 2017). This estimate assumes that the FY 2016 spending levels will hold constant in FY 2017 and will then decrease at the same rate as discretionary spending growth (–0.32 percent) for FY 2018, according to the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 95 Reduce EPA Infrastructure Needs ADDITIONAL READING Appropriation Estimates for the Committee on Appropriations,” February 2016, pp. 1094–1100, https://www.epa.gov/planandbudget/fy-2017- 1094–1100, pp. 2016, February Appropriations,” on Committee the for Estimates Appropriation 2016 spending level of $491 million for Facilities and Infrastructure Operations will hold steady in FY 2017 and decrease at the same rate as rate as same at the decrease and 2017 FY in steady will hold Operations Infrastructure and Facilities for million level of $491 spending 2016 Facilities Infrastructure and Operations (savings Operations (savings and Facilities Infrastructure 2018. FY in million $49 are Reduce savings EPA operation IT and Estimated needs. facilities CALCULATIONS 96 Congress should reduce byCongress 10 percent estimat the RATIONALE RECOMMENDATION responsibilities shouldresponsibilities lower overhead costs. Savings are based on FY 2016 enacted budget authority as found in U.S. Environmental Protection Agency, “Fiscal Year 2017 Justification of Year Justification 2017 “Fiscal Agency, Protection Environmental U.S. in found as authority budget enacted 2016 FY on based are Savings of $49 million). Reductions in agency programs and and of million). $49 agency Reductions programs in for EPA’s the 2018 FY funding in million $489 ed discretionary spending growth (–0.32 percent) in FY 2018, according to the CBO’s August 2016 baseline spending projections. A 10 percent percent A10 projections. spending baseline 2016 to August CBO’s according the 2018, percent) (–0.32 growth FY in spending discretionary justification-appropriation-estimates-committee-appropriations (accessed December 20, 2016). This estimate assumes that the enacted FY enacted the that assumes estimate This 2016). 20, December (accessed justification-appropriation-estimates-committee-appropriations Ȗ Ȗ reduction equals $49 million in savings for FY 2018. FY for savings in million $49 equals reduction Ȗ Ȗ Nicolas D. Loris, “EPA Is Desperately in Need of Budget Cuts. Here’s a Few Places to Start,” The Daily Signal, July 10, 2014. 10, July Signal, Daily to The Here’s Start,” aFew Places Cuts. of Budget Need in “EPA Desperately Is D. Loris, Nicolas Foundation Heritage President,” Next the for Primer “An Policy Katz, Environmental Diane The Heritage Foundation | Foundation Heritage The - heritage.org Backgrounder No. 3079, December 14, 2015. 14, 3079, December No. Interior, Environment, and Related Agencies

Eliminate Six Redundant EPA Programs RECOMMENDATION Eliminate the (1) National Estuary/Coastal Waterways, (2) Integrated Environmental Strategies, (3) Pollution Prevention, (4) Surface Water Protection, (5) Federal Vehicle and Fuels Standards and Certification, and (6) Waste Minimization and Recycling programs. This proposal saves $353 million in FY 2018.1

RATIONALE Congress should eliminate: ȖȖ The Surface Water Protection program. States, ȖȖ The National Estuary/Coastal Waterways not the federal government, should manage program. Restoration and protection of estuaries bodies of water that fall within their boundaries and coastal areas are best managed by states (lakes, rivers, streams). State management would and private property owners, not the federal increase accountability, transparency, and government. (Saves $27 million.) efficiency. (Saves $200 million.) ȖȖ Integrated Environmental Strategies programs. ȖȖ The Federal Vehicle and Fuels Standards and Promoting “sustainability,” “smart growth,” Certification program. Government-mandated

and similar social engineering is not a proper emissions standards are unnecessary in light function of the federal government. (Saves of consumer demand for fuel efficiency. The $11 million.) Renewable Fuel Standard unnecessarily increases food and energy prices in order to ȖȖ The Pollution Prevention program. This program does not contribute to remediation benefit a small set of special interests. (Saves of existing pollution problems, and engages $93 million.) in activities that are better carried out by the ȖȖ Waste Minimization and Recycling programs private sector. (Saves $13 million.) under the EPA-developed Resource Conservation and Recovery Act. These programs do not contribute to actual cleanup of hazardous waste, and instead focus on promoting recycling and other unnecessary activities. (Saves $9 million.)

CALCULATIONS Savings are based on enacted budget authority for FY 2016 as found in U.S. Environmental Protection Agency, “Fiscal Year 2017 Justification of Appropriation Estimates for the Committee on Appropriations,” February 2016, pp. 1093–1102, https://www.epa.gov/sites/production/files/2016- 02/documents/fy17-congressional-justification.pdf (accessed January 31, 2017). The requested FY 2016 levels were assumed to hold constant in FY 2017 and to decline slightly (–0.32 percent) in FY 2018 in accordance with an overall projected decline in discretionary spending according to the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 97 Reduce Funding fortheEPA’s Justification of Appropriation Estimates for the Committee on Appropriations,” February 2016, p. 725. This estimate assumes that the enacted enacted the that assumes estimate This 725. p. 2016, February Appropriations,” on Committee the for Estimates Appropriation of Justification ADDITIONAL READING 2018, according to CBO’s most recent August 2016 baseline spending projections. A 30 percent cut in that funding equals $52 million. $52 equals funding that in cut percent A30 projections. spending baseline 2016 recent August to according most CBO’s 2018, Civil Enforcement Program FY 2018. FY in saves $52 proposal million by percent. 30 Enforcement This for program Civil the Reduce funding CALCULATIONS 98 Congress should $174 reduce the Congress estimat in million RATIONALE RECOMMENDATION impose an element an impose force to agency the of discipline Savings are based on the FY 2016 enacted budget authority of $174 million as found in U.S. Environmental Protection Agency, “Fiscal Year 2017 “Fiscal Agency, Protection Environmental U.S. in offound $174 as million authority budget enacted 2016 FY the on based are Savings the EPA engages in unnecessary and excessive legal and EPAthe engages unnecessary in against cases judicial civil and administrative tles actions. Therefore, a reduction in funding should Therefore,actions. funding areduction in gram by 30 percent. The program litigates and set and litigates by percent. 30 program The gram ed FY 2018 funding for the Civil Enforcement for pro Civil the 2018 FY ed funding serious violators of environmental laws. However, However, laws. environmental of violators serious spending level for FY 2016 will hold constant in FY 2017, and decrease at the same rate (–0.32 percent) as discretionary spending growth in FY FY in growth spending rate percent) (–0.32 discretionary as same at the 2017, decrease FY in and constant will hold 2016 level FY for spending Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ John G. Malcolm, “Civil Asset Forfeiture: A System in Need of Reform,” Heritage Foundation Foundation of Reform,” Heritage ASystem Need in Forfeiture: “Civil Asset Malcolm, G. John State Senate, September 28, 2015. 28, State September Senate, September 29, 2014. Diane Katz, “An Environmental Policy Primer for the Next President,” Heritage Foundation Foundation Heritage President,” Next the for Primer “An Policy Katz, Environmental Diane Foundation Heritage Idea,” aGood Not Order: aCourt Without Garnishment Kloster, “Wage Andrew and Gordon Robert The Heritage Foundation | Foundation Heritage The - - - without a court order. court a without to the Treasury Department for wage garnishment for garnishment wage Department Treasury the to enforcement EPA The and activities. regulatory to challenges legal about inviting more be to careful garnish wages without a court order fines collect to acourt without wages garnish or other penalties, and from referring such cases such cases referring from or and other penalties, should also be prohibited from using resources to to resources prohibited be using from should also heritage.org

Backgrounder Testimony Legal on Issues No. 3079, December 14, 2015. 14, 3079, December No. before the Oklahoma Oklahoma the before Issue Brief Brief Issue No. 4275, 4275, No. Interior, Environment, and Related Agencies

Reduce Funding for the EPA’s External Civil Rights Compliance Office/Title VI

RECOMMENDATION Reduce Funding for the EPA’s External Civil Rights Compliance Office (ECRCO)/Title VI. This proposal saves $5 million in FY 2018.

RATIONALE Congress should reduce the $10 million in esti- on civil rights and equal opportunity in employ- mated FY 2018 funding for the Civil Rights/Title ment. However, the office also undertakes a variety VI Compliance Office by 50 percent. The program of other “outreach” and non-essential functions. provides the agency policy direction and guidance

CALCULATIONS Savings are based on the FY 2016 enacted budget authority of $10.1 million found in U.S. Environmental Protection Agency, “Fiscal Year 2017 Justification of Appropriation Estimates for the Committee on Appropriations,” February 2016, p. 408, https://www.epa.gov/sites/production/ files/2016-02/documents/fy17-congressional-justification.pdf (accessed February 3, 2017). This estimate assumes the FY 2016 appropriation will hold steady in FY 2017 and will decrease at the same rate (–0.32 percent) as discretionary spending growth in FY 2018, according to the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 99 Reduce theEPA’s Legal Advice ADDITIONAL READING Year 2017 Justification of Appropriation Estimates for the Committee on Appropriations,” February 2016, p. 414, https://www.epa.gov/sites/p. 414, 2016, February Appropriations,” on Committee the for Estimates Appropriation of Year Justification 2017 Reduce the EPA’s legal advice programs by 50 percent. This proposal saves $25 million in FY 2018. FY Reduce EPA’s in the saves $25 million proposal by percent. 50 This programs advice legal CALCULATIONS 100 Congress should reduce the $49 million in estimat in should million $49 reduce the Congress RATIONALE RECOMMENDATION Savings are based on the FY 2016 enacted budget authority level of $49 million as found in U.S. Environmental Protection Agency, “Fiscal “Fiscal Agency, Protection Environmental U.S. in found as million level of $49 authority budget enacted 2016 FY the on based are Savings according to the CBO’s most recent August 2016 baseline spending projections. A 50 percent reduction in estimated FY 2018 spending of $49 of $49 spending 2018 FY estimated in reduction percent A 50 projections. spending baseline 2016 recent August to most CBO’s according the gram provides legal representational services, legal legal representational services, provides legal gram counseling, and legal support for all of EPA’s the for support legal all and counseling, pro by percent. 50 This programs environmental for EPA’s the 2018 FY ed funding on advice legal on Environmental Programs spending level will hold steady in FY 2017 and will decrease at the same rate (–0.32 percent) as discretionary spending growth in FY 2018, 2018, FY in growth spending rate percent) (–0.32 discretionary as same at the will decrease and 2017 FY in steady level will hold spending Ȗ Ȗ Ȗ million equals $24.49 million. $24.49 equals million 2016 FY the assumes estimate This 2017). 3, February (accessed production/files/2016-02/documents/fy17-congressional-justification.pdf Ȗ Ȗ Ȗ John G. Malcolm, “Civil Asset Forfeiture: A System in Need of Reform,” Heritage Foundation Foundation of Reform,” Heritage ASystem Need in Forfeiture: “Civil Asset Malcolm, G. John State Senate, September 28, 2015. 28, State September Senate, September 29, 2014. Diane Katz, “An Environmental Policy Primer for the Next President,” Heritage Foundation Foundation Heritage President,” Next the for Primer “An Policy Katz, Environmental Diane Foundation Heritage Idea,” aGood Not Order: aCourt Without Garnishment Kloster, “Wage Andrew and Gordon Robert The Heritage Foundation | Foundation Heritage The - - the agency’s regulatory activity is excessive. is There activity agency’sthe regulatory and enforcement activities. enforcement and environmental activities. A significant amount of Asignificant activities. environmental should impose discipline on the agency’s regulatory on agency’sshould the discipline impose regulatory fore, a reduction in funding for representation legal fore, funding areduction in heritage.org

Backgrounder Testimony Legal on Issues No. 3079, December 14, 2015. 14, 3079, December No. before the Oklahoma Oklahoma the before Issue Brief Brief Issue No. 4275, 4275, No. - Interior, Environment, and Related Agencies

Eliminate the EPA’s Stratospheric Ozone Multilateral Fund

RECOMMENDATION Eliminate the EPA’s Stratospheric Ozone Multilateral Fund. This proposal saves $9 million in FY 2018.

RATIONALE Congress should eliminate the estimated $9 mil- evidence shows that ozone depletion was an exag- lion in FY 2018 funding for the Stratospheric Ozone gerated threat; no ecosystem or species were ever Multilateral Fund. The fund was created by parties shown to be seriously harmed by ozone depletion. to the 1987 Montreal Protocol to support efforts by As it is, the U.S. has long paid a disproportionate developing countries to phase out the use of strato- share of the funding. spheric ozone-depleting substances. The current

ADDITIONAL READING ȖȖ The Heritage Foundation, “Eight Principles of the American Conservation Ethic,” 2012. ȖȖ Ben Lieberman, “Ozone: The Hole Truth,” Heritage Foundation Commentary, September 14, 2007. ȖȖ Diane Katz, “An Environmental Policy Primer for the Next President,” Heritage Foundation Backgrounder No. 3079, December 14, 2015.

CALCULATIONS Savings are based on the FY 2016 enacted budget authority of $8.9 million as found in U.S. Environmental Protection Agency, “Fiscal Year 2017 Justification of Appropriation Estimates for the Committee on Appropriations,” February 2016, p. 247, https://www.epa.gov/sites/production/ files/2016-02/documents/fy17-congressional-justification.pdf (accessed February 3, 2017). This estimate assumes the FY 2016 spending level will hold steady in FY 2017 and will decrease at the same rate (–0.32 percent) as discretionary spending growth in FY 2018, according to the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 101 Exchange/Outreach Programs Eliminate theEPA’s Information ADDITIONAL READING (EE) through grants, curricula, and other and mate curricula, grants, through (EE) The EPA has allocated taxpayer money projects to taxpayer EPAThe allocated has Eliminate the EPA’s the 2018. Eliminate FY in saves $126 million proposal exchange/outreach This information programs. CALCULATIONS 102 RATIONALE RECOMMENDATION issues, and general “environmental literacy.” general “environmental and issues, has EE for public go nonprofit to education. Grants rials Savings are expressed as budget authority and were calculated by using the FY 2016 enacted level of $126 million as found in U.S. Environmental Environmental U.S. in found as million level of $126 enacted 2016 FY the by using were calculated and authority budget as expressed are Savings the most popular topics biodiversity, being most popular the water of stewardship, awareness increase educate and that also produced controversial classroom material on material produced classroom controversial also groups, schools, and government schools, and groups, agencies with children’s health, and environmental education environmental and children’s health, discretionary spending growth in FY 2018, according to the CBO’s most recent August 2016 baseline spending projections. spending baseline 2016 recent August to most CBO’s according the 2018, FY in growth spending discretionary estimate assumes that the requested FY 2016 spending level will hold constant in FY 2017 and will decrease at the same rate percent) (–0.32 as same at the will decrease and 2017 FY in constant level will hold spending 2016 FY requested the that assumes estimate Protection Agency, “Fiscal Year 2017: Justification of Appropriation Estimates for the Committee on Appropriations,” February 2016, p. 1096, 1096, p. 2016, February Appropriations,” on Committee the for Estimates Appropriation of Year 2017: Justification “Fiscal Agency, Protection Ȗ Ȗ Ȗ https://www.epa.gov/sites/production/files/2016-02/documents/fy17-congressional-justification.pdf(accessed February 3, 2017). This Ȗ Ȗ Ȗ The Heritage Foundation, “Eight Principles of the American Conservation Ethic,” 2012. Conservation American of the Principles “Eight Foundation, Heritage The Nicolas Loris, “EPA Is Desperately in Need of Budget Cuts. Here’s a Few Places to Start,” The Daily Signal, July 10, 2014. 10, July Signal, Daily to The Here’s Start,” aFew Places Cuts. of Budget Need in “EPA Desperately Is Loris, Nicolas Foundation Heritage President,” Next the for Primer “An Policy Katz, Environmental Diane The Heritage Foundation | Foundation Heritage The - 1992, the EPA has granted more than $68.7 million $68.7 million more than EPA the 1992, granted has to these programs. these to appropriate government. of scope federal Such the global warming that ignores the broader the ignores that scientific warming global ects might be worthwhile, they are far beyond the far they are worthwhile, be might ects Since change. of climate debate about nature the private companies. private level at or local projects the by should funded be heritage.org

Backgrounder 2 While some proj of these While No. 3079, December 14, 2015. 14, 3079, December No. - Interior, Environment, and Related Agencies

Eliminate the Land and Water Conservation Fund RECOMMENDATION Allow the Land and Water Conservation Fund (LWCF) to expire permanently. This proposal saves $20.5 billion in FY 2018.

RATIONALE Congress enacted the LWCF in 1965, to allow the (FS), (2) the Bureau of Land Management (BLM), federal government to use royalties from offshore (3) the Fish and Wildlife Service (FWS), and the (4) energy development to purchase private land and National Park Service (NPS). Congress also uses the turn it into public parks and other public recreation fund for a matching state grant program, though areas. Of the $38.0 billion credited to the fund, less it has become a minor part of the LWCF, which than half—$17.5 billion—has been spent, leaving a now chiefly funds federal objectives. This massive credit of $20.5 billion.3 Congress should rescind the amount of federal ownership has resulted in land remaining balance, generating a one-time savings of mismanagement, stifled opportunities for recre- $20.5 billion in FY 2018. ation and resource production, and poor environmental management. Rather than placing more The federal government owns some 640 million decisions under Washington’s control, Congress acres of land throughout the country—nearly 30 should empower the states and local communities percent of the entire country, and nearly half of the to protect their environments, maximize the value western United States. The LWCF is the primary of the land, and create new opportunities for eco- vehicle for land purchases by the four major federal nomic development. land-management agencies: (1) the Forest Service

ADDITIONAL READING ȖȖ Katie Tubb and Nicolas D. Loris, “Five Reasons to Sunset the Land and Water Conservation Fund,” Heritage Foundation Backgrounder No. 3165, November 16, 2016.

CALCULATIONS Savings equal the remaining LWCF balance of $20.5 billion as reported in Carol Hardy Vincent, “Land and Water Conservation Fund: Appropriations for “Other Purposes,” September 1, 2016.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 103 Eliminate theNational CleanDieselCampaign ADDITIONAL READING Act (DERA) grant program. This proposal saves $50 million in FY 2018. FY in saves million $50 proposal This program. grant (DERA) Act The government has spent hundreds of millions of government spentThe millions hundreds has Eliminate the National Clean Diesel Campaign (NCDC), commonly called the Diesel Reduction the Emissions (NCDC), commonly called Diesel Campaign National Clean the Eliminate CALCULATIONS 104 RATIONALE RECOMMENDATION retrofitted tractors and cherry pickers in Utah, pickersin and Utah, cherry tractors retrofitted Savings are expressed as budget authority and were calculated by using the FY 2016 enacted level of $50 million as found in U.S. Environmental Environmental U.S. in found as million level of $50 enacted 2016 FY the by using were calculated and authority budget as expressed are Savings tion Act grants have been used to pay to for have been used new or grants tion Act pieces diesel technology, of 60,000 clean such than assumes that the FY 2016 spending level holds constant in FY 2017 and decreases at the same rate as discretionary spending (–0.32 percent) (–0.32 in spending discretionary rate as same at the decreases and 2017 FY in constant level holds spending 2016 FY the that assumes options.” fuel alternative “emissions idle controlas aerodynamic and devices, electrified parking spaces at a Delaware truck stop, truck spaces Delaware at a parking electrified vehicleequipment, and replacements, engine and develop to over years the more dollars of taxpayer FY 2018, according to the CBO’s most recent August 2016 baseline spending projections. spending baseline 2016 recent August to most CBO’s according the 2018, FY 860, p. 2016, February Appropriations,” on Committee the for Estimates Appropriation of Year 2017: Justification “Fiscal Agency, Protection Ȗ Ȗ Ȗ https://www.epa.gov/sites/production/files/2016-02/documents/fy17-congressional-justification.pdf (accessed February 3, 2017). This estimate This 2017). 3, February (accessed https://www.epa.gov/sites/production/files/2016-02/documents/fy17-congressional-justification.pdf Ȗ Ȗ Ȗ The Heritage Foundation, “Eight Principles of the American Conservation Ethic,” 2012. Conservation American of the Principles “Eight Foundation, Heritage The Katrina Trinko, “Heritage Experts Weigh in on Massive Omnibus Spending Bill,” The Daily Signal, January 13, 2014. 13, January Signal, Daily Bill,” The Spending Omnibus Weigh Massive on in Experts Trinko,Katrina “Heritage 2014 10, July Signal, Daily to The Here’s Start,” aFew Places Cuts. of Budget Need in “EPA Desperately Is Loris, Nicolas 4 Diesel Emissions Reduc Emissions Diesel The Heritage Foundation | Foundation Heritage The - Joaquin Valley.Joaquin Federal taxpayers should notFederal pay have to for taxpayers proj in Pennsylvania, school buses in San Diego County, San school in buses Pennsylvania, in and new equipment engines for farmers in the San new San the equipmentand in for engines farmers generators and a new engine for a1950s locomotive or state and local groups. local or and state investors by private should that undertaken be ects heritage.org 5 - Interior, Environment, and Related Agencies

Eliminate Environmental Justice Programs RECOMMENDATION Eliminate all “environmental justice” programs. This proposal saves $7 million in FY 2018.

RATIONALE The EPA’s “environmental justice” programs were example, the Environmental Justice Small Grants originally designed to protect low-income commu- Program has funded neighborhood litter cleanups; nities from environmental harm. However, the EPA education on urban gardening, composting, and now too often goes beyond this purpose to prevent the negative effects of urban sprawl and automobile job-creating businesses from developing in low-independence; and a pilot program to reach Califor- come communities, thus blocking the very econom- nia’s nail salon community in order to increase ic opportunity that the communities need. “knowledge of healthy/green nail salon concepts and practices.”6 Congress should eliminate these Further, environmental justice programs have programs, which have been co-opted by political expanded to subsidize state and local projects that agendas and do not merit taxpayer resources. federal taxpayers should not be forced to fund. For

ADDITIONAL READING ȖȖ The Heritage Foundation, “Eight Principles of the American Conservation Ethic,” 2012. ȖȖ Nicolas Loris, “EPA Is Desperately in Need of Budget Cuts. Here’s a Few Places to Start,” The Daily Signal, July 10, 2014. ȖȖ James Rust, “‘Environmental Justice’ Injustice (EPA Elitism, Exploitation),” Master Resource, August 13, 2014.

CALCULATIONS Savings are expressed as budget authority and were calculated using the FY 2016 enacted level of $6.7 million as found on page 1,095 of U.S. Environmental Protection Agency, “Fiscal Year 2017: Justification of Appropriation Estimates for the Committee on Appropriations,” February 2016, p. 1095, https://www.epa.gov/sites/production/files/2016-02/documents/fy17-congressional-justification. pdf (accessed February 3, 2017). This estimate assumes that FY 2016 spending holds steady in FY 2017 and decreases at the same rate (–0.32 percent) as discretionary spending for FY 2018, according to the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 105 Eliminate theNational Endowment for theHumanities The agency is subject to the annual appropriations agency subject annual The the is to on created September 29, was NEH The 1965, by Private individuals and organizations should be organizations and individuals Private Act. Humanities the Foundation and on Arts the President Lyndon National the Johnson through saves $154 proposal This for National Endowment the (NEH). for Humanities funding the federal Eliminate CALCULATIONS 106 worthy of continuedworthy funding. RATIONALE RECOMMENDATION ment should not coercive its power use of taxation 2018. FY in million Savings are expressed as budget authority as projected for FY 2018 in the CBO’s most recent August 2016 baseline spending projections. spending baseline 2016 recent August most CBO’s the in 2018 FY for projected as authority budget as expressed are Savings tions and activities. organiza cultural support to compelto taxpayers able to donate at their own discretion to humanities humanities able to donate discretion to at own their organizations and programs as they wish; govern they wish; as programs and organizations process, and it is up to Congress to determine if it is if determine to it up Congress is to and process, 7 The Heritage Foundation | Foundation Heritage The - - Americans gave $373.3 billion in charitable contri charitable in gave billion $373.3 Americans The NEH receiveda$147.9 NEH The appropriation million for FY 2017. FY Charitable giving as a whole increased 4percent awhole as increased giving Charitable humanities experienced an increase of 6.8 percent of 6.8 increase an experienced humanities tional $2.5 billion in matching funds.” matching in billion $2.5 tional grants totaling $5.3 billion, and leveraged an addi leveraged and an billion, $5.3 totaling grants dwarf private giving. private dwarf proper activity of the federal government. of federal the proper activity from 2014. from the and culture, for arts, 2014,from giving and butions in 2015, an increase of 4percent 2014. from butions increase 2015, in an heritage.org 8 The NEH has awarded “more than 63,000 63,000 “more than awarded has NEH The 10 The NEH is neither a necessary nor neither is NEH anecessary The

9 These funds funds These - - Interior, Environment, and Related Agencies

Eliminate the National Endowment for the Arts RECOMMENDATION Eliminate federal funding for the National Endowment for the Arts (NEA). This proposal saves $154 million in FY 2018.11

RATIONALE The NEA was created on September 29, 1965, by Further, federally funded arts programs are suscep- President Lyndon Johnson through the National tible to cultural cronyism, where special interests Foundation on the Arts and the Humanities Act. promoting a social agenda receive government favor Since its founding, the NEA has awarded more than to promote their causes.15 It is just as concerning $5 billion for arts participation.12 Taxpayer assis- when art funding promotes politically correct art. tance of the arts is neither necessary nor prudent. Taxpayers should not be forced to pay for plays, The NEA received a $148 million appropriation in paintings, pageants, and scholarly journals, regard- FY 2016.13 However, private contributions to the less of the works’ attraction or merit. In the words arts and humanities vastly exceed the amount proof Citizens Against Government Waste, “actors, vided by the NEA. Americans made $373.3 billion artists, and academics are no more deserving of in charitable contributions in 2015.14 Arts, culture, subsidies than their counterparts in other fields; and the humanities experienced a substantial the federal government should refrain from fund- increase, receiving 6.8 percent more than the previ- ing all of them.”16 ous year.

CALCULATIONS Savings are expressed as budget authority as projected for FY 2018 in the Congressional Budget Office’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 107 International CenterforScholars Eliminate Funding forWoodrow Wilson Woodrow Wilson Memorial Act of 1968. Woodrow Memorial Act Wilson policy anon-partisan as Woodrow and Wilson Center Wilson of The 1968. Memorial Act Wilson The Wilson Center was founded Center by Woodrow the Wilson was The In FY 2016, center FY In Wilson the receiveda$10.5 mil Funding for the Wilson center should be eliminated center for Wilson the should eliminated be Funding save will proposal for Center This Woodrow International for Wilson Scholars. funding Eliminate $12 million in FY 2018. FY in $12 million CALCULATIONS 108 RATIONALE RECOMMENDATION lion appropriation from Congress to carry out the lion carry appropriation to Congress from research about global policy and hosts events hosts to and policy about global research Savings are expressed as budget authority as projected for FY 2018 in the CBO’s most recent August 2016 baseline spending projections. spending baseline 2016 recent August most CBO’s the in 2018 FY for projected as authority budget as expressed are Savings serves as both the official memorial to President to memorial official the both as serves facilitate “open dialogue” about “actionable “open ideas.”facilitate dialogue” publishes Center Wilson regularly The forum. because it not is proper the because role for government to The Heritage Foundation | Foundation Heritage The 17 - Additionally, the Wilson Center has a plan, readily readily aplan, CenterAdditionally, Wilson has the Wilson Center will not close.” CenterWilson will would continue to be funded without appropria without would continue funded be to result of failure to pass an appropriation the an bill, pass to of failure result with do this that rently abreadth of organizations tions: “If there is a lapse in Federal funding as a as Federal in alapse funding there is tions: “If available on website, its available for how organization the al government should not spend taxpayer dollars governmental should dollars not spend taxpayer does not need assistance. need not does feder the and funds federal without operate can supporting an institution that, by its own admission, admission, by own its that, institution an supporting private funding. cur is there when research independent for pay heritage.org 18 The Wilson Center Wilson The - - - Interior, Environment, and Related Agencies

Rein in the EPA’s Ozone Standard RECOMMENDATION Rein in the EPA’s ozone standard. There are no estimated savings included for this proposal.

RATIONALE The EPA finalized a new ozone standard of 70 parts The ozone standard has only become more contro- per billion (ppb) in October 2015. The standard versial as it becomes increasingly expensive to meet is currently being litigated in the U.S. Court of tighter standards with smaller margins of tangible Appeals for the District of Columbia Circuit. This benefits. The EPA is increasingly setting Ameri- drastic action by the EPA is premature. States are can economic policy as it sets environmental poli- just now starting to meet the current 75 ppb stan- cy, enjoying nearly unfettered power to set ozone dard set in 2008. According to the Congressional standards and, indirectly, economic activity and Research Service, 123 million people live in areas land use. This has restricted opportunity, and com- that have not attained the current standards. In pliance costs are passed on to Americans, impact- fact, 105 million people live in areas that are still at ing the poor the most. Far from being a question of “nonattainment” for the less-stringent 1997 ozone whether or not to have clean, healthy air, the new standard. When nearly 40 percent of the nation’s standard goes well beyond what Congress intended population lives in areas that have not met the in the Clean Air Act. current standard, adopting an even more stringent standard is—at best—premature.19

ADDITIONAL READING ȖȖ Daren Bakst, “Statement Regarding Proposed Ozone Standards,” testimony before the U.S. Environmental Protection Agency, January 29, 2015. ȖȖ Diane Katz, “An Environmental Policy Primer for the Next President,” Heritage Foundation Backgrounder No. 3079, December 14, 2015.

CALCULATIONS Although this proposal will almost certainly generate significant savings both for the federal government as well as individuals and businesses, there are no reliable estimates for those savings and thus no specific savings are included here.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 109 Allow Development ofNatural Resources ADDITIONAL READING Allow natural resource development. Although this proposal would likely generate savings, the level the generate would likely of development. proposal savings, resource this Although natural Allow 110 Congress should open all federal waters and all all waters and federal should openCongress all RATIONALE RECOMMENDATION lower royalties) to attract interest to federal lands. lower federal to interest royalties) attract to rent authority (whether streamlining of red tape or of tape red rent (whether authority streamlining (whether exists interest for offshore or oil for off Department the should require Congress resources. to lands non-federal-monument non-wilderness, of the Interior to conduct lease sales if a commercial acommercial of Interior the if conduct to sales lease exploration production and of America’s natural shore wind), and to use its flexibility under cur its flexibility its use to shore and wind), We for 2018. factors. FY depends do savings not on anumber include ofsavings estimated unknown any Ȗ Ȗ Ȗ Ȗ October 31, 2014. 31, October Backgrounder Kevin D. Dayaratna, David W. Kreutzer, and Nicolas Loris, “Time to Unlock America’s Vast Oil and Gas Resources,” Heritage Foundation Foundation Heritage Resources,” Gas and Oil Vast America’s to Unlock “Time David W. Loris, Kevin D. Nicolas Kreutzer, Dayaratna, and Foundation Heritage Environment,” Clean a and Energy Affordable Supply Markets “Free D. Loris, Nicolas No. 3148, September 1, 2016. 1, September 3148, No. The Heritage Foundation | Foundation Heritage The - - A Heritage Foundation of access opening analysis would enjoy a total gain of more than $40,000 in in $40,000 of morewould enjoy than gain atotal to oil and gas resources on federal lands would have on lands federal resources gas and oil to aggregate GDP 2035. through gains translate into almost $3.7 trillion of increased of increased $3.7 trillion almost into translate gains shows that by 2035, the average American family family average the byshows 2035, American that personal income. In terms of aggregate GDP, of aggregate income. terms In personal these profoundly positive Modeling economic impacts. heritage.org Backgrounder No. 2966, 2966, No. Interior, Environment, and Related Agencies

Prohibit a Net Increase of Federal Lands RECOMMENDATION Prohibit a net increase of federal lands. While this recommendation does not save money, it prevents additional strain on the federal budget.

RATIONALE The federal estate is massive, consisting of some lands restrict economic activity, and, in many 640 million acres. The effective footprint is even instances, have created environmental problems larger because limitations on federal lands often due to mismanaged lands and lack of a proper affect the use of adjacent state and private lands, incentive structure to maintain the properties.20 since government agencies lock up lands through The Department of Interior estimates a backlog informal designations and study areas. Regulato- of deferred maintenance totaling $16.13 billion. ry pushes threaten to put almost all of the United Rather than acquiring more lands which the federal States under some form of federal jurisdiction. government cannot afford or maintain, Congress Federal ownership and federal regulation of public should prohibit any federal land acquisition.

ADDITIONAL READING ȖȖ Katie Tubb and Nicholas D. Loris, “The Federal Lands Freedom Act: Empowering States to Control Their Own Energy Futures,” Heritage Foundation Backgrounder No. 2992, February 18, 2015. ȖȖ U.S. House of Representatives Committee on Natural Resources, “Federal Footprint Map,” 2015.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 111 Eliminate Funding fortheJohn F. Kennedy The Kennedy Center was conceptualized in 1958 as 1958 as in KennedyThe conceptualized Center was In 2016, Congress appropriated $21.6 million dollars dollars 2016,In appropriated $21.6 million Congress Center forthePerforming Arts Even after receiving funds from the federal gov federal the from funds receiving Even after Lawmak Kennedy Center Arts. for Performing the Kennedy. F. 2018. FY in dollars save $39 million the will This Kennedy Center Arts. for Performing the restoration, of John the and F. repair capital and for operations the maintenance, and funding Eliminate CALCULATIONS 112 RATIONALE RECOMMENDATION ing Arts and the federal memorial to President to memorial federal the John and Arts ing has served as both the National Center the both for as Perform served has Savings are expressed as budget authority as projected for FY 2018 in the CBO’s most recent August 2016 baseline spending projections. spending baseline 2016 recent August most CBO’s the in 2018 FY for projected as authority budget as expressed are Savings a National Cultural Center. After opening in 1971, it 1971, in Center. opening After a National Cultural ernment, subscriptions for Kennedy Center Center Kennedy for subscriptions ernment, center. restoration of and arts the repair capital $14.7 additional appropriated for an ers also million for the operation and maintenance of John the for F. operation the maintenance and 22 The Heritage Foundation | Foundation Heritage The 23 - - - The federal government federal The doesnot have arespon Center could be funded by these private donations private by these Center funded could be tions to the arts, culture, and humanities increased increased humanities and culture, arts, the tions to are paying. are taxpay with rather than ticket robust sales the and experience the music the theaterexperience for and they which who may never of Americans everyday er dollars ernment obligations. ernment fund to dollars taxpayer Spending citizens. sibility to provide cultural experiences for experiences provide cultural to sibility performances cost $120 to $500. $120 to cost performances performing arts is outside is gov of scope the federal arts performing by 6.8 percentby 2014 6.8 from 2015. to heritage.org

24 24 25 21 The Kennedy Kennedy The Private dona Private - - - - Interior, Environment, and Related Agencies

ENDNOTES 1. Totals below may not add due to rounding. 2. U.S. Environmental Protection Agency, “Education: Environmental Education (EE) Grants,” https://www.epa.gov/education/environmental-education-ee-grants (accessed December 20, 2016). 3. Carol Hardy Vincent, “Land and Water Conservation Fund: Appropriations for “Other Purposes,’” Congressional Research Service, September 1, 2016, https://www.fas.org/sgp/crs/misc/R44121.pdf (accessed January 13, 2016). 4. Metropolitan Energy Center, “Clean Cities: Grants & Rebates,” http://www.metroenergy.org/index.php/clean-transportation/transportation-grants/ (accessed November 20, 2015). 5. Environmental Protection Agency, “Clean Diesel: Clean Diesel National Grants, Awarded Grants (2012–2015),” https://www.epa.gov/cleandiesel/clean-diesel-national-grants (accessed December 20, 2016). 6. Environmental Protection Agency Office of Enforcement and Compliance Assurance, “Environmental Justice Small Grants; FY2013 Summaries by Region,” September 11, 2013, http://www.epa.gov/compliance/environmentaljustice/resources/publications/grants/ ejsmgrants-recipients-2013.pdf (accessed December 11, 2014). 7. Congressional Budget Office, “An Update to the Budget and Economic Outlook: 2016 to 2026,” August 23, 2016, https://www.cbo.gov/publication/51908 (accessed February 1, 2017). 8. Consolidated Appropriations Act, 2016, H.R. 2029. 9. National Endowment for the Humanities, Annual Report 2015, https://www.neh.gov/files/neh_2015_annual_report_final.pdf (accessed December 4,2016) 10. Giving USA, “Giving USA: 2015 Was America’s Most Generous Year Ever,” June 13, 2016, https://givingusa.org/giving-usa-2016/ (accessed March 7, 2017). 11. Congressional Budget Office, “An Update to the Budget and Economic Outlook: 2016 to 2026.” 12. National Endowment for the Arts, 2015 Annual Report, https://www.arts.gov/sites/default/files/2015%20Annual%20Report.pdf (accessed .(December 4, 2016 13. Consolidated Appropriations Act, 2016, H.R. 2029. 14. Giving USA, “Giving USA: 2015 Was America’s Most Generous Year Ever.” 15. “The National Endowment for the Arts Funds Political Propaganda,” The Federalist, February 23, 2016, http://thefederalist.com/2016/02/23/ the-national-endowment-of-the-arts-funds-political-propaganda/ (accessed December 5, 2016). 16. Citizens Against Government Waste, “Prime Cuts Summary,” 2015, http://cagw.org/sites/default/files/PrimeCuts2015.pdf (accessed January 11, 2016). 17. Consolidated Appropriations Act, 2016, H.R. 2029. 18. “Plan for Possible Lapse in Federal Appropriations,” August, 2015, https://www.wilsoncenter.org/sites/default/files/wilson_center_plan_for_ possible_lapse_in_federal_appropriation_revised_august_2015.pdf (accessed, December 6, 2016). 19. Daren Bakst, “Statement Regarding Proposed Ozone Standards,” testimony before the Environmental Protection Agency, January 29, 2015, http://www.scribd.com/doc/255666438/Bakst-Testimony-Ozone-Standards (accessed November 17, 2015). 20. Katie Tubb and Nicholas D. Loris, “The Federal Lands Freedom Act: Empowering States to Control Their Own Energy Futures,” Heritage Foundation Backgrounder No. 2992, February 18, 2015, http://www.heritage.org/research/reports/2015/02/the-federal-lands-freedom-act- empowering-states-to-control-their-own-energy-futures. 21. Congressional Budget Office, “An Update to the Budget and Economic Outlook: 2016 to 2026.” 22. “Kennedy Center Plan for Federal Government Shutdown,” September 23, 2013, http://www.kennedy-center.org/legal/130927_fed_govt_ shutdown.pdf (accessed December 6, 2016). 23. Consolidated Appropriations Act, 2016, H.R. 2029. 24. Michael Gaynor, “How to see Hamilton in DC,” The Washingtonian, July 7 2017, https://www.washingtonian.com/2016/07/07/hamilton- tickets-kennedy-center-how-to-see-hamilton-in-dc/ (accessed December 7, 2016). 25. Giving USA, “Giving USA: 2015 Was America’s Most Generous Year Ever.”

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 113

Labor, Health and Human Services, Education, and Related Agencies 116 projections. spending baseline 2016 recent August to most CBO’s according the 2018 FY for projected as authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ ADDITIONAL READING any would operate like (NPR) Radio National Public and (PBS) Service Broadcasting Public the such as CPB, the services from Without funding federal Radio. Public to allocated $100 million almost and Television, Public to allocated was million $300 2016.ations FY in appropri federal in million CPBThe received $485 broadcasting have greatly increased. for news and the sources accessing inception, media corporation’s the since grown has technology As options. broadcasting households limited very faced 1967,In when at created U.S. atime CPB the was RATIONALE 2018. FY in million (CPB). for Corporation for the Broadcasting Public saves $486 funding proposal federal This Eliminate RECOMMENDATION Privatize theCorporation forPublicBroadcasting Ȗ Ȗ Ȗ Ȗ Ȗ Ȗ June 30, 2014 and 2013,” October 30, 2014. 30, October 2013,” and 2014 30, June Years Ended Report Auditor’s Independent and Statements Financial “Consolidated Subsidiaries, and Service Broadcasting Public 7, 2014. January Service, Research Congressional Issues,” and Funding Federal Broadcasting: Public for Corporation “The Gurevitz, Mark and McLoughlin J. Glenn 2012. 14, October Signal, Daily Go,” to The Need Subsidies Bird’s Big Federal “Why Goff, Emily 2013. 11, September Budget,” Operating 2014 FY “Proposed Broadcasting, Public for Corporation Corporation for Public Broadcasting, “About CPB: Financial Information.” 2005. 25, CATO July Institute, Broadcasting,” to “Top Ten Privatize Public David Boaz, Reasons 2 Of those appropriations, those Of nearly 1 The Heritage Foundation | Foundation Heritage The 3

- new sponsors, create new shows, and find alterna new new sponsors, create find shows, and should no be PBS exception. should and find NPR Public broadcasters fluctuations. market to reacting and by creative being funding federal out receiving with in business stay to nonprofitsMany manage governments. local and state, federal, from funding it that receives only 5percent states of overall its porate sponsors, foundations, members. and NPR revenues cor by from increasing lostthe funding up make could seek to sector. organizations Both private the in source other news or broadcasting taxpayer funding. generate to ways tive receiving without viewership heritage.org - - - 4

Labor, Health and Human Services, Education, and Related Agencies

Eliminate Job Corps RECOMMENDATION Eliminate Job Corps. This proposal saves $1.755 billion in FY 2018.

RATIONALE The National Job Corps Study, a randomized exper- ȖȖ Employed Job Corps participants earned iment—the “gold standard” of scientific research— only $0.22 more in hourly wages compared to assessed the impact of Job Corps on participants employed control group members. compared to similar individuals who did not participate in the program. For a federal taxpayer invest- If Job Corps actually improved the skills of its par- ment of $25,000 per Job Corps participant, the ticipants, it should have raised their hourly wages study found that: substantially. A paltry $0.22 increase in hourly wages suggests that Job Corps does little to boost ȖȖ Compared to non-participants, Job Corps the job skills of participants. participants were less likely to earn a high school diploma (7.5 percent versus 5.3 percent); A cost-benefit analysis based on the National Job ȖȖ Compared to non-participants, Job Corps Corps Study found that the benefits of the Job Corps participants were no more likely to attend or do not outweigh the cost of the program. Job Corps complete college; does not provide the skills and training to sub- ȖȖ Four years after participating in the evaluation, stantially raise the wages of participants. Costing the average weekly earnings of Job Corps $25,000 per participant over an average participa- participants were a mere $22 higher than the tion period of eight months, the program is a waste average weekly earnings of the control group; and of taxpayer dollars.

ADDITIONAL READING ȖȖ David B. Muhlhausen, “Do Federal Social Programs Work?” Heritage Foundation Backgrounder No. 2884, March 19, 2014. ȖȖ David B. Muhlhausen, “Job Corps: An Unfailing Record of Failure,” Heritage Foundation WebMemo No. 2423, May 5, 2009.

CALCULATIONS Savings are expressed as budget authority as projected for FY 2018 in the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 117 118 group, on average, of full-WIA the earnings the quarter, members. core group the fifth the In than earnings different have statistically to failed group follow-upthe members period, of full-WIA the of thequarters five find employment.and During plot to careers their for tools participants online and information offered which mostly services, core plus job assistance) training—to job-search workshops, assessments, and (skills sive services services—inten WIA” of “full comparison the is of WIA’s the test effectiveness most important The Worker Dislocated and Adult the programs. of employment offered by services types the alter authorizationthe of WIOA the not did substantially today, because policymakers relevant to highly are findings The results. decades-long trend of dismal continue 15-month a The findings er programs. andDislocated Adult WorkWIA effectiveness of the assessed Evaluation Gold Standard WIA The completion. report’s months of a two within reports ofpolicy releasing months-long despite Labor’s delay official occurred and timing Mayin 2016. Thepeculiar been finalized However,Evaluation. already had was report the Gold Standard Workforce Investment (WIA) Act the of 1998 publicly 15-month released findings of Labor House, Department U.S. the White the going move on to were who into was focused icans Day Election On of November 2016, 8, Amer while failure. consistently find ment, studies these of assign random “gold the tions using standard” rigorous evalua on scientifically these Based tive. ineffec are programs these that indicates strongly published 1990 since programs job-training federal of evaluation multisite experimental every from The evidence programs. job-training ineffective ing of operat ahistory of has Labor Department The RATIONALE 2018. saves FY $3.424 proposal in billion This grants. youth job-training 2014 the Act’s (WIOA’s) WorkforceEliminate Opportunity Innovation and dislocated-worker, adult, and RECOMMENDATION Job-TrainingAct Programs Eliminate Workforce Innovation andOpportunity 5 The Heritage Foundation | Foundation Heritage The ------A solid majority of 57 percent of full-WIA partici ofA solid 57 majority percent of full-WIA jobs. finding in them to provided resulted services not did the believe that participants Full-WIA no effect earnings. on had WIA full in employment participation services, other and receive one-on-one assistance, training, core group. in Despite more enroll being to likely of the earnings the from were indistinguishable job-training programs do not work. programs job-training federal that evidence suggesting abundant There is GAO report: a2009 to According fective. inef have been foundadults extraordinarily be to young targeting programs Federal job-training occupations. intended their percent 68 Thus, in find werejobs to ing. unable of train their found area the ipants occupations in partic 32 percent Only of full-WIA training. their find to employmentunable occupationsin relatedto were largely participants WIA full more important, employment. finding to Perhaps unrelated was them to provided services the believed that pants age regional strategies. regional age encour to and partnerships, strategic encourage to sectors, growing for services to enhance ified mod be could system workforce of the structure how current the understand to opportunity an missed Labor programs, grant discretionary its ly. adequately evaluate to Moreover, failing in and efficient work effectively system the making for whom and key works to what is Knowing best. approaches work employmentwhich training and understand helpto workers or policymakers consequently, and, not positioned is well priority a not research such made has Labor achieving. is [L]ittle system workforce the about what known is heritage.org 6 ------Labor, Health and Human Services, Education, and Related Agencies

ADDITIONAL READING ȖȖ David B. Muhlhausen, “Do Federal Social Programs Work?” Heritage Foundation Backgrounder No. 2884, March 19, 2014. ȖȖ U.S. Government Accountability Office, “Workforce Investment Act: Labor Has Made Progress in Addressing Areas of Concern, But More Focus Needed on Understanding What Works and What Doesn’t,” February 26, 2009. ȖȖ Sheena McConnell et al., Providing Public Workforce Services to Job Seekers: 15-Month Impact Findings on the WIA Adult and Dislocated Worker Programs (Washington, DC: Mathematica Policy Research, May 2016).

CALCULATIONS Savings are expressed as budget authority as projected for FY 2018 in the CBO’s most recent August 2016 budget baseline.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 119 120 projections. spending baseline 2016 recent August to most CBO’s according the 2018 FY percent) (–0.32 growth in spending discretionary rate as same at the decrease and 2017 FY in steady hold appropriations 2016 FY that assumes Heritage 2029), 346. p. (H.R. 2016 Act, Appropriations Consolidated the in 2016 FY for authorized as authority budget as expressed are Savings CALCULATIONS Ȗ ADDITIONAL READING Social and by Mathematica Policy Research TAA of evaluation the impact A 2012 quasi-experimental ineffective. highly be to have consistently found programs these grams pro job-training of federal rigorous evaluations scientifically because shoulding not surprising, be find This job on skills. newly based acquired ings improves earn training and assistance this that find no evidence of TAA the evaluations Program job prospects. unemployed on actively hurting workers’dollars should lost income. not Congress spend taxpayer in approximately $25,000 averagethe participant costs the in TAA Participating losses. financial these offset subsidies only partially federal their never lost income, and recover this participants Most have found they not had job been in training. for anewlooking work, or job in working they could could have been spent that job in able training time they spend consider aresult, As jobin training. encourages recipients participate to program The productionoverseas find costly. companies less workersAmerican whotheir whenlose jobs to efits ben government generous overly provides TAA The RATIONALE 2018. FY in million saves $858 proposal This expire. program (TAA) Adjustment Trade entire the Let Assistance RECOMMENDATION Let Trade Adjustment Assistance Expire Ȗ Ineffective and Wasteful ‘Job-Training’ Program,” Heritage Foundation Foundation and Heritage Wasteful ‘Job-Training’Program,” Ineffective an Expanding and Gimmicks Budget Act: Enhancement Assistance Gray, Adjustment “Trade John and Sherk, James Muhlhausen, David B. The Heritage Foundation | Foundation Heritage The - - - - - Issue Brief Issue in the program. The TAA failed a commonsense test acommonsense test failed TAA The program. the in more earn to likely are pants partici outcomes workers. TAA of displaced fact, In improves employment the notion TAA the that for support the empirical little there is Overall, participants. employment the at improving fective outcomes of inef be to have found TAA that the evaluations impact quasi-experimental previous of three sus upon consen the builds Associates Policy Research cies of these companies. bankrupt the do to with little competition having and despite Hostess foreign Solyndra benefitsto TAA award to Administration Obama the allowed This woes. firm’s the to financial or unrelated tal, coinciden often correlations are These loss of sales. afirm’s and foreign imports increasing between acorrelation showing only requires Department of competition.foreignlayoffsbecause LaborThe did that not experience firms and unions connected politically benefits to go often TAA Furthermore, costs. its than benefits produces more whether program the of determining heritage.org No. 4396, April 28, 2015. 28, April 4396, No. 7 less after participating - - - - - Labor, Health and Human Services, Education, and Related Agencies

Eliminate Susan Harwood Training Grants RECOMMENDATION Eliminate Susan Harwood Training Grants. This proposal saves $11 million in FY 2018.

RATIONALE The Department of Labor has a history of operat- report that relies solely on the number of people ing ineffective job-training programs. The evidence trained to assess performance of the grant pro- from every multisite experimental evaluation of gram.8 The number of people trained provides no federal job-training programs published since 1990 information for determining whether trainees strongly indicates that these programs are ineffec- learned anything new to make workplaces safer. tive. Based on these scientifically rigorous evaluations using the “gold standard” of random assign- Measuring the number of people trained does not ment, these studies consistently find failure. measure program “impact.” Instead, it measures an output. Program impact is assessed by com- Since 1978, the Occupational Safety and Health paring outcomes for program participants with Administration (OSHA) has provided Harwood estimates of what the outcomes would have been grants to nonprofit organizations to provide safety had the participants not partaken in the program. training to workers. Despite existing for decades, Without a valid comparison, performance monitor- OSHA does not have any credible evidence that ing based on “outputs,” such as number of people these training grants are effective. Case in point trained, cannot provide valid estimates of pro- is the FY 2015 Department of Labor performance gram effectiveness.

CALCULATIONS Savings are expressed as the budget authority authorized for FY 2016 and found in the Consolidated Appropriations Act, 2016, Public Law 114–113, p. 353. Heritage assumes that the FY 2016 level of $10.537 million remains constant in FY 2017 and decreases at the same rate as discretionary spending (–0.32 percent) in FY 2018 according to the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 121 122 baseline. budget 2016 recent August most CBO’s the in 2018 FY for projected as authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ Ȗ ADDITIONAL READING imprudently. money their using is CNCS the they think if dollars tax their withhold donors. accountable their be cannot to Taxpayers they do not have to means foring programs CNCS by government. the fund Moreover, guaranteed chosen charities particular subsidize to taxpayers forces and choice individuals away from this takes CNCS The how give. and much to give, they want to they want charities which to money charities, to and time their give to they want if choose to free should be choice Americans and individual an is volunteering. time spent cent per donated 44 money and charity, to Americans dation Foun Aid Charities the to According time. their volunteer and charity to give already Americans sector. government this in eral intervene to United but States, it not is proper the role of fed the prosperous and astrong to critical is society Civil donations, public-privatein-kind and partnerships. dollars, by federal funded are programs These programs. other public-service-oriented as well (4) the and Fund, Volunteer Generation Fund—as (2)iCorps, (3) Senior Innovation Corps, Social the Amer programs—(1) operates CNCS The four main institutions. society civil support and public service promote to aims agency that afederal is CNCS The RATIONALE 2018. FY in saves $1.164 (CNCS). proposal billion This Service Corporation for the Community National and Eliminate RECOMMENDATION and CommunityService Eliminate theCorporationforNational Ȗ Ȗ Ȗ Backgrounder Foundation Heritage Programs,” Government Bad by Eliminating Billion Save $42 Can Congress Budget? “Tight Knudsen, Patrick 2016. 14, June 2016–Highlights,” USA “Giving USA, Giving Foundation Heritage Citizen for Service,” Reforms and “Principles Spalding, Matthew World Index Giving 9 No. 2837, August 29, 2013. 29, 2837, No. August , in 2016,, in percent 63 of 10 Charitable giving giving Charitable The Heritage Foundation | Foundation Heritage The - - - - - to those in need creates feelings of fulfillment. feelings need creates in those to service genuine when valuable is Volunteering pants. for partici insurance provides stipends and Corps eligible for benefits. federal are and care health and astipend given for living are participants projects. Full-time locations and assigned are and members join programs oneAmeriCorps of three the of public service. meaning and value the warps also society civil support to dollars Using taxpayer charitable organizations receive their funds. receive their organizations charitable donations—the private other way that same through operations their maintain to opportunity have the money, and of will time their worthy charities those deem Americans that services charitable valuable included provide CNCS the in hand-picked charities the If for should CNCS the eliminated. be Funding of community. the needs the to attuned more are programs run locally and state-run that desired impact. the were having not properly grants their if tell agency the could aresult, As of organization. the the not did goals reflect measures performance able. 2010 In agency’s found the a GAO that report is question effectiveness The of CNCS programs citizens. fellow their than rather ernment gov the serve environment where participants an creates serve volunteers how decide and volunteers government pay to federal CNCS the the foring use heritage.org Backgrounder 13 In a separate study, aseparate In found CBO the No. 1642, April 1, 2003. 1, April 1642, No.

11 14 Senior Senior 12 Hav - - - - Labor, Health and Human Services, Education, and Related Agencies

Bring National Labor Relations Board Funding in Line with Caseloads

RECOMMENDATION Bring funding for the National Labor Relations Board (NLRB) in line with its caseloads, reducing spending by roughly 50 percent. This proposal saves $147 million in FY 2018.

RATIONALE The NLRB, under the National Labor Relations Act, FY 1990. Despite this lower workload, the NLRB’s regulates private-sector union elections and collec- inflation-adjusted budget has increased by one- tive bargaining, except for unions in the railway and sixth since 1990. Reducing the NLRB budget by 50 airline industries regulated by other law. The NLRB percent in FY 2018 would bring its spending in line conducts union certification and decertification with the previous funding levels for its caseload. elections, investigates unfair labor practices, and This would save taxpayers $147 million in FY 2018. adjudicates cases with administrative law judges. In FY 2018, its projected budget authority is $293 Private-sector union membership and organizing million, even though unfair-labor-practice com- has dropped considerably over the past 25 years. plaints have fallen by 40 percent since FY 1990, Consequently, the NLRB caseload has fallen con- and election petitions have fallen by an even larg- siderably as well. The NLRB received 65 percent er amount. A proportional reduction of 50 per- fewer election petitions and 40 percent fewer cent would bring the NLRB’s FY 2018 spending to unfair labor practice charges in FY 2014 than in $147 million.

CALCULATIONS Savings are based on reducing the CBO’s projections for NLRB appropriations in FY 2018 by 50 percent. NLRB spending is estimated at $293 million in FY 2018, according to the CBO’s most recent August 2016 baseline spending projections. A 50 percent reduction equals $147 million.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 123 124 level. 2018 FY projected of the percent 10 equal Savings projections. spending baseline 2016 recent August to most CBO’s according the 2018, percent) (–0.32 FY in spending discretionary rate as same at the decreases and 2017 FY in steady level holds 2016 FY the that assumes Heritage 373. p. 114–113, Law Public 2016, Act, Appropriations Consolidated the in found as billion level of $9.168 funding authorized 2016 FY the on based authority, budget as expressed are Savings CALCULATIONS Ȗ Ȗ Ȗ ADDITIONAL READING should not Low-income families of participants. practices or parenting health, well-being, tional social-emo skills, noonto impact cognitive the little had It found Head that Start program. the in participating children 5,000 uation of more than rigorous eval ascientifically released Head Start, administers agency the that Services, Human and of Health Department December the In 2012, lies. low-income from for children ten readiness fami kindergar mission ofup improving stated its to live to failed has program Head federal Start the governmentof federal the under Constitution, the afunction as additionIn questionable its to status RATIONALE 2027. in 2018. saves $914 FY proposal in sunsetted is This million program the until thereafter 10 by 10 additional percent for 2018 percent year by an FY Head every and in Start Reduce funding RECOMMENDATION and LocalAlternatives Sunset Head StarttoMake Way forBetter State Ȗ Ȗ Ȗ David B. Muhlhausen, “Head Start Program: Fraudulent and Ineffective,” Heritage Foundation Foundation Heritage Ineffective,” and Fraudulent Program: Start “Head Muhlhausen, David B. Foundation Heritage Program,” Education Childhood Early Failed Federal Another Demonstration: CARES Start Head “The Muhlhausen, David B. 2013. 10, January 3823, No. Foundation Heritage Released,” Finally Report Evaluation Impact Start “Head Muhlhausen, David B. and Burke M. Lindsey Backgrounder No. 3040, August 6, 2015. 6, August 3040, No. The Heritage Foundation | Foundation Heritage The - - - - come families. To begin phasing out the program, out program, the phasing To begin come families. for low-in day care subsidize to funding state al addition provide to need they whether determine to adequate time with provide states provision will over sunset The of aperiod 10 program years. Start Head federal the should sunset Congress such, As school programs. pre federal ineffective dependhave to on distant, completely out by phased 2027. would 2018. be percent Ultimately, FY in Head Start by 10 funding should reduce HeadCongress Start heritage.org WebMemo No. 2919, May 28, 2010. May 28, 2919, No. Issue Brief Issue

- - - Labor, Health and Human Services, Education, and Related Agencies

Eliminate Competitive and Project Grant Programs and Reduce Spending on Formula Grants

RECOMMENDATION Eliminate competitive and project grant programs that fall under the Every Student Succeeds Act (ESSA).15 At the same time, reduce spending on formula grant programs managed by the Department of Education by 10 percent.

Eliminating competitive grant programs under ESSA saves $1.470 billion in FY 2018.16 Reducing formula grant program spending by 10 percent saves $2.208 billion in FY 2018. Combined, this proposal saves $3.678 billion in FY 2018.

RATIONALE If the federal government is going to continue Since the 1970s, inflation-adjusted per pupil feder- spending money on this quintessentially state and al education spending has nearly tripled. Spending local function, federal policymakers should limit increases reflect the number of federal education and better target education spending by stream- programs that have amassed over the decades. lining the existing labyrinth of federal education ESSA—just one federal education law—authorizes programs. Federal competitive grant programs dozens of competitive and formula grant programs, authorized under the Elementary and Secondary many of which are redundant and ineffective. The Education Act (ESEA) should be eliminated, as they numerous federal education programs have not only are duplicative and ineffective, and federal spend- failed to improve K–12 education nationally, but ing should be reduced to reflect remaining formula have levied a tremendous bureaucratic compliance programs authorized under Title I of the ESEA and burden on states and local school districts. In order the handful of other programs that do not fall under to stop the federal education spending spree, and the competitive/project grant category. Remaining to ensure that state and local school leaders’ focus programs managed by the Department of Educa- is oriented toward meeting the needs of students tion, such as large formula grant programs for K–12 and parents—not toward satisfying federal bureau- education, should be reduced by 10 percent. crats—program count and associated federal spending should be curtailed.

ADDITIONAL READING ȖȖ Lindsey M. Burke, “How the A-PLUS Act Can Rein in the Government’s Education Power Grab,” Heritage Foundation Backgrounder No. 2858, November 14, 2013. ȖȖ Lindsey M. Burke, “Reducing the Federal Footprint on Education and Empowering State and Local Leaders,” Heritage Foundation Backgrounder No. 2565, June 2, 2011.

CALCULATIONS Savings are based on reported FY 2016 grant levels under both the ESSA and the American Recovery and Reinvestment Act of 2009, as reported in U.S. Department of Education, “Fiscal Year 2016 Congressional Action,” January 11, 2016, pp. 1–6. The FY 2016 authorized levels of $1.475 billion for competitive grants, and $22.149 billion for formula grants, are assumed to hold steady in FY 2017 and decrease at the same rate as discretionary spending (–0.32 percent) in FY 2018, according to the CBO’s most recent August 2016 baseline spending projections. Estimated savings of $3.678 billion equal the entirety of FY 2018 spending ($1.470 billion) on competitive grants, and 10 percent of spending on formula grants ($2.208 billion).

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 125 126 projections. spending baseline 2016 recent August most CBO’s the on based authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ Ȗ ADDITIONAL READING the violated has department the Furthermore, on biology but gender on self-declared identity. not students to based programs sports and dorms, facilities, intimate to access require law to the ing rewrit essentially of enforcing Title IX, purposes “gender mean to “sex” forby interpreting identity” power its abused has department the recent years, In laws. rights educationto enforcing civil and access equal ensuring with (OCR) tasked is Rights of Education Department The Office forCivil RATIONALE 2018. FY in million saves This budgetRights $57 50 by percent. of EducationReduce Department the Office forCivil RECOMMENDATION forCivil Rights Office Reduce Funding fortheDepartmentofEducation Ȗ Ȗ Ȗ May 23, 2016. May 23, Signal, Daily Directive,” The Bathroom Obama’s Fight Should Lawmakers Ways Conservative “3 Severino, Roger and T.Ryan Anderson 2016. May 13, Signal, Daily The Nation’s on Schools,” Policy Transgender RewritesLaw, Unilaterally Imposes “Obama T.Ryan Anderson, 2015. 6, October Foundation Heritage Courts,” Trial: on the from Update An Judiciaries “Campus Harris, Samantha The Heritage Foundation | Foundation Heritage The 17

- that will best serve all members of communi their all serve best will that policies able being make from to prevent Americans icies. of law and OCR’s rule the undermine actions pol they do not one-size-fits-all if these to ing cave loss fund the of federal with threatened are Schools to defend accused the for themselves. ly difficult it exceeding making and or assault, harassment al low burden of of sexu proof for adjudicating claims unfairly an principles of due by requiring process ties. Its budget should be significantly cut. Itsties. budget should significantly be heritage.org Legal Memorandum No. 165, 165, No. 18

- - - - - Labor, Health and Human Services, Education, and Related Agencies

Eliminate Redundant Department of Labor Agencies RECOMMENDATION Eliminate the Office of Federal Contract Compliance and the Women’s Bureau in the Department of Labor. Eliminate all grant-making by the International Labor Affairs Bureau (ILAB). This proposal saves $171 million in FY 2018.

RATIONALE Several Labor Department agencies serve little pub- The Women’s Bureau in the Department of Labor lic purpose, or perform duties that are redundant examines challenges facing women in the work- with other federal agencies. force. It was created in 1920 when few women worked outside the home. Today, women make up In 1965, President Johnson signed Executive Order half of the workforce. The challenges facing female No. 11246, which prohibited federal contractors employees are the challenges facing workers as a from engaging in racial discrimination. At the time, whole. The Women’s Bureau has become obsolete. the Civil Rights Act did not have strong enforcement provisions. The Office of Federal Contract The ILAB monitors foreign compliance with labor Compliance Programs (OFCCP) within the Depart- obligations under trade treaties. It also hands out ment of Labor now enforces these provisions. grants to unions and aid organizations to promote However, the Equal Employment Opportunity Act the welfare of foreign workers. The effectiveness of 1972 gave the Equal Employment Opportunity of these grants is unclear and a poor use of U.S. Commission (EEOC) strong enforcement powers. taxpayer dollars in times of tight budgets. Congress Discrimination is currently illegal for all employ- should eliminate ILAB funding for grant-making ers—federal contractors or not—and the EEOC and restore it to its core purpose of monitoring polices these policies. A separate agency for federal treaty compliance. contractors is redundant and a poor use of tax dollars, thus the OFCCP should be abolished.

CALCULATIONS Savings are expressed as budget authority. Estimated FY 2018 budget authority of $112 million for the Office of Federal Contract Compliance comes from the CBO’s most recent August 2016 baseline spending projections. Estimated FY 2018 appropriations for the ILAB comes from the FY 2016 appropriated level of $59.8 million as found in the Consolidated Appropriations Act, 2016, Public Law 114–113, p. 354. Estimated FY 2018 spending for the Women’s Bureau comes from the FY 2016 enacted level of $11.5 million as found in the Department of Labor’s FY 2017 Budget Justification, p. DM-8. Heritage assumes that these FY 2016 appropriated levels hold constant in FY 2017 and decrease at the same rate as discretionary spending growth (–0.32 percent) in FY 2018 according to the CBO’s most recent August 2016 baseline spending projections. The estimated savings include elimination of the Office of Federal Contract Compliance and the Women’s Bureau Secretary as well as an 80 percent reduction in the ILAB’s budget, based on then–Secretary of Labor Elaine Chao’s suggested cut, by eliminating ILAB’s grant-making activities in her FY 2009 budget request.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 127 128 projections. spending baseline 2016 recent August to most CBO’s according the 2018 percent) (–0.32 growth FY in spending discretionary rate as same at the decrease and 2017 FY in steady hold appropriations 2016 FY that assumes Heritage 128. p. 114–113, Law Public 2016, Act, Appropriations Consolidated the in found as level of $227.8 million spending enacted 2016 FY the by using were calculated and authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING librarian funds which Program, Librarian Century 21st Bush Laura the such as grants, smaller isters of Columbia. District the and states all across funding federal disperse to la apopulation formu uses which program, States to Agencies. Administrative Library State through administered grants state agency.the supports Most funding 2016, appropriated $227.8 Congress for million In museums. and libraries to funds federal isters admin that agency independent an is IMLS The RATIONALE 2018. FY in million would save proposal $227 This (IMLS). Services Library of Museum and for Institute the funding Eliminate RECOMMENDATION and LibraryServices Eliminate Funding fortheInstitute ofMuseum Ȗ Ȗ Backgrounder Foundation Heritage Programs,” Government Bad by Eliminating Billion Save $42 Can Congress Budget? “Tight Knudsen, Patrick Foundation Heritage Independence,” State Fiscal and Funds “Federal Sven Larsen, 19 The largest grants are from the Grants Grants the from are grants largest The No. 2837, August 29, 2013. 29, 2837,No. August 20 The agency also admin agency The also The Heritage Foundation | Foundation Heritage The - - - and local level. government federal The local shouldand at state the funded being already are institutions when museums these and libraries to grants give to It not is proper the role government of federal the various museums. as well as libraries, tribal and special supports also IMLS The use. for library research STEM support workforce development, which STEMeX grants, and back localities. to states and decisions fordevolve institutions these funding heritage.org Backgrounder No. 2136, May 15, 2008. May 15, 2136, No.

Labor, Health and Human Services, Education, and Related Agencies

Redirect Funding from Planned Parenthood to Health Centers Not Entangled with Abortion Services RECOMMENDATION Redirect funding from Planned Parenthood to health centers that provide comprehensive health care for women. This proposal has no savings in FY 2018.

RATIONALE Taxpayer money should not be used to fund elective disqualifying Planned Parenthood affiliates and abortion providers, such as the Planned Parenthood other abortion providers from receiving Title X Federation of America (PPFA) and its affiliates. The family planning grants, Medicaid reimbursements, need to end such funding has become even more Zika-related funding, and other grants and con- acute in light of serious and disturbing press cover- tracts would not reduce the overall funding for age of PPFA representatives discussing the sale of women’s health care: The funds currently flowing body parts of aborted infants. to Planned Parenthood affiliates and other abortion providers would be shifted to programs that offer No federal funds should go to the Planned Parent- comprehensive health care without entanglement hood Federation of America or any of its affiliates in abortion on demand. or health centers. Under the recommendation,

ADDITIONAL READING ȖȖ Sarah Torre, “Congress Should End Federal Funding to Planned Parenthood and Redirect It Toward Other Health Care Options,” Heritage Foundation Issue Brief No. 4462, September 22, 2015. ȖȖ Roger Severino and James Bryan Hall, “Distangling the Data on Planned Parenthood Affiliates’ Abortion Services and Receipt of Taxpayer Funding,” Heritage Foundation Issue Brief No. 4467, September 30, 2015.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 129 130 included outcome, language has such an Congress from To taxpayers protect of program. the shortfall responsible funding for potential any taxpayers budget leaving be neutral, for program the funding However,kets. that provision the not does specify mar small-group and individual the in plans health qualified selling andinsurers profitslosses of the (from 2014risk-corridor program 2016) to limit to operate to atemporary Services Human and Health of Secretary the of 1342 ACA the Section directed RATIONALE 2018. FY in savings Act’s (ACA’s)no has Care proposal Affordable the This Continue restrict to funding. risk-corridor program RECOMMENDATION Program Funding Continue toRestrict theACA Risk-Corridor The Heritage Foundation | Foundation Heritage The - protect taxpayers. protect order provisionget-neutrality in continue to to risk-corridor the program’s bud should maintain 2014 2015. in billion in billion $5.8 and of $2.5 shortfall afunding faced ridor program risk-cor the as billion $8.3 saved taxpayers tion has insurers. participating from come only for risk-corridor the program funding that require appropriations to bills annual the in heritage.org 21 This funding restric 22 Congress Congress - - - Labor, Health and Human Services, Education, and Related Agencies

Direct the Department of Education to Rescind the “Gainful Employment” Regulations Promulgated on For-Profit Higher Education Institutions RECOMMENDATION Direct the Department of Education to rescind the “gainful employment” regulations promulgated on for- profit higher education institutions. This proposal has no savings in FY 2018.

RATIONALE The Higher Education Act stipulates that in order to for non-traditional students in particular, who may be eligible for federal student aid, colleges must pre- choose a for-profit institution because of its flexi- pare students for “gainful employment in a recog- bility and affordability. The Trump Administration nized occupation.” The U.S. Department of Educa- should enable private for-profit and vocational col- tion has aggressively promulgated rules concerning leges to continue to serve students who have been gainful employment during the Obama Administra- historically underserved by traditional universities tion, and on July 1, 2015, gainful employment reg- by repealing the gainful employment regulations ulations primarily affecting for-profit institutions that took effect on July 1, 2015. went into effect. The rule could limit opportunities

ADDITIONAL READING ȖȖ Lindsey M. Burke, “Reauthorizing the Higher Education Act—Toward Policies that Increase Access and Lower Costs,” Heritage Foundation Backgrounder No. 2941, August 19, 2014.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 131 132 Ȗ ADDITIONAL READING abortions.” for refer or of, pay “provide, to for, decline that provide coverage plans care entities, health including care health against discriminating from funds federal certain governments receive that local and state, federal, Weldon the 2004, Since prohibited Amendment has dicated in court. vin be violations to victim-of-conscience allow also shouldor provide coverage Congress for abortions. pay they do not for, because perform, plans refer, insurance health and providers, organizations, care health against moneyfederal discriminate that with funded government agencies programs and prohibitions on should codify addition, Congress or In U.S. whether abroad. the of in abortion, cacy coverage, provision, the or advo with entangled being from prevent ridersicy that funding federal pol pro-life existing all should maintain Congress RATIONALE 2018. FY in no savings has proposal This care. of conscience freedom health in Protect RECOMMENDATION Protect Freedom ofConscienceinHealth Care Ȗ Backgrounder Foundation Coverage,” Heritage Taxpayers Abortion and to Elective Fund Individuals Forcing Loopholes: Many Torre, “Obamacare’s Sarah No. 2872, January 13, 2014. 13, January 2872, No. 23 Enforcement of the The Heritage Foundation | Foundation Heritage The - - - organizations, religious schools—even churches. religious organizations, offered religious by plans those including abortions, include state the coverage in of elective plan health every almost that mandated California in Care Health 2014, of Managed August In Department the relief urgent. to path is abetter provide victims and conscience these protections codify need to The such complaints. at all—on quickly—if of record moving apoor track has which Services, andHuman of Health the Department in of officials conscience policy, however, discretion the to left is erage that aligns with his values. his with aligns erage that cov insurance andhealth care or find, offerhealth provide, to American of every freedom the tecting fornot on conscience more wait assaults before pro of investigation. years two after nearly Rights by Office the forCivil dismissed about state’s the were HHS to Complaints mandate heritage.org 25 Policymakers should should Policymakers 24 - - Labor, Health and Human Services, Education, and Related Agencies

Stipulate the Use of Fair-Value Accounting RECOMMENDATION Stipulate the use of fair-value accounting. This proposal has no savings in FY 2018.

RATIONALE In order for taxpayers to have a clear understand- using non-subsidizing interest rates, which they ing of the costs of federal higher education subsi- should use so that the loans can break even. Absent dies, policymakers should direct the Department of fair-value accounting, it is impossible to know the Education to use fair-value accounting. Fair-value extent to which student loan programs are provid- accounting estimates take market risk into account, ing a subsidy to borrowers. Congress should require and are a better reflection of the true costs of fed- the Department of Education to use fair-value eral higher education subsidies for student loans. accounting estimates calculated by the CBO and Without the use of fair-value accounting, it is dif- adjust loan rates accordingly, on a yearly basis. ficult to know whether federal loan programs are ADDITIONAL READING ȖȖ Lindsey M. Burke, “Federal Student Loans Cost Taxpayers Money,” The Daily Signal, June 24, 2013. ȖȖ Lindsey M. Burke, “Student Loan Servicing: The Borrower’s Experience,” testimony before the Subcommittee on Financial Institutions and Consumer Protection, Banking, Housing, and Urban Affairs Committee, U.S. Senate, June 4, 2014.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 133 134 Ȗ ADDITIONAL READING contribute to Revenue families allow nal to Code another (K–12). 529 section of Inter the Expanding education) over (higher form of education savings one to advantages government tax federal gives question why might the Parents penalties. tax al feder incurring without money tax-free, grow to allows account, a529 college as savings known tive, incen This other educationand higher expenses. for college saving tuition for families advantages government provides tax federal The currently RATIONALE 2018. FY for thereforeandsavings have impactestimated no revenues,no spending, on will affect it will this Although Under Expenses Plans. College K–12529 Savings Allow Qualified as Education Costs RECOMMENDATION Under 529College Savings Plans Allow K–12 EducationCosts asQualifiedExpenses Ȗ Foundation Foundation Heritage to Promote Policies Family March: Investment,” Choice Education K–12 School the “Continuing Sheffield, Rachel and Burke M. Lindsey Backgrounder No. 2683, April 25, 2012. 25, April 2683, No. The Heritage Foundation | Foundation Heritage The - - - term goals for reforming the federal tax code. tax federal the for reforming goals term choice, educational long- consistent with expand school choice. outcome Such an would significantly law could have major implications for tax federal to change relatively small public This school system. pay to for education ability their options outside the K–12 increasing education-related while expenses would provide new incentives for save to for parents money for 529 to K–12 plans expenses educational heritage.org Labor, Health and Human Services, Education, and Related Agencies

Halt Implementation of the Union- Persuader Regulations

RECOMMENDATION Halt implementation of the union-persuader regulations. This proposal will have no savings in FY 2018.

RATIONALE The Office of Labor-Management Standards to which the American Bar Association holds its (OLMS) is considering regulations requiring almost members. These regulations would discourage all lawyers who consult with companies during lawyers from providing legal advice to companies union-organizing drives to file detailed finan- during union-organizing battles, and increase the cial-disclosure forms. These forms would require likelihood that businesses conduct unfair labor listing all clients and detailing the substance of practices. Congress should deny funding for OLMS communications with them. This disclosure vio- promulgation as well as for enforcement of these lates the attorney-client confidentiality standards new “persuader” regulations.26

ADDITIONAL READING ȖȖ John G. Malcolm, “Labor Departments’ Persuader Rule Undermines Employers’ Rights and Threatens the Attorney-Client Relationship,” Heritage Foundation Backgrounder No. 2838, August 26, 2013. ȖȖ James Sherk, “Proposed Union Rules Harm Workers and Job Creation,” Heritage Foundation Backgrounder No. 2584, July 20, 2011.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 135 136 Ȗ ADDITIONAL READING oftities workers on would injured job the and iden the could lead revealing to disclosure This employers the incidents and identifying by name. at major occur employers, that place injuries proposed publicly to work the report has OSHA RATIONALE 2018. FY in have no savings will proposal This regulations. recordkeeping (OSHA) of Labor’s Administration Department implementation the Health Halt and Safety of Occupational RECOMMENDATION Health Administration Recordkeeping Regulations Halt ImplementationofOccupationalSafety and Ȗ Vol. 79 (September 18, 2014), p. 56129. 2014), p. 18, Vol. 79(September Provisions,” Reporting and Update –NAICS Requirements Reporting and Recording Illness and Injury “Occupational OSHA, The Heritage Foundation | Foundation Heritage The - - recordkeeping regulations. promulgationfor OSHA or enforcement of these on-the-job should deny Congress injuries. funding reporting accurately from businesses discourage heritage.org Federal Register , Labor, Health and Human Services, Education, and Related Agencies

Halt Implementation of New Overtime Regulations RECOMMENDATION Halt implementation of new overtime regulations. This proposal will have no savings in FY 2018.

RATIONALE The Wage and Hour Division (WHD) of the Depart- of the rule’s higher costs, including cutting base ment of Labor has proposed requiring businesses salaries for their workforce and shifting employees to pay overtime rates to salaried employees who to hourly pay so as to leave total pay little changed. earn less than about $47,500 a year. Just over a If implemented, this rule would force employers to week before the rule was scheduled to go into effect log salaried employees’ hours. This would sharply on December 1, 2016, a federal U.S. District Court restrict many salaried employees’ ability to work Judge issued a nationwide, temporary injunction remotely because businesses have difficulty log- against the rule, stating that the Department of ging hours worked outside the office, and it would Labor overstepped its authority and ignored Con- reduce workers’ flexibility in hours, making it gress’ intent for the overtime rule. more difficult to juggle work and family life. If the rule overcomes legal challenges, Congress should Even before the rule was to go into effect, employ- deny funding for the WHD promulgation as well as ers were implementing changes to offset the impact enforcement of these new overtime regulations.27

ADDITIONAL READING ȖȖ James Sherk, “Overtime Regulations Will Hurt Workplace Flexibility, Not Raise Wages,” Heritage Foundation Commentary, July 10, 2015. ȖȖ James Sherk, “Salaried Overtime Requirements: Employers Will Offset Them with Lower Pay,” Heritage Foundation Backgrounder No. 3031, July 2, 2015. ȖȖ Rachel Greszler, “3 Ways Obama’s New Overtime Rule Will Hurt Employees,” The Daily Signal, August 26, 2016. ȖȖ Rachel Greszler, “How a Federal Judge’s Last-Minute Injunction Against the Overtime Rule Will Help Workers and Businesses,” The Daily Signal, November 23, 2016.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 137 138 Ȗ Ȗ ADDITIONAL READING employees. If franchisees’ and of contractors’ their joint brands employers franchised and contractors hire that most businesses makes conditions. This control over working “indirect” “unexercised,” and employment “potential,” when acompany has exists that joint to determine thatstandard redefined control over employee’s the direct NLRB work. The and exercised aunion—if immediate they both with jointly employed aworker—and bargain to had employers heldFor two that NLRB the decades, RATIONALE 2018.FY in have savings no Jointwill the using from Employer proposal This Stop Redefinition. NLRB the RECOMMENDATION Employer Redefinition Stop theNLRBfrom Using theJoint Ȗ Ȗ James Sherk, “How this New Government Ruling Destroys the Franchise Business Model,” The Daily Signal, August 28, 2015. 28, August Signal, Daily The Model,” Business Franchise the Destroys Ruling Government New this “How Sherk, James Awful,” Comprehensively Is Ruling NLRB The Burgers: “Beyond Sherk, James The Heritage Foundation | Foundation Heritage The standards. under new practices its labor joint-employerunfair any for prosecuting NLRB the to deny funding should Congress ownership. small-business to of akey access source eliminating stores, corporate with franchises owned respond by replacing locally control they need to actions, They will ing them. hir responsible for legally franchisees’ their are brands model. business corporate If franchise the gut will redefinition scrutiny, legal this it survives heritage.org National ReviewNational Online 28 , August 29, 2015. 29, , August - Labor, Health and Human Services, Education, and Related Agencies

Give Workers Time to Make an Informed Choice in Union Elections

RECOMMENDATION Give workers time to make an informed choice in union elections. This proposal will have no savings in FY 2018.

RATIONALE The NLRB recently implemented “ambush election” Congress should deny the NLRB funding for imple- rules, shortening the time for union elections from mentation of the “ambush election” regulations six weeks to roughly three weeks.29 Workers should and require the board to take at least five weeks have more than three weeks to consider argu- between the election petition and final vote, unless ments on both sides and make an informed choice. both the union and employer agree otherwise.30

ADDITIONAL READING ȖȖ James Sherk and Ryan O’Donnell, “Labor Union Snap Elections Deprive Employees of Informed Choice,” Heritage Foundation WebMemo No. 2371, March 31, 2009.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 139 140 Ȗ Ȗ ADDITIONAL READING election the in on new representation. union This No other vote workers to store were the allowed in employees at store. aMacy’s department fragrance electionunion exclusively cosmetics and the among job recently ordered For title. a NLRB example, the workers by organize to unions allowing ly begun recent has general manager. NLRB The same the hourly the workerssuch as of under direction the interest, composed of workers acommunity with Historically, unions organized bargaining units RATIONALE 2018. FY in have no savings will proposal This units. bargaining Stop gerrymandered RECOMMENDATION Stop Gerrymandered BargainingUnits Ȗ Ȗ James Sherk, “Proposed Union Rules Harm Workers and Job Creation,” Heritage Foundation Foundation Heritage Creation,” Job and Workers Harm Rules Union “Proposed Sherk, James 2011. 2, September Signal, Daily The Rights,” Workers’ on Attack Day with an Labor Heralds “NLRB Sherk, James The Heritage Foundation | Foundation Heritage The - ing to recognize micro-bargaining units. for practice labor employers of refus unfair charges or prosecute to units, micro-bargaining elections in hold to which with funding should deny NLRB the Congress workerschise who oppose unionizing. should not power have the selectively to disenfran nonetheless jobs. Unions affect it will astrike, calls unionthe benefits.If the outweigh of unionizing exclude to risks the units employeesing who think bargain gerrymander to unions allows standard heritage.org Backgrounder No. 2584, July 20, 2011. 20, July 2584, No. 31 - - - MANDATORY Labor, Health and Human Services, Education, and Related Agencies

Repeal the ACA’s Enhanced Federal Funding for the Medicaid Expansion

RECOMMENDATION Repeal the Affordable Care Act’s (ACA’s) enhanced federal funding for the Medicaid expansion. This proposal saves $102.436 billion in FY 2018.

RATIONALE The ACA provides the option for states to expand for the traditional Medicaid population, which Medicaid eligibility to all individuals earning consists of the disabled, elderly, children, and par- less than 138 percent of the federal poverty level. ents, the federal government reimburses states at The Congressional Budget Office projects that much lower levels, ranging from 50 percent to 75 the expansion increases Medicaid and Children’s percent.33 Repealing the ACA’s enhanced federal Health Insurance Program (CHIP) costs by $847 funding for the Medicaid expansion would end the billion between 2016 and 2025.32 For the expan- inequitable treatment among populations and end sion population, which consists mostly of childless, the incentive for states to divert limited taxpayer able-bodied adults, the federal government reim- resources from the most vulnerable populations. burses states at no less than 90 percent. However,

CALCULATIONS Savings are expressed as budget authority for FY 2018 and were estimated by staff at the Heritage Foundation using the Center for Data Analysis’s Health Model. All $102.436 billion in savings represents mandatory spending.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 141 142 spending. mandatory represents savings in billion $15.303 All Model. Health Analysis’s Data Center the for using Foundation Heritage at the by staff were estimated and 2018 FY for authority budget as expressed are Savings CALCULATIONS four into enrollees Medicaid should separate gress projected 77.5 hit 2024. is to in and million 2014, in million 64 to 2005, in enrollees million 46.3 from increasing surged, also enrollment has 2024. in annually billion $920.5 reaching over decade, next the even further increase to ed 2014, in billion project is $496.3 to and 2005, in $316 from risen billion has on spending Medicaid al annu Total cost. as well enrollment to as respect in path unsustainable on is an program Medicaid The RATIONALE 2018. FY in saves billion $15.303 proposal on spending budget. put Medicaid This by and federal population spending category Medicaid Disaggregate RECOMMENDATION on Budget Category andPutFederal Medicaid Spending Disaggregate Medicaid SpendingbyPopulation MANDATORY The Heritage Foundation | Foundation Heritage The 34 35 Average Average Con - - - financing arrangements to better meet the diverse the meetbetter to arrangements financing and differentallow policy and path fiscal dictable on would put spending amore Medicaid change pre This cap. spending federal aggregate an but within independently, category each finance should and and beneficiaries, (4)beneficiaries— long-termcare (2)adults, (3) disabled, the low-income Medicare able-bodied categories—(1) and children distinct billion in FY 2018. FY in billion would save proposal $15.3 of group. each This needs heritage.org - MANDATORY Labor, Health and Human Services, Education, and Related Agencies

End Provider Taxes in Medicaid RECOMMENDATION End Provider Taxes in Medicaid. This proposal saves $4.815 billion in FY 2018.

RATIONALE Some states employ provider tax schemes that limited to using no more than 6 percent of provider consist of increasing their Medicaid reimburse- tax revenues. Congress should either eliminate this ment rate for providers, but then “taxing back” a threshold altogether or drop the threshold further. portion of that increased payment. Because federal This policy would stop “state gaming” of Medicaid match rates are based on total payment amounts, financing, and bring greater transparency to the the effect of this state policy is increased federal financing of Medicaid. This proposal would save reimbursement beyond the level the state would $4.815 billion in FY 2018. receive absent the provider tax. Today, states are

CALCULATIONS Savings are expressed as budget authority for FY 2018 and were estimated by staff at the Heritage Foundation using the Center for Data Analysis’s Health Model. All $4.815 billion in savings represents mandatory spending.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 143 144 2018. FY in spending federal in savings generate will it not revenues, tax impact could proposal this Although CALCULATIONS ACA’s the applying income. than Rather percent 40 benefitfrom workers’taxable of this value the ing exclud by employer their through coverage receive benefitthosewho to tax unlimited provides an care treatment of employer-based tax health current other of forms employeeUnlike compensation, the RATIONALE 2018.FY in savings no has proposal This benefits. sponsored health ACA’s on acap employer- tax”—the plans—to on “Cadillac Convert the high-cost percent 40 excise tax RECOMMENDATION Sponsored Health Benefits Convert theCadillac Tax toaCaponEmployer- MANDATORY The Heritage Foundation | Foundation Heritage The - coverage, and discourage over-insurance. discourage and coverage, of cost employer-based care true the health expose other of forms employee with line in compensation, benefits care health would policy bring This basis. sheltered could be that amount the oncap apre-tax plans, on high-cost excise tax heritage.org 36 Congress should Congress MANDATORY Labor, Health and Human Services, Education, and Related Agencies

Unify Medicare Physician and Hospital Programs RECOMMENDATION Unify Medicare physician and hospital programs. This proposal would save $5.665 billion in FY 2018.

RATIONALE The Medicare program is divided into four pro- streamline Medicare’s cost sharing with one pre- grams: (1) Part A (hospitalization); (2) Part B (phy- mium, one deductible, uniform cost-sharing, and a sician services); (3) Part C (comprehensive private catastrophic limit. These changes would eliminate Medicare Advantage plans); and (4) Part D (pre- Medicare’s outdated structure by integrating both scription drug coverage). Congress should com- hospital and physician services and providing true bine Medicare Parts A and B into a single plan and insurance for catastrophic costs.

ADDITIONAL READING ȖȖ Robert E. Moffit and Rea S. Hederman Jr., “Medicare Savings: 5 Steps to a Down Payment on Structural Reform,” Heritage FoundationIssue Brief No. 3908, April 12, 2013.

CALCULATIONS Savings are expressed as budget authority for FY 2018 and were estimated by staff at the Heritage Foundation using the Center for Data Analysis’s Health Model as well as the CBO’s November 2014 Options to Reduce the Deficit (option 74). All $5.665 billion in savings represents mandatory spending.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 145 146 spending. mandatory 2017. 16, represents All 2017December 2026,” savings to in Deficit: billion the $27.451 Reduce to “Options Office, Foundation Reform,” Heritage Structural 5Steps on to Payment aDown Savings: “Medicare Jr., Hederman S. Rea and Moffit E. Robert in used methodologies and savings from come also Estimates Model. Health Analysis’s Data Center the for using Foundation Heritage at the by staff were estimated and 2018 FY for authority budget as expressed are Savings CALCULATIONS Ȗ ADDITIONAL READING insurance hospital the more than costs services on spending A(hospitalization), Part Medicare In 2018. FY payer would save obligations. $16.881 This in billion tax theand beneficiary the between balance better would a restore change D. Band This cent for Parts premium obligation percent 25 from per 35 to ciary benefi the raising by gradually taxpayers to costs trend of should shifting slow this Congress down rest. the fund taxpayers and costs cent of program percover 25.5 premiums averageonly beneficiary coverage), drug D(prescription where Part care Medi in true is 75 percent. same The remaining the fund to taxpayers percent, 25 to leaving decreased has amount services). this time, Over B (physician Part premium for the percent50 Medicare toward contributeto wererequired beneficiaries enacted, was program Medicare out the of When are date. whereThere several areas are Medicare premiums RATIONALE would policy save $27.451 This Premiums. 2018. Update FY Medicare in billion RECOMMENDATION Update Medicare Premiums Ȗ Brief Foundation Heritage Reform,” on 5 Structural StepsPayment Down toa Savings: “Medicare Jr., Hederman S. Rea and Moffit E. Robert MANDATORY No. 3908, April 12, 2013. 12, April 3908, No. The Heritage Foundation | Foundation Heritage The - - - - - lion in FY 2018. lion FY in wouldsave income. This $10.464 beneficiary’s bil on a be based also projectedthe deficitandcould coverto falling rising or premium would flexible, be supplemental annual projected The deficits. with years Apremium in Part should add atemporary Congress burden taxpayers, ona greater current deficits imposing or annual of continuing Instead fund’s projected depletion trust the 2028. in until 2020 from projected 2015 doto is to again so and from deficits2008 ran program the fact, In tax. payroll Medicare the through in takes fund trust $106 million in FY 2018. FY in $106 million policy would save proper ofThis benefit.ize the use on of home cost each episode the incentiv to health 2015. $17.7 Medicare costs which services, in billion requirement foruse who home beneficiaries health no cost-sharing addition,In currently there is heritage.org Issue Brief Issue 38 Congress should add amodest Congress copayment No. 3908, April 12, 2013, and in Congressional Budget Budget Congressional in and 2013, 12, April 3908, No. Issue Issue - 37 -

MANDATORY Labor, Health and Human Services, Education, and Related Agencies

Expand Current Threshold for Medicare Income- Related Subsidies

RECOMMENDATION Expand the current threshold for Medicare income-related subsidies. This policy would save $31.102 billion in FY 2018.

RATIONALE Today, seniors with an annual income in excess of adopting this initial income threshold, Congress $85,000 (couples with an annual income in excess would increase the number of Medicare recipients of $170,000) pay higher Part B and Part D premi- who pay higher premiums to roughly 10 percent ums, ranging from 35 percent to 80 percent of total of the total Medicare population, and the wealthi- Medicare premium costs. These recipients account est among them (about 3 percent) would pay their for just 6 percent of the total Medicare population. own way entirely. This change would ensure that Congress should reset these income thresholds and limited taxpayer resources are distributed more require seniors with an annual income in excess of evenly based on income, and would focus subsidies $55,000 (couples with an annual income in excess on those who need them most. This proposal would of $110,000) to start paying higher premiums. By save $31.102 billion in FY 2018.

ADDITIONAL READING ȖȖ Robert E. Moffit and Rea S. Hederman Jr., “Medicare Savings: 5 Steps to a Down Payment on Structural Reform,” Heritage FoundationIssue Brief No. 3908, April 12, 2013.

CALCULATIONS Savings are expressed as budget authority for FY 2018 and were estimated by staff at the Heritage Foundation using the Center for Data Analysis’s Health Model. All $31.102 billion in savings represents mandatory spending.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 147 148 spending. mandatory represents savings in billion $21.390 All Model. Health Analysis’s Data Center the for using Foundation Heritage at the by staff were estimated and 2018 FY for authority budget as expressed are Savings CALCULATIONS Ȗ ADDITIONAL READING 2015, In average 70.2 life years. was expectancy average 1965, In the American’s life at years. 65 age of eligibility Security’s Social with line in ity ago, law set the eligibil years 50 enacted was care Medi When same. the remained has of eligibility but program’s the created, age was Medicare since greatly increased has expectancy averageThe life RATIONALE 2018. FY in billion saves $21.390 proposal This Security’s. Social with Medicare’s age of eligibility Harmonize RECOMMENDATION with SocialSecurity’s Harmonize Medicare’s ofEligibility Age Ȗ Brief Foundation Heritage Reform,” on 5 Structural StepsPayment Down toa Savings: “Medicare Jr., Hederman S. Rea and Moffit E. Robert MANDATORY No. 3908, April 12, 2013. 12, April 3908, No. The Heritage Foundation | Foundation Heritage The - - Social Security eligibility. Security Social to changes with eligibility Medicare align better and expectancy life today’s reflect benefitsbetter to for Medicare age of the eligibility increase gradually should Congress 80.7projected reach to years. 2030, it 79.4 reached in is and years, expectancy heritage.org

Issue Issue MANDATORY Labor, Health and Human Services, Education, and Related Agencies

Modify Medicare Advantage Payment System with a Competitive, Market-Based System

RECOMMENDATION Delinking the payment system from traditional Medicare would save $1.720 billion in FY 2018.

RATIONALE The Medicare Advantage program offers seniors below traditional Medicare rates. Congress should comprehensive Medicare coverage through private detach Medicare Advantage’s (Part C’s) payment health plans as an alternative to traditional Medi- system from spending in traditional Medicare and care. Over a third of all seniors chose this arrange- replace it with a new benchmark payment that is ment for Medicare. Today, payments for these based on bids submitted from regional competing arrangements are linked to the traditional Parts A private health plans to provide traditional Medi- and B, and private plan bids have routinely come in care benefits. CALCULATIONS Savings are expressed as budget authority for FY 2018 and were estimated by staff at the Heritage Foundation using the Center for Data Analysis’s Health Model. Part of the savings are derived from the CBO’s score of President Obama’s proposal: Congressional Budget Office, “An Analysis of the President’s 2017 Budget,” March 2016, p. 8. All $1.720 billion in savings represents mandatory spending.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 149 150 2018. FY in spending mandatory in billion $10 and spending, discretionary in billion $1 includes Children” Disabled for Benefits Security Supplemental to “Eliminate Office, Budget Congressional from come savings Estimated CALCULATIONS Ȗ ADDITIONAL READING are child adisabled Low-income with parents intended population for by SSI ending children. originally its should SSI reformed serve be to dren. Today about 15 percent of recipients SSI chil are who come low-income and from disabled homes. functionally who are households children to with elderly. However, assistance provides cash also SSI low-income the to and of adisability, selves because them support to unable who are adults to tance assis provide cash to intent of was SSI original The RATIONALE 2018. in saves $11 billion proposal This Income benefits Supplemental (SSI) disabledforchildren. Security Eliminate RECOMMENDATION Benefits forDisabled Children Eliminate SupplementalSecurityIncome Ȗ November 10, 2014. Welfare Foundation State,” the Heritage Would Expand Act ABLE the “How Boccia, Romina and Rector Robert MANDATORY The Heritage Foundation | Foundation Heritage The Options for Reducing the Deficit: 2017 the Deficit: to 2026 Reducing for Options - - - disability that are not covered by another program, not covered are by another program, that disability due achild’s to expenses medical Any programs. welfare eligible forbe other these means-tested benefits wouldcontinue cash SSI to receiving no longer who are of Parents children stamps. food and Medicaid such as programs, welfare ed other for means-test fromvarious as well benefits as program, for (TANF) Needy Families Assistance Temporary the from assistance eligible for cash proposal would save $11 billion in FY 2018. would FY saveproposal $11 in billion should by provided This be SSI. Medicaid, such as heritage.org , December 2016, p. 46. The option option The 46. p. 2016, , December

Backgrounder No. 2972, 2972, No. - MANDATORY Labor, Health and Human Services, Education, and Related Agencies

Adopt a More Accurate Inflation Index for Social Security and Other Mandatory Programs

RECOMMENDATION Adopt a more accurate inflation index for Social Security and other mandatory programs. This proposal saves $2.6 billion in 2018.

RATIONALE Federal benefits, such as Social Security, grow with changes in the cost of living. The chained CPI would the cost of living to protect the value of benefits correct for the small sample bias and substitution from inflation. Several other parameters of fed- bias problems that are well-known about the CPI. eral benefit programs are also adjusted for infla- Adopting the chained CPI for federal benefit calcu- tion. Currently, Social Security and several federal lations would protect benefits from inflation while programs are indexed to the consumer price index improving accuracy in cost-of-living adjustments (CPI) to adjust for inflation. The current CPI is and saving taxpayers money. This proposal saves outdated and inaccurate, and it often overstates $2.6 billion in 2018, with savings growing rapidly the rise in the cost of living. Under a new measure, over time to 39.1 billion in FY 2026.39 benefit increases would more accurately reflect

ADDITIONAL READING ȖȖ Romina Boccia and Rachel Greszler, “Social Security Benefits and the Impact of the Chained CPI,” Heritage Foundation Backgrounder No. 2799, May 21, 2014.

CALCULATIONS Estimated savings come from Congressional Budget Office,Options for Reducing the Deficit: 2017 to 2026, December 2016, p. 73. The option to “Use an Alternative Measure of Inflation to Index Social Security and Other Mandatory Programs” includes $2.6 billion in mandatory spending in FY 2018.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 151 152 spending. mandatory represent savings in billion $15.8 All 2018. FY in level of savings asimilar assume we conservatively 2015, FY for are savings estimated the Although 2016. 16, November Foundation Heritage Marriage,” Strengthen and Abuse and Tax Child Fraud, to Waste, Credit End Additional and Credit Tax Income Earned the Rector, “Reforming Robert from come Estimates billion. of $15.8 savings anet EITC, for the in penalties marriage reducing for year per billion of $3.3 cost added an and ACTC, EITC the in and fraud reducing from savings in year per billion $19.1 include savings Estimated CALCULATIONS Ȗ ADDITIONAL READING couples. problems be These married can against low-income recipients,similar discrimination and to other are not available that benefits welfare ed excessive multi-tierients receiving means-test going non-parents, to ACTC some and recip EITC parents for intended benefits include ACTC and EITC problems the Other fraud. with with plagued promote to designed ACTC work, are yet they are low-income to credits households. and EITC The tax ACTC the provide refundable and EITC The RATIONALE billion annually. would save proposal $15.8 This EITC. the in penalties reduce marriage and (ACTC) program, Credit Tax Child Additional the and program (EITC) Income Credit Tax Earned the Reduce in fraud RECOMMENDATION Child Tax Credit Income Tax Credit, andFraud intheAdditional Reduce Fraud Penalties and Marriage intheEarned Ȗ Marriage,” Heritage Foundation Strengthen and Abuse and Tax Child Fraud, to Waste, Tax Credit End Additional Income and Credit Earned the Rector, “Reforming Robert MANDATORY Backgrounder The Heritage Foundation | Foundation Heritage The No. 3162, November 16, 2016. 16, November 3162, No. - - ties. Furthermore, the EITC could be expanded for expanded could be EITC the Furthermore, ties. penal ACTCmarriage and and benefits,ending receive EITC also to housing assistance subsidized whoreceive families benefits,allowing not claim to of achild custody legal with only parents allowing credits, tax refundable before issuing returns tax income verify to IRS the by requiring addressed means-tested welfare system. welfare means-tested of government the rest the across exist that alties pen couples help marriage to married decrease heritage.org Backgrounder No. 3162, 3162, No. - - MANDATORY Labor, Health and Human Services, Education, and Related Agencies

Strengthen Work Requirements in the Temporary Assistance for Needy Families Program

RECOMMENDATION Strengthen work requirements in the Temporary Assistance for Needy Families (TANF) program. This proposal has no federal savings in FY 2018.

RATIONALE Today, the majority of work-eligible TANF recip- be completely idle and the state is still fulfilling ients (an average of 51.7 percent across the states) the requirement. are completely idle, neither working nor prepar- ing for work. Part of the reason for the high rates Moreover, among the half of TANF recipients that of “idleness” is that states are taking advantage fulfill the work requirements, most are simply of loopholes that allow them to fulfill the work working part time. State welfare bureaucracies requirement without actually having to move have generally done little, if anything, to promote recipients into work activity. The main reason, this employment but nonetheless take the credit. however, is that the work-participation rate is too TANF’s work requirement should be strengthened low. Only 50 percent of able-bodied adults are so that 75 percent of a state’s non-employed TANF required to participate in work activities, mean- caseload is participating in work activities for 20 ing that the other 50 percent of the caseload can hours to 30 hours per week.

ADDITIONAL READING ȖȖ Robert Rector and Rachel Sheffield, “Setting Priorities for Welfare Reform,” Heritage Foundation Issue Brief No. 4520, February 24, 2016. ȖȖ Rachel Sheffield, “Welfare Reform and Upward Mobility Act Can Restart Welfare Reform,” Heritage Foundation Issue Brief No. 4619, October 28, 2016.

CALCULATIONS Because the federal funding stream for TANF is fixed, Heritage does not include any savings for FY 2018.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 153 154 spending. mandatory represent savings in billion Table $2.118 2015, All 2. September Households,” Low-Income for Assistance Housing “Federal Office, Budget Congressional from comes recipients disabled and of elderly percentage estimated The billion. of $2.118 savings estimated generating 2018, FY in percent of 10 by amount an assistance housing of total federal billion $21.176 only we reduce thus and recipients, elderly and to disabled goes that assistance housing of low-income percent 50 roughly the for funding maintaining proposes Heritage amount. 2016 FY at the constant hold levels these that assumes Heritage spending, 2018 FY and 2017 FY on information Absent Service. Housing Rural the and Fund, Insurance Housing Rural the programs, assisted-housing other Program, Partnership Investment Home the VI, HOPE Fund, Operating Housing Public the Fund, Capital Housing Public the Assistance), Rental Project-Based and Assistance Rental 8(Tenant-Based Section includes: spending 2016 total in FY billion $42.352 The Fiscal2017,” Year 2016. Government, U.S. Appendix, the of “Budget Budget, and Management of Office in found assistance housing income low- on total in spending billion level of $42.352 estimated 2016 FY the on based are savings Estimated authority. budget represent Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING: meet the and assess to equipped better are States of low-income states. the costs to housing programs and for administration the both responsibility the government transferring federal the should begin nothing, with circumstances similar others in ing benefits for some leav while provide substantial often that programs funded federally of primarily Instead assistance. level available of needed and the as does and localities, states across significantly vary costs 2016. and FY Housing availability, needs, low-incomeand persons, at of acost in $42 billion percent housing for of of cost subsidized the poor government pays for federal The over currently 90 RATIONALE 2018. FY in billion saves $2.1176 proposal This thestates. to of housing programs responsibility control fiscal and Return RECOMMENDATION Income Housing totheStates Return Control andFiscal ResponsibilityforLow- Ȗ Ȗ October 28, 2016. 28, October Foundation Heritage Reform,” Welfare Restart Can Act Mobility Upward and Reform “Welfare Sheffield, Rachel Foundation Heritage for Reform,” Welfare Priorities “Setting Sheffield, Rachel and Rector Robert MANDATORY The Heritage Foundation | Foundation Heritage The - per year, reaching zero funding at end the of a zero funding per year, reaching out should at phased be of arate 10 percentgrams housing pro for means-tested Federal funding them much morerun efficiently and effectively. incentive have the to will states housing programs, fortheir of paying responsibility fiscal the With housing situations. and economicunique climates their populations, given of unique their needs and funded by state and local authorities. local and state by funded and designed programs alternative with programs ing hous replace federal how, it will extent, what to and determine to should allowed state decade. Each be heritage.org Issue Brief Brief Issue No. 4520, February 24, 2016. 4520, February No. Issue Brief Issue No. 4619, 4619, No. - - Labor, Health and Human Services, Education, and Related Agencies

ENDNOTES 1. Congressional Budget Office, “An Update to the Budget and Economic Outlook: 2016 to 2026,” August 23, 2016, https://www.cbo.gov/publication/51908 (accessed February 6, 2017). 2. Ibid. 3. CPB’s Federal Appropriation Request & Justification for FY 2017/2019, http://www.cpb.org/funding (accessed December 5, 2016). 4. National Public Radio, “Public Radio Finances,” 2017, http://www.npr.org/about-npr/178660742/public-radio-finances (accessed March 7, 2017). 5. U.S. Department of Labor, “U.S. Department of Labor Evaluation Policy,” November 2013, https://www.dol.gov/asp/evaluation/EvaluationPolicy.htm (accessed January 3, 2017). 6. U.S. Government Accountability Office, “Workforce Investment Act: Labor Has Made Progress in Addressing Areas of Concern, But More Focus Needed on Understanding What Works and What Doesn’t,” February 26, 2009, http://www.gao.gov/new.items/d09396t.pdf (accessed December 12, 2014). 7. Peter Z. Schochet et al., “Estimated Impacts for Participants in the Trade Adjustment Assistance (TAA) Program Under the 2002 Amendments,” Social Policy Research Associates and Mathematica Policy Research, August 2012, http://wdr.doleta.gov/research/FullText_ Documents/ETAOP%5F2013%5F10%5FParticipant%5FImpact%5FReport%2Epdf (accessed January 8, 2016). 8. U.S. Department of Labor, U.S. Department of Labor FY 2015 Annual Performance Report, https://www.dol.gov/sites/default/files/documents/general/budget/CBJ-2017-V1-01.pdf (accessed January 3, 2017). 9. Calculations based on FY 2017 enacted levels. Corporation for National and Community Service, FY 2017, https://www.nationalservice.gov/sites/default/files/documents/CBJ_Report_FY2017_1.pdf (accessed February 16, 2018). 10. Charities Aid Foundation, 2016 Annual Report, https://www.cafonline.org/docs/default-source/about-us-publications/1950a_wgi_2016_ report_web_v2_241016.pdf?sfvrsn=4 (accessed December 28, 2016). 11. National and Community Service, “AmeriCorps State & National FAQ,” .(https://www.nationalservice.gov/programs/americorps/join-americorps/americorps-faqs (accessed December 30, 2016 12. Arthur Milikh, “Should We Compel Volunteerism,” Heritage Foundation Commentary, October 8, 2015, http://www.heritage.org/research/commentary/2015/10/milikh-should-we-compel-volunteerism. 13. U.S. Government Accountability Office, “Measuring Performance: The Corporation for National and Community Service Faces Challenges Demonstrating Outcomes,” February 17, 2012, http://www.gao.gov/products/GAO-12-310 (accessed January 12, 2017). 14. Congressional Budget Office, “Eliminate Federal Funding for National Community Service and Senior Community Service Employment Programs,” November 13, 2013, https://www.cbo.gov/budget-options/2013/44785 (accessed December 29, 2016). 15 The Elementary and Secondary Education Act was reauthorized as the Every Student Succeeds Act in December 2015. The previous version was called the No Child Left Behind Act. 16. The FY 2016 spending level of $1.475 billion was increased for projected discretionary spending growth in FY 2017 based on the CBO’s most recent August 2016 baseline spending forecast. 17. Ryan T. Anderson, “Obama Unilaterally Rewrites Law, Imposes Transgender Policy on Nation’s Schools,” The Daily Signal, May 13, 2016, http://dailysignal.com/2016/05/13/obama-unilaterally-rewrites-law-imposes-transgender-policy-on-nations-schools/. 18. Samantha Harris, “Campus Judiciaries on Trial: An Update from the Courts,” Heritage Foundation Legal Memorandum No. 165, October 6, 2015, http://www.heritage.org/education/report/campus-judiciaries-trial-update-the-courts. 19. The Institute of Museum and Library Services, “About Us,” https://www.imls.gov/about-us (accessed February 2, 2017). 20. The Institute of Museum and Library Services, “Grants to States,” https://www.imls.gov/grants/grants-states (accessed February 2, 2017). 21. Public Law 113–235, 128 Stat. 2130, and Public Law 114–113, 129 Stat. 2242. 22. Alyene Senger and Edmund F. Haislmaier, “The ACA’s Risk Programs: Why Congress Needs to Prevent Insurer Bailouts,” Heritage Foundation, Issue Brief No.4632, November 23, 2016, http://www.heritage.org/research/reports/2016/11/the-acas-risk-programs-why- congress-needs-to-prevent-insurer-bailouts. 23. Consolidated Appropriations Act of 2016, Public Law 114-113. 24. U.S. Conference of Catholic Bishops Secretariat of Pro-Life Activities, “The Need for the Conscience Protection Act of 2016,” http://www.usccb.org/issues-and-action/religious-liberty/conscience-protection/upload/The-Need-for-The-Abortion-Non-Discrimination- Act.pdf (accessed February 6, 2016). 25. U.S. Conference of Catholic Bishops Secretariat of Pro-Life Activities, “HHS Refuses to Enforce Weldon Amendment,” http://www.usccb. org/issues-and-action/religious-liberty/conscience-protection/upload/HHS-Refuses-to-Enforce-Weldon-Amendment-FACT-SHEET.pdf (accessed February 6, 2017). 26. John Malcolm, “Labor Department’s Persuader Rule Undermines Employers’ Rights and Threatens the Attorney-Client Relationship,” Heritage Foundation Backgrounder No. 2838, August 26, 2013, http://www.heritage.org/research/reports/2013/08/labor-departments- persuaderrule-undermines-employers-rights-and-threatens-the-attorneyclient-relationship. 27. James Sherk, “Salaried Overtime Requirements: Employers Will Offset Them with Lower Pay,” Heritage Foundation Backgrounder No. 3031, July 2, 2015, http://www.heritage.org/research/reports/2015/07/salaried-overtime-requirements-employers-will-offset-them-with-lowerpay. 28. James Sherk, “Beyond Burgers: The NRLB’s Decision Is Comprehensively Awful,” National Review Online, August 29, 2015, http://www.nationalreview.com/article/423257/beyond-burgers-nlrbs-decision-comprehensively-awful-jamessherk?target=author&t id=900732 (accessed November 17, 2015). 29. James Sherk, “Proposed Union Rules Harm Workers and Job Creation,” Heritage Foundation Backgrounder No. 2584, July 20, 2011, http://www.heritage.org/research/reports/2011/07/proposed-union-rules-harm-workers-and-job-creation.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 155 156 39. 38. 37. 36. 35. Ibid. 34. 33. 32. 31. 30. Reducing theDeficit 2017–2026 Congressional Budget Office, “Use anAlternative Measure of Inflation toIndex Social Security andOtherMandatory Programs,” Ibid., p. 10. and-Reports/ReportsTrustFunds/downloads/tr2016.pdf (accessed February 16,2017). Supplementary Medicare Insurance Trust Funds Centers for Medicare andMedicaidServices, to asthe“Cadillac tax,” was originallysupposedto be implemented in2018 buthassince beendelayed by Congress until 2020. The Affordable Care Act imposesa40percent excise tax onthe cost ofhealthplansabove definedthresholds. This tax, commonly referred December 9, 2016). iii, https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/Downloads/MedicaidReport2015.pdf (accessed February 6,2017), andDepartment ofHealthandHumanServices, “2015 Actuarial Report ontheFinancialOutlookfor Medicaid,” pp. iiand Report,” Figure 2,https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/MedicaidReport.html (accessed Centers for Medicare andMedicaidServices, “Actuarial Report ontheFinancialOutlookfor Medicaid:Data for Figures andTables in2012 (accessed February 6,2017). September 30, 207,” for Medicaid,theChildren’s HealthInsurance Program, andAidto NeedyAged, Blind,orDisabledPersons for October 1,2016 Through Department ofHealthandHumanServices, “Federal FinancialParticipation inState Assistance Expenditures; Federal Matching Shares cbo.gov/sites/default/files/51298-2015-03-ACA.pdf (accessed February 6,2017). Congressional Budget Office, “Insurance Coverage Provisions ofthe Affordable Care Act—CBO’s March Baseline,” 2015 Table1, https://www. Sherk, “Proposed UnionRulesHarmWorkers andJobCreation.” choice. No. 2371, March 31,2009, http://www.heritage.org/research/reports/2009/03/labor-union-snap-elections-deprive-employees-of-informed- James SherkandRyan O’Donnell, “LaborUnionSnapElections Deprive Employees ofInformed Choice,” HeritageFoundation WebMemo Federal Register , December 8,2016, https://www.cbo.gov/publication/52142 (accessed onJanuary3,2017). , Vol. 80, No. 227, November 25, 2015, https://aspe.hhs.gov/sites/default/files/pdf/167966/FMAP17.pdf The Heritage Foundation | Foundation Heritage The 2016 AnnualReport of theBoards of Trustees of theFederal Hospital Insurance andFederal , 2016, p. 26 https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends- heritage.org Options for Legislative Branch Eliminate Funding forSpecialCongressional ADDITIONAL READING Affordable Care Act’s (ACA’s) health insurance exchange. This proposal saves $50 million in FY 2018.FY in Act’s (ACA’s) million saves $50 Care proposal Affordable This exchange. insurance health Subsidies fortheACA’s Health InsuranceExchange However, 7, on August 2013, of Office the Person and (FEHBP) EmployeesProgram Benefits Health the through purchased subsidies insurance for congressional health for special funding Eliminate CALCULATIONS Under 1312 (d)(3)(D) Section Con of ACA, the 158 Options Program (SHOP) marketplace. The average annual premiums are $3,767 for an individual, and $9,228 for a family. The average federal federal average afamily. for The $9,228 and individual, an for $3,767 are premiums annual average The marketplace. (SHOP) Program Options RATIONALE RECOMMENDATION nel Management (OPM) change this reversed their to obtain Members staff and required instead $50.0 million. Although this cost will likely rise with health care costs, Heritage conservatively assumes it holds steady in FY 2018. FY in steady holds it assumes conservatively Heritage costs, care with health will likely rise cost this Although million. $50.0 health coverage through the ACA’s the coverage through health insurance health Savings are based on calculating the total cost of the government’s FEHBP premium contribution for congressional Members and staff, based based staff, and Members congressional for contribution premium FEHBP government’s of the total cost the calculating on based are Savings are not eligible for exchange subsidies and therefore receive the FEHB-equivalent premium subsidy. Finally, Heritage assumes that 50 percent percent 50 that assumes subsidy. Finally, premium Heritage receive therefore FEHB-equivalent the and subsidies exchange for eligible not are gress voted to end its participation in the Federal the voted end to in participation its gress exchange. staff would no longerstaff thereceive employercontri of employees who receive the subsidy have self-only coverage and 50 percent have family coverage. This results in a FY 2017 estimated cost of cost estimated 2017 aFY in results This coverage. have percent family 50 and coverage have self-only receive subsidy who the of employees public from compiled are data These families. for $6,921 and individuals, for $2,825 is premiums, of the percent 75 is which contribution, Health Business Small DC on the plan gold a purchasing staffer) of acongressional age average (the a31-year-old for premium average the on bution toward the cost of their health insurance. insurance. of health cost their the bution toward further assumes that 90 percent of Members of Congress and staff members elect employer-provided health insurance, of whom 90 percent 90 whom of insurance, health employer-provided elect members staff and of Congress of Members percent 90 that assumes further by costs subsidy insurance health the multiplied analysts Heritage To Link.” total cost, the health calculate DC in to sold be Products Health for the 535 congressional members), based on 2010 data available at “Vital Statistics on Congress,” Brookings Institution, July 11, 2013. Heritage Heritage 2013. 11, July Institution, Brookings Congress,” on Statistics at “Vital available data 2010 on based members), congressional 535 the addition to (in members staff congressional 11,400 about assumes Heritage subsidies. those receiving staffers of congressional number the Ȗ Ȗ releases of premium data and age, adjusted according to the designated age curve. For SHOP data, see HealthCare.gov, “January 2017 rates rates 2017 “January HealthCare.gov, see data, SHOP For curve. age to designated according the adjusted age, and data of premium releases Ȗ Ȗ Backgrounder and Robert E. Moffit, “Congress and Obamacare: A Big Double Standard,” Standard,” Double Big A Obamacare: and “Congress Moffit, E. Robert and Robert E. Moffit, Edmund F. Haislmaier, and Joseph A. Morris, “Congress in the Obamacare Trap: No Easy Escape,” Heritage Foundation Foundation Heritage Escape,” Easy No ObamacareTrap: the in “Congress Morris, A. EdmundJoseph and Haislmaier, Moffit, E. F. Robert 7, August 2013, Signal, Daily The to Congress,” Deal Obamacare Special Gives and F. Law the Edmund Disregards “Administration Haislmaier, 1 This change meant that Members that meant and change This No. 2831, August 2, 2013. 2, August 2831, No. The Heritage Foundation | Foundation Heritage The - - - Administration took this regulatory action without regulatory this took Administration Congress should restore the original intent of the should original the restore Congress in the FEHBP, the in continue to employ receive the to through a ruling allowing Members of Congress allowing aruling through and staff, even though they are are no theylonger eventhough enrolled staff, and of the U.S. Code, the law that governs the FEHBP. governs the law that the Code, of U.S. the er contribution The for exchanges. the coverage in statute and end this special contribution. special end and this statute under authority either ACA the statutory or Title 5 Human EventsHuman heritage.org , November 11, 2013. 11, , November - 2

Legislative Branch

Reduce Funding for the U.S. Capitol Police RECOMMENDATION Reduce funding for the U.S. Capitol Police (USCP) by 10 percent. This proposal saves $37.4 million in FY 2018.

RATIONALE The USCP is a federal law enforcement agency compared to the department’s FY 2017 request. The charged with protecting Congress, the Capitol com- Capitol Police force is one of the highest paid federal plex, employees, and visitors. With an estimated law enforcement agencies. The USCP minimum 2,266 sworn officers and civilian employees, there is starting salary is $57,598 plus benefits. FBI agents, one USCP officer or employee for every five staffers in comparison, have a starting salary of $47,158. or Members of Congress. The force is nearly one- The high USCP officer base salary does not account third the size of the entire U.S. Secret Service. for the more than $35 million in estimated overtime pay allowable for 2017—nearly 10 percent of Funding for the USCP should be frozen at current the USCP operating budget. levels, which would save $34.6 million in FY 2018

ADDITIONAL READING ȖȖ Justin Bogie, “Congress Should Look Toward Legislative Branch Appropriations Bill as a Starting Point for Spending Cuts,” Heritage Foundation Issue Brief No. 4573, June 8, 2016.

CALCULATIONS Savings are based on the FY 2016 enacted budget authority of $375 million as found in the Consolidated Appropriations Act, 2016, pp. 421–422. This estimate assumes that the enacted spending level for FY 2016 will hold constant in FY 2017 and decrease at the same rate (–0.32 percent) as discretionary spending growth in FY 2018, according to the CBO’s most recent August 2016 baseline spending projections. A 10 percent cut in that funding equals $37.4 million.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 159 Eliminate Funding fortheJohn StennisCenter ADDITIONAL READING The John Stennis Center is a legislative program Center program JohnThe alegislative Stennis is MS) career as aSenator. as Center Stennis career aims The MS) 2018. FY in for Center. John million saves the $0.5 Stennis proposal funding This Eliminate CALCULATIONS 160 Congress, congressional staff, andin pub others staff, congressional Congress, RATIONALE RECOMMENDATION lic service. lic intended as a living tribute to John to Stennis’s tribute (D– intended aliving as Savings are based on eliminating the $430,000 in funding received by the John Stennis Center in the Consolidated Appropriations Act of 2016. Act Appropriations Consolidated Center the Stennis in received John by the funding in $430,000 the eliminating on based are Savings to attract young people to careers in public service, public in service, young people careers to attract to and developmentand Members to of opportunities promote leadership skills, and provide training provide training and promote leadership skills, Ȗ Ȗ Justin Bogie, “Congress Should Look Toward Legislative Branch Appropriations Bill as a Starting Point for Spending Cuts,” Heritage Heritage Cuts,” Spending for Point aStarting as Bill Toward Appropriations Look Should Branch Legislative “Congress Bogie, Justin Foundation Foundation Issue Brief Brief Issue No. 4573, June 8, 2016. 8, June 4573, No. The Heritage Foundation | Foundation Heritage The - Center. Young The at Heri The program Leaders Given budget that topare to projected deficits$1 ing priorities. There are numerous entities private priorities. There are ing tage Foundationtage one is budgets Past example. and on spend focus to needs by Congress 2023, trillion and Congress should do to now. so act Congress and for elimination, its appropriations have called bills providing services similar to those of the Stennis of Stennis those the to similar services providing heritage.org - - Legislative Branch

ENDNOTES 1. Edmund F. Haislmaier, “Administration Disregards the Law and Gives Special Obamacare Deal to Congress,” The Daily Signal, August 7, 2013, http://dailysignal.com//2013/08/07/administration-disregards-the-law-and-gives-special-obamacare-deal-to-congress/, and Robert E. Moffit, “Congress and Obamacare: A Big Double Standard,”Human Events, November 11, 2013, http://humanevents.com/2013/11/11/congress-and-obamacare-a-big-double-standard/ (accessed November 17, 2015). 2. Robert E. Moffit, Edmund F. Haislmaier, and Joseph A. Morris, “Congress in the Obamacare Trap: No Easy Escape,” Heritage Foundation Backgrounder No. 2831, August 2, 2013, http://www.heritage.org/research/reports/2013/08/congress-in-the-obamacare-trap-no-easy-escape.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 161

Military Construction, Veterans Affairs, and Related Agencies 164 reports/52142-budgetoptions2.pdf (accessed 2017). January 23, https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/ 265, p. 2016, 8, 2017 December 2026,”to Deficit: the Reducing for “Options Office, Budget Congressional Office: Budget Congressional by the 2018 FY for estimated as authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING such factors on defined based ority. are groups The pri lower the highest the numbers being with eight, of one on ascale to care who seek medical veterans VA The veterans. to ranks care provide health to patients. eran number the of vet has than recent in years faster VA’s the using increased has services care health number the of non-veterans and notis aveteran, one 10 of more every VA that than revealed patients sheet fact Service A 2014 Research Congressional medicine. of military needs on unique the focus (VA) should of Veterans Department The Affairs RATIONALE 2018. FY in saves $5.4 proposal billion This Groups 8. 7and Priority in forEnd VA enrollment veterans in care medical RECOMMENDATION for Veterans inPriorityGroups 7and8 End Enrollment inVA Medical Care Ȗ Ȗ www.heritage.org/research/reports/2016/06/reforming-veterans-health-care-now-and-for-the-future. Foundation Future,” the for Heritage and Now Care: Veterans Health “Reforming O’Shea, S. John http://www.heritage.org/research/reports/2016/05/congress-should-exercise-restraint-in-veterans-affairs-funding-bill. Foundation Bill,”Heritage Funding Veterans in Affairs Restraint Exercise Should “Congress Bogie, Justin 1 2 VA solely should used be resources The Heritage Foundation | Foundation Heritage The - - veterans in PGs 7 and 8. Scarce VA dol care Scarce 8. health 7and PGs in veterans benefits should notforDepartment providing be system. care health veterans’ the in enrolled seven priority or eight are with veterans 2 million income More threshold. geographic its than as well VA’s exceed the to income as threshold national incomes their tend and disabilities, vice-connected 8do notGroups 7and have compensable (PG) ser Veterans Priority in status. disability income and as severe disabilities. severe the most with spent must be on veterans first lars heritage.org

Issue Brief Issue Issue Brief Issue No. 4585, June 24, 2016, http:// 24, 2016, June 4585, No. No. 4548, May 17, 2016, 4548, No. 3 The The - - MANDATORY Military Construction, Veterans Affairs, and Related Agencies

Eliminate Concurrent Receipt of Retirement Pay and Disability Compensation for Veterans

RECOMMENDATION Eliminate concurrent receipt of retirement pay and disability compensation for veterans. This proposal saves $9.0 billion in FY 2018.

RATIONALE Until 2003, military retirees were prohibited from percent in 2005 to just over 50 percent in 2015.4 A collecting full Defense Department retirement 2013 report by the U.S. Government Accountability and VA disability benefits simultaneously. Mili- Office (GAO) revealed that nearly 60,000 veterans tary retirees eligible for VA disability benefits lost received cash benefits from three different federal $1 in Defense Department retirement benefits for programs simultaneously (retirement pay from the every $1 in VA disability benefits they collected. The Department of Defense, disability compensation rationale for this offset policy was that concurrent from the VA, and Social Security Disability Insur- receipt of retirement and disability payments was ance (SSDI)). More than 2,300 veterans received compensating veterans for the same service twice. $100,000 or more in annual benefits each, and the Disability payments are meant to compensate highest annual benefit amounted to more than workers when they cannot work due to a disability, $200,000.5 The U.S. government should honor its whereas retirement payments are intended for peo- promise to the men and women who serve with- ple who are no longer working. out generating excessive benefit payouts. Simply returning to the long-standing pre-2004 policy, Policy changes in 2004 allowed Defense Depart- where veteran disability payments offset retirement ment retirees to collect benefits from both pro- pay, would reduce excessive benefits and save tax- grams simultaneously. Since enactment of the con- payers $9 billion in 2018, and $139 billion between current-receipt policy, the share of military retirees 2017 and 2026. who also receive VA disability benefits rose from 33

ADDITIONAL READING ȖȖ Romina Boccia, “Triple-Dipping: Thousands of Veterans Receive More than $100,000 in Benefits Every Year,” Heritage Foundation Issue Brief No. 4295, November 6, 2014, http://www.heritage.org/research/reports/2014/11/ triple-dipping-thousands-of-veterans-receive-more-than-100000-in-benefits-every-year.

CALCULATIONS Estimated savings come from: Congressional Budget Office, “Options for Reducing the Deficit: 2017 to 2026,” December 8, 2016, p. 34, https:// www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/52142-budgetoptions2.pdf (accessed January 31, 2017). The option to “Eliminate Concurrent Receipt of Retirement Pay and Disability Compensation for Disabled Veterans” includes $9.0 billion in mandatory spending in FY 2018.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 165 166 2018. FY in spending mandatory in billion $2.0 includes Duties” to Unrelated Military Disabilities Certain by Excluding Compensation Veterans’ for Disability Eligibility “Narrow option to The 2017). 31, January (accessed www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/52142-budgetoptions2.pdf https:// p. 59, 2016, 8, 2017December 2026,” to Deficit: the Reducing for “Options Office, Budget Congressional from: come savings Estimated CALCULATIONS Ȗ ADDITIONAL READING service: or worsened caused be to by military unlikely identified sevenare has conditions that GAO The service. or worsened due military to incurred for conditions were that not necessarily as well as service, military active-duty ened during or wors conditions occurred or that ical injuries compensation VA the from for disability for med conditions. eligible Veteranson are service-related compensation should forDisability focus veterans RATIONALE 2018. saves $2 in billion proposal duties. This military to unrelated are that disabilities compensation by excluding certain disability for veterans’ eligibility Narrow RECOMMENDATION Unrelated toMilitaryDuties Compensation byExcluding CertainDisabilities Narrow EligibilityforVeterans’ Disability Ȗ www.heritage.org/research/reports/2016/06/reforming-veterans-health-care-now-and-for-the-future Foundation Future,” the for Heritage and Now Care: Veterans Health “Reforming O’Shea, S. John MANDATORY The Heritage Foundation | Foundation Heritage The 6 (1) (1) - - $25.7 2017 from billion 2026. to 2018, saves $2 in and billion proposal GAO. This the by identified conditions non-service-related compensation for those disability veterans’ cease would (7)proposal fibroids. uterine and This tis, hemorrhoids, (5) multiple sclerosis, (6) osteoarthri (3) disease, Crohn’s (4) pulmonary tive disease, (2) obstruc disease, chronic heart arteriosclerotic heritage.org Issue Brief Brief Issue . No. 4585, June 24, 2016, 24, 2016, June 4585, No. http:// - - Military Construction, Veterans Affairs, and Related Agencies

ENDNOTES 1. The $5.4 billion in savings represent discretionary budget authority. This proposal would also affect mandatory spending outlays, which are not included here. 2. Erin Bagalman, “The Number of Veterans that Use VA Health Care Service: A Fact Sheet,” Congressional Research Service Report for Congress No. 43579, June 3, 2014, http://fas.org/sgp/crs/misc/R43579.pdf (accessed April 14, 2016). 3. Congressional Budget Office, “End Enrollment in VA Medical Care for Veterans in Priority Groups 7 and 8,” Options for Reducing the Deficit 2017–2026, December 8, 2016, https://www.cbo.gov/publication/52142 (accessed January 3, 2017). 4. Congressional Budget Office, “Eliminate Concurrent Receipt of Retirement Pay and Disability Compensation for Disabled Veterans,” Options for Reducing the Deficit 2017–2026, December 8, 2016, https://www.cbo.gov/publication/52142 (accessed January 3, 2017). 5. Government Accountability Office, “Disability Compensation: Review of Concurrent Receipt of Department of Defense Retirement, Department of Veterans Affairs Disability Compensation, and Social Security Disability Insurance,” letter to Senator Tom Coburn (R–OK), September 30, 2014, http://www.gao.gov/assets/670/666267.pdf (accessed September 31, 2014). 6. Government Accountability Office, “Law Allows Compensation for Disabilities Unrelated to Military Service,” HRD–89–60, July 31, 1989, http://www.gao.gov/products/GAO/HRD-89-60 (accessed on January 3, 2017).

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 167

Multiple Subcommittees 170 proposal. this any in include not does thus and savings of those estimates have not any reliable does Heritage savings, generate would space office of federal use their for unions charging Although 2018. FY for million $156 of figure same the assumes Heritage recent data, more Absent 2014. October Branch,” Executive the in Relations “Labor–Management Management, Personnel of Office available. are data which for recent year most the 2012, in time official in million $156 unions gavefederal government federal the that estimates Management Personnel of Office The CALCULATIONS Ȗ ADDITIONAL READING provide conduct noto practices work. These union buildings infederal “official space” free with unions government. federal Mostthe provide agencies also andto lobby grievances, file agreements, bargaining ers pay negotiate to for collective unions federal employee. afederal on clock as the while Taxpay employeesfederal work to for union labor their allows This unions. labor federal with time” “official agencies federal negotiateFederal to law requires RATIONALE 2018. FY in million saves $156 proposal This buildings. federal employees, for within unions space they use should and charge employees federal federal work to on should clock as the stop for allowing while Congress unions labor RECOMMENDATION Outside OrganizationsontheClock Stop Paying Federal Employees WhoWork for Ȗ of Representatives, June 3, 2011. 3, June of Representatives, House U.S. Committee, Reform and Government the for GoodValue the Oversight beforeTaxpayer?” Time: testimony “Official Sherk, James The Heritage Foundation | Foundation Heritage The - would save over ayear. $150 million changes forThese use. value officethey the space fair-market unions government charge should also clock out doing work. The when union they are government officers to The union should require of government unions the operations subsidize publicdirectly benefitand heritage.org Multiple Subcommittees

Repeal the Davis–Bacon Act RECOMMENDATION Congress should repeal the Davis–Bacon Act and prevent states from imposing prevailing-wage restrictions on federally funded construction projects. This proposal saves $7.791 billion in FY 2018.

RATIONALE The Davis–Bacon Act requires federally financed it needlessly inflates the total cost of building infra- construction projects to pay “prevailing wages.” In structure and other federally funded construction theory, these should reflect going market rates for by 10 percent. construction labor in that area. However, the GAO and Inspector General have repeatedly criticized The CBO has estimated that the Davis–Bacon the Labor Department for using self-selected sta- Act applies to a third of all government construc- tistically unrepresentative samples to calculate the tion—many state and local projects are partially prevailing-wage rates. Consequently, actual Davis– or wholly funded with federal dollars. Without Bacon rates usually reflect union rates that average prevailing-wage restrictions, these projects would 22 percent above actual market wages. cost substantially less. Congress should repeal the Davis–Bacon Act and prohibit states from imposing The Davis–Bacon Act requires taxpayers to overpay separate prevailing-wage restrictions on federally for construction labor. Construction unions lobby funded construction projects. Doing so would save heavily to maintain this restriction—it reduces the taxpayers billions of dollars every year. cost advantage of their non-union competitors. But

ADDITIONAL READING ȖȖ James Sherk, “Examining the Department of Labor’s Implementation of the Davis–Bacon Act,” testimony before the Committee on Education and the Workforce, U.S. House of Representatives, April 14, 2011. ȖȖ James Sherk, “Labor Department Can Create Jobs by Calculating Davis–Bacon Rates More Accurately,” Heritage Foundation Backgrounder No. 3185, January 21, 2017.

CALCULATIONS Savings are expressed as budget authority and were calculated by comparing current public construction spending of $270.3 billion annually (as found in U.S. Census Bureau, “Construction Spending: Value of Construction Put in Place at a Glance September 2016”) to spending levels in the absence of Davis–Bacon. Davis–Bacon increases construction costs by 9.9 percent, as documented in Sarah Glassman et al., “The Federal Davis–Bacon Act: The Prevailing Mismeasure of Wages,” The Beacon Hill Institute, February 2008. The CBO estimates that Davis–Bacon covers 32 percent of all public construction spending—$86.496 billion in 2016. In the absence of Davis–Bacon’s 9.9 percent increase in costs, that spending would cost only $78.704 billion. Assuming that public construction spending remains constant between 2016 and FY 2018, and federal taxpayers capture all the value of the savings from eliminating Davis–Bacon, this proposal saves $7.791 billion in FY 2018.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 171 172 Ȗ Ȗ ADDITIONAL READING Section securing to obstacles certainly there are activities. permits) mining for404 various (as opposed Section permits to 402 Section secure to companies mining would require that manner ina material” fill of and “discharge material” “fill may Agency redefine Protection Environmental the and of Engineers Corps Army United The States. the waters across could impact that activities tain forUnder cer required may be CWA, the permits RATIONALE 2018. FY in Waterno savings Clean has proposal (CWA) Act This regulations. under material” fill of and“discharge material” definition“fill of existing the should maintain Congress RECOMMENDATION Regulations Act ofFill“Discharge Material” Under CleanWater Maintain Existing Definitionof“Fill Material”and Ȗ Ȗ Spending,” Heritage Foundation Foundation Heritage Spending,” Wrong on Regulations, on Right Bill: Appropriations Environment and Interior House 2016 “FY Bakst, Daren and Gray, Loris, Nicolas John 2015). Foundation, Heritage Katz, Diane and Gordon Robert Environmental Policy Guide: 167 Recommendations for Environmental Policy Reform Environmental for Policy Recommendations 167 Guide: Environmental Policy Issue Brief Issue No. 4226, June 26, 2015. 26, June 4226, No. The Heritage Foundation | Foundation Heritage The 1 While While - operations. benefitmining from that communities the and try indus mining the could harm that restrictions sary unneces protection imposing without ronmental activities. they would effectively prohibit mining numerous that have argued groups industry and stringent, even more are permits 402 Section permits, 404 heritage.org 2 Existing regulations provide ample envi regulations Existing 3 (Washington, DC: The The DC: (Washington, - - - Multiple Subcommittees

Limit Application of the Recapture Provision for Dredge-and-Fill Permits

RECOMMENDATION Congress should limit application of the recapture provision for dredge-and-fill permits. This proposal has no savings in FY 2018.

RATIONALE Under the CWA, Section 404 permits are not or reduce the scope of jurisdictional waters, those required for normal farming activities, construc- discharges are not exempt. The Agencies have tion of stock ponds, and other related activities. broadly interpreted the “recapture” provision to However, there are exceptions, including under apply even when the “new use” is simply a change what is referred to as the “recapture” provision.4 In from one crop to another crop.5 recent testimony, a member of the American Farm Bureau Federation explained this provision: By limiting the application of the recapture provision, Congress can help to prevent the weaken- [W]here discharges of dredged or fill material are ing of the exemptions that are critical for farmers used to bring land into a new use (e.g. making wet- and ranchers. lands amenable to farming) and impair the reach

ADDITIONAL READING ȖȖ Robert Gordon and Diane Katz, Environmental Policy Guide: 167 Recommendations for Environmental Policy Reform (Washington, DC: The Heritage Foundation, 2015). ȖȖ John Gray, Nicolas Loris, and Daren Bakst, “FY 2016 House Interior and Environment Appropriations Bill: Right on Regulations, Wrong on Spending,” Heritage Foundation Issue Brief No. 4226, June 26, 2015.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 173 174 Ȗ ADDITIONAL READING government oppose to choosing federal policies on governments some local latitude in gives eralism enforcement the law. resist that of Fed immigration cities—cities money sanctuary to grant providing of Justice from Department the and Security land should of prohibit HomeCongress Department the RATIONALE for 2018. Heritage doesnot FY and include savings any uncertain are savings those savings, budgetary could generate proposal this cities. Although sanctuary to funding federal should eliminate Congress RECOMMENDATION Eliminate Federal Funding forSanctuaryCities Ȗ Hans A. von Spakovsky, “Sanctuary Cities Put Law-Abiding Citizens at Risk,” Heritage Foundation Foundation Heritage at Risk,” Citizens Law-Abiding Put Cities von Spakovsky, “Sanctuary A. Hans The Heritage Foundation | Foundation Heritage The - - citizenship status of any individual. of any status citizenship government federal the on the with information ing from exchang officials city ments restricting from §1373 govern Code 8 U.S. prohibits or state local or of pay such policies. for reward have results to the government but federal the not does immigration, heritage.org Commentary , December 9, 2015. , December - - Multiple Subcommittees

Prohibit Government Discrimination in Tax Policy, Grants, Contracting, and Accreditation

RECOMMENDATION Congress should prohibit government discrimination against any person or group in tax policy, grants, contracting, and accreditation, simply because they speak or act on the belief that marriage is the union of one man and one woman. This proposal has no savings in FY 2018.

RATIONALE In June 2015, the Supreme Court redefined mar- a more radical step. It’s time to abolish, or greatly riage throughout America by mandating govern- diminish, their tax-exempt statuses.” As Americans ment entities to treat same-sex relationships as have long understood, the power to tax is the power marriages. The court, however, did not say that to destroy. private schools, charities, businesses, or individuals must also do so. Indeed, there is no justification for Respect for freedom after the Supreme Court’s the government to force these entities or people to ruling takes several forms. Charities, schools, and violate beliefs about marriage that, as even Justice other organizations that interact with the gov- Anthony Kennedy noted in his majority opinion ernment should be held to the same standards of recognizing gay marriage, are held “in good faith by competence as everyone else, but their view that reasonable and sincere people here and throughout marriage is the union of a man and a woman should the world.” never disqualify them from government programs.

Already state and local governments have penal- Educational institutions, for example, should be ized counselors, adoption agencies, doctors, and eligible for government contracts, student loans, small-business owners who declined to act against and other forms of support as long as they meet the their convictions concerning sex and marriage. relevant educational criteria. Adoption and fos- There are signs that the federal government will do ter care organizations that meet the substantive the same: In oral arguments before the Supreme requirements of child welfare agencies should be Court in Obergefell (the case redefining marriage), eligible for government contracts without having to Justice Samuel Alito asked Solicitor General Don- abandon the religious values that led them to help ald Verrilli whether a university or college might orphaned children in the first place. lose its nonprofit tax status because of its convic- tion that marriage is the union of one man and one Congress should prohibit government discrimina- woman. Verrilli’s response: “It’s certainly going to tion in tax policy, grants, contracts, licensing, or be an issue.” accreditation based on an individual’s or group’s belief that marriage is the union of one man and The Sunday after the Supreme Court’s ruling in one woman, or that sexual relations are reserved for Obergefell, New York Times religion columnist Mark such a marriage.6 Oppenheimer wrote a column for Time magazine headlined: “Now’s the Time to End Tax Exemptions This proposal has no savings in FY 2018, but will for Religious Institutions.” Oppenheimer argued, ensure that otherwise well-qualified organiza- “Rather than try to rescue tax-exempt status for tions are not penalized because of their beliefs organizations that dissent from settled public pol- about marriage. icy on matters of race or sexuality, we need to take

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 175 176 Ȗ Ȗ ADDITIONAL READING Ȗ Ȗ July 2, 2015. 2, July Foundation Debate,” Heritage Marriage the in Discrimination Government from Protection of Faith Deserve “People Brief Foundation Heritage Redefinition,” Marriage after Pluralism and Freedom Protects Act Defense Amendment “First T.Ryan Anderson, No. 4490, November 25, 2015. 25, November 4490, No. The Heritage Foundation | Foundation Heritage The heritage.org Factsheet No. 160, 160, No. Issue Issue Multiple Subcommittees

Prohibit Any Agency from Regulating Greenhouse Gas Emissions

RECOMMENDATION Congress should prohibit any agency from regulating greenhouse gas emissions. This proposal has no estimated savings in FY 2018.

RATIONALE The Obama Administration has proposed and Restricting opportunities for Americans to use such implemented a series of climate change regulations, an abundant, affordable energy source will only pushing to reduce greenhouse gas emissions from bring economic pain to households and businesses— vehicles, heavy-duty trucks, airplanes, hydrau- with no climate or environmental benefit to show lic fracturing, and new and existing power plants. for it. The cumulative economic loss will be hun- More than 80 percent of America’s energy needs dreds of thousands of jobs and trillions of dollars of are met through conventional carbon-based fuels. gross domestic product.

ADDITIONAL READING ȖȖ Nicolas D. Loris, “Congress Should Stop Regulations of Greenhouse Gases,” Heritage Foundation Issue Brief No. 4053, September 23, 2013. ȖȖ Nicolas D. Loris, “The Many Problems of the EPA’s Clean Power Plan and Climate Regulations: A Primer,” Heritage Foundation Backgrounder No. 3025, July 7, 2015. ȖȖ Nicolas D. Loris, “Methane Regulations Add to the Price Tag of the Administration’s Climate Plan,” Heritage Foundation Issue Brief No. 4341, February 3, 2015.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 177 178 Ȗ Ȗ Ȗ ADDITIONAL READING state and rights on property attack this action, nal Absent congressio most of time. the land dry are waters that so-called to ditches man-made certain Water coveredcould be under Clean the Act—from of waters that types the expand would greatly rule WOTUS controversial Corps’ EPAThe Army and RATIONALE 2018. FY in savings no has proposal This rule. for “Waters should the (WOTUS) of United prohibit the States” Congress funding RECOMMENDATION the United Rule States”(WOTUS) Prohibit Funding forthe“Waters of Ȗ Ȗ Ȗ Foundation Foundation Heritage Rights,” Property on Attack an and Water EPA/Corps the aPower It’s Grab Rule: You About to Know “What Need Bakst, Daren 2015. 4, December to Stop Signal, Daily It,” The Process EPA’s Appropriations “The the Use Can Water Lawmakers Power Bakst, Grab: Daren 2014.January 8, Foundation Heritage Water Regulations,” Clean Act Critical on Science Sound Ignoring Corps the “EPA and Bakst, Daren Backgrounder No. 3012, April 29, 2015. 29, April 3012, No. The Heritage Foundation | Foundation Heritage The - should block funding for its implementation. its for funding block should overcomes Congress battles, rule legal the If rary. only tempo is stay mentation but this of rule, the astay, issued Court Circuit Sixth Fortunately,power could soon move the forward. heritage.org

7 blocking imple blocking Issue Brief Issue No. 4122, 4122, No. - - Multiple Subcommittees

Enforce Data-Quality Standards RECOMMENDATION Congress should pass laws to enforce data-quality standards. This proposal has no savings in FY 2018.

RATIONALE No funds should be used for any grant for which the agencies to “issue guidelines ensuring and maxi- recipient does not agree to make all data produced mizing the quality, objectivity, utility, and integrity under the grant publicly available in a manner con- of information (including statistical information) sistent with the Data Access Act (Title III, OMB, of disseminated by the agency.”8 Public Law 105–277), as well as in compliance with the standards of the Information Quality Act (44 However, the Office of Management and Budget has U.S. Code 3516 note). The Data Access Act requires unduly restricted the Data Access Act, and there is federal agencies to ensure that data produced under little accountability that could ensure agency com- grants to and agreements with universities, hospi- pliance with the Information Quality Act. Credible tals, and nonprofit organizations are available to the science and transparency are necessary elements of public. The Information Quality Act requires the sound policy.9 Standards must be codified—guide- Office of Management and Budget with respect to lines are insufficient.

ADDITIONAL READING ȖȖ Robert Gordon and Diane Katz, Environmental Policy Guide: 167 Recommendations for Environmental Policy Reform (Washington, DC: The Heritage Foundation, 2015). ȖȖ Diane Katz, “An Environmental Policy Primer for the Next President,” Heritage Foundation Backgrounder No. 3079, December 14, 2015.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 179 180 Ȗ ADDITIONAL READING a that condemnor establish to should required be for is economic development,whether ataking the asubjective element thereSince is determining to blight-relatedsuch as takings. economic development closely and related takings, protection from necessary states all in owners ty provide power proper the of Congress, within is decision it extent should, the to and landmark this decade since the action in meaningful take to failed has Congress of United Constitution. the States Amendment under Fifth the allowed and use” lic deemed for be to was a“pub of taking type This for economic development. party another private it to transfer and ment property private may seize held in United Supreme the States JuneOn 2005, 23, Court RATIONALE for 2018. FY Heritage savings doesnot and include estimated any unknown are savings those savings, could generate proposal this of property. private Although for seizure grants should withhold Congress RECOMMENDATION Withhold GrantsforSeizure ofPrivate Property Ȗ June 22, 2015. 22, June After “A Decade Bakst, Daren Kelo v. of City New London Kelo : Time for Congress to Protect American Property Owners,” Heritage Foundation Foundation Heritage Owners,” Property American to Protect Congress for : Time that the govern the that The Heritage Foundation | Foundation Heritage The - - - to (1) seize private property for (1) economicto property private develop seize invoke that eminent domain other jurisdictions development or states to for infrastructure grants should withhold Congress seized. be to allowed be safety, should and health to aconcreteposing harm such as blighted, legitimately is itself that property Only area. blighted allegedly an in located is that non-blightedproperty, seizing property including seize to private “blight” broad use definitions of ic-development governments often Local reason. but for would econom the not have occurred taking harm to health and safety. and health to harm aconcrete poses itself property the unless blight, development for is apublic and or use, (2) address but for economic would have occurred taking the condemnor the demonstratement, that unless can heritage.org 10 Backgrounder No. 3026, 3026, No. - - Multiple Subcommittees

ENDNOTES 1. Laura Barron-Lopez, “COP Omnibus Rider Keeps Administration from Tightening Mining Rule,” The Hill, January 16, 2014, http://thehill.com/policy/energy-environment/195621-gop-rider-in-omnibus-bill-would-tighten-rules-on-waste (accessed April 28, 2015). See also Kate Sheppard, “Appropriations Bill Would Block New Mountain Removal Fill Rules,” The Huffington Post, January 14, 2014, http://www.huffingtonpost.com/2014/01/14/omnibus-coal-mining_n_4598628.html (accessed April 28, 2015). 2. Claudia Copeland, “Controversies over Redefining ‘Fill Material’ Under the Clean Water Act,” Congressional Research Service Report for Congress, August 21, 2013, http://www.fas.org/sgp/crs/misc/RL31411.pdf (accessed April 28, 2015). 3. Robert Gordon and Diane Katz, Environmental Policy Guide: 167 Recommendations for Environmental Policy Reform (Washington, DC: The Heritage Foundation, 2015). 4. Specifically: “Any discharge of dredged or fill material into the navigable waters incidental to any activity having as its purpose bringing an area of the navigable waters into a use to which it was not previously subject, where the flow or circulation of navigable waters may be impaired or the reach of such waters be reduced.” 33 U.S. Code § 1344 (f)(2), https://www.law.cornell.edu/uscode/text/33/1344 (accessed April 30, 2015). 5. Ellen Steen, “Statement of the American Farm Bureau Federation Regarding: The Definition of ‘Waters of the United States’ Proposed Rule and Its Impact on Rural America,” testimony before the Subcommittee on Conservation, Energy, and Forestry, Committee on Agriculture, U.S. House of Representatives, March 3, 2015, http://agriculture.house.gov/sites/republicans.agriculture.house.gov/files/images/Steen%20 Testimony.pdf (accessed April 29, 2015). (Emphasis in original.) 6. “People of Faith Deserve Protection from Government Discrimination in the Marriage Debate,” Heritage Foundation Factsheet No. 160, July 2, 2015, http://www.heritage.org/research/reports/2015/07/people-of-faith-deserve-protection-from-government-discrimination-inthe- marriage-debate. 7. State of Ohio et al. v. U.S. Army Corps of Eng’rs et al., Nos. 15-3799/3822/3853/3887, Order of Stay (6th Cir. 2015), http://www.ca6.uscourts.gov/opinions.pdf/15a0246p-06.pdf (accessed November 18, 2015). .Consolidated Appropriations Act of 2001, Public Law 106–554, §515 .8 9. Gordon and Katz, Environmental Policy Guide: 167 Recommendations for Environmental Policy Reform. 10. Daren Bakst, “A Decade After Kelo: Time for Congress to Protect American Property Owners,” Heritage Foundation Backgrounder No. 3026, June 22, 2015, http://www.heritage.org/research/reports/2015/06/a-decade-after-kelo-time-for-congress-to-protect-american- propertyowners#_ftn1.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 181

State, Foreign Operations, and Related Programs 184 Ȗ Ȗ Ȗ Ȗ ADDITIONAL READING activities inappropriate funded has UNDP the past, the In suffering. very tently that helps perpetuate inadver countries authoritarian many in ulations pop Moreover, suffering assist to meant aid UNDP level: lost at country the was focus this found 2011, but that report and the 2004 between tion spent activities over on billion $8 anti-poverty commissioned by UNDP, the report organiza the 2012 to unclear. is according Fortance instance, assis but of impact this the programs, anti-poverty on year every of dollars spends billions organization agency The ofpremier U.N. the system. anti-poverty the be to aspires word the and around countries 170 conducts more projects in than UNDP The RATIONALE 2018. FY in million saves $113 contributions United the End proposal U.S. Nations to Development This (UNDP). Program RECOMMENDATION Development Program End Funding fortheUnited Nations Ȗ Ȗ Ȗ Ȗ April 25, 2011. 25, April Afghanistan,” for Trust Fund Order Review and Law of the SIGAR “2011 Reconstruction, Afghanistan for General Inspector Special WebMemo Foundation Heritage Program,” Development U.N. the from Funds Withhold Should Steven “Congress and Groves, D. Schaefer Brett 27, August 2010. Signal, Daily The Regimes?” to Repressive Aid Continue UNDP Does D. Schaefer, “Why Brett September 2010. 22, Foundation Heritage Results,” Modest Aims, Grand Development: and Nations United Terry Miller, “The Ambassador at all. if poverty, with nections remote only have con ity. of activities its Many prior this to not does conform them, undertakes it which in manner the level, and at country the it undertakes activities of the part alarge tion, reduc poverty is priority UNDP overriding the even So, though diluted. becomes often reduction level, however, oncountry poverty focus the the reaches issue the time top priority. the By accorded is reduction level, poverty board utive level exec at the and planning strategic At the work. of its objective principal the and area, focus core UNDP’s the remains reduction Poverty No. 1783, January 26, 2008. 26, January 1783, No. 1 The Heritage Foundation | Foundation Heritage The ------dence established. of was atrocities government evi long after Syrian the work with government,continued the and to relations with good order in Zimbabwe maintain to in outbreak choleraof a warnings stifled also has UNDP The Venezuela, Korea, North Zimbabwe. and Iran, in revealed as weak where independent auditing has has auditing independent where weak as revealed been oversight has addition, ofIn UNDP resources the terrorist organization Hamas in the Gaza Strip. Gaza the in Hamas organization terrorist the to material and resources of diverting him accused contractor and aUNDP governmentIsraeli arrested program.” this continue plague to acknowledge problems to the that fails and stan] LOTFA for Fund [Law Afghani Order Trust and for downplayto overseeing UNDP’s responsibility “appears UNDP the more worryingly, and, remain deficiencies these that indicate UNDP the and force.” police aviable maintaining and establishing in ress of prog timeliness and quantity, quality, expected needed provide the to of UNDP’s value services the continue about concerns be to there will addressed, are oversight issues monitoring these and “Until concluded: and oversightmanagement and failings (SIGAR) identified Reconstruction numerous for General Afghanistan Inspector Special the A2011 of audit Office by U.S. been the available. heritage.org 4 Correspondence 2014 in SIGAR between Special Report 5 In July In 2016, the 3 No. 86, 86, No. - - 2

- 6 State, Foreign Operations, and Related Programs

CALCULATIONS Savings are estimated based on the reported FY 2016 obligations of $113.6 million as listed in U.S. Department of State, “United States Contributions to International Organizations,” Sixty-Fifth Annual Report to the Congress Fiscal Year 2016, p. 9, https://www.state.gov/documents/ organization/267550.pdf (accessed February 7, 2017). Heritage assumes that spending holds steady in FY 2017 and decreases at the same rate as discretionary spending for FY 2018 (–0.32 percent), according to the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 185 186 economic sense. makes country but on cover whether risks, investment the a in will decisions not on whether government aU.S. agency Investors their should support. base taxpayer to do to not so, but shouldkets entitled free they are be mar emerging in invest to want that Companies foreign to investors. friendly adopt policies are that to have less reason countries those environments, foreign risky investments in OPIC guarantees foreign When investors. attract to most likely are investment best have the climates that Countries Worse, OPIC bad economic policies. rewards taxpayer. the risk on the putting while hands in profitsprivate OPICpayer on exposure, hook the for puts the this tax the putting By account for risk. do not fully Moreover,institutions. OPIC’s prices subsidized sound domestic have reasonably which financial India, and Brazil suchmiddle-income as countries, in institutions financial use otherwise who might developmently undermine customers by accepting taxpayers).the OPIC Indeed, may actual products government of U.S. the credit (that and is, faith the using optionsprivate byservices offering lower-cost OPIC these displaces insurance. political-risk and developingoped and world offerinvestment loans the economy,in devel global firms private many 1969, in today’s kind in of this government services need for there may have been legitimate While investment funds. capitalizes and terrorism; and coups such as disruption, political from resulting losses against insurance risk subsidizes guarantees; developing OPIC countries. loan and provides loans promote to investment in Nixon Administration OPIC 1969 in of at request created the the was RATIONALE increases proposal of scope government. and This of size the reducing goal OPIC important the consistent is with government the cost to money, OPIC because generates eliminating more costs, operating its revenue than Investment Corporation (OPIC). Private recommendation estimated Overseas the is this Eliminate While RECOMMENDATION Investment Corporation Eliminate theOverseas Private MANDATORY net spending by $118 million in FY 2018. FY in net by $118 spending million The Heritage Foundation | Foundation Heritage The - - - - ther undermining the basis for basis OPIC’s the ther undermining continuation, least-developed the Fur countries. overwhelmingly are today investment, which private to access lack of developing progress that nations” social ic and OPIC “contribute to econom the to established was least-developed to even portfolio countries though of its share addition,In OPIC only asmall directs Ȗ Ȗ Ȗ Ȗ questions Congress: in ic of examples projects OPIC should supports raise jobs, U.S. inefficient. it massively is supports Specif per job “supported.”dollars even OPIC Thus, if of of thousands hundreds cost even valid, if and, OPIC dubious of for support jobs U.S. are claims or interests. economic U.S. support security directly OPIC that clear from it far projects is Finally, increasing in those countries. been investment has capital private as decreasing, is need forthe OPIC even least-developed in countries Ȗ Ȗ Ȗ Ȗ in Istanbul, Turkey. Istanbul, in Ritz-Carlton hotel for a of financing million $50 Russia. in for Papa John’sFinancing franchises pizza Hamas. formed with was government aunity while territories Palestinian the in 13 projects finance to $67 million taxpayers.” U.S. to cost additional for site the at now forced provide security to is Embassy U.S. the and uninhabitable, are were never completed buildings the and gone, is loans in million “As $85 the aresult, not properly overseen never and completed. were that complexapartment Afghanistan in for loans amajor in hotel million and $85 heritage.org 7 - - - State, Foreign Operations, and Related Programs

ȖȖ According to the Competitive Enterprise Milton Friedman criticized the agency in 1996 as Institute, “In recent years, OPIC has follows: “I cannot see any redeeming aspect in the increasingly emphasized environmental factors existence of OPIC. It is special interest legislation of in its investment decisions. In 2014, more than the worst kind, legislation that makes the problem it 40 percent of its resources went to renewable is intended to deal with worse rather than better…. 8 energy projects.” These projects include $46 OPIC has no business existing.” million in insurance for an unnamed “Eligible U.S. Investor” for a Kenyan wind power project.

ADDITIONAL READING ȖȖ Bryan Riley and Brett D. Schaefer, “Time to Privatize OPIC,” Heritage Foundation Issue Brief No. 4224, May 19, 2014. ȖȖ Brett D. Schaefer and Bryan Riley, “8 Reasons Congress Should End Taxpayer Support for the Overseas Private Investment Corporation,” The Daily Signal, September 30, 2015. ȖȖ Ryan Young, “The Case against the Overseas Private Investment Corporation: OPIC Is Obsolete, Ineffective, and Harms the Poor,” Competitive Enterprise Institute On Point No. 208, September 24, 2015.

CALCULATIONS Savings are expressed as budget authority for FY 2018 as estimated by the CBO in its most recent August 2016 baseline spending projections. Savings, which in this case are negative, include $261 million in discretionary revenue losses, partially offset by $143 million in mandatory spending savings, for a total increase in spending of $118 million in FY 2018.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 187 188 projections. spending baseline 2016 recent August percent), (–0.32 to most CBO’s 2018 according the FY for spending discretionary rate as same at the decreases and 2017 FY in steady holds spending that assumes 7, Heritage 2017). February (accessed organization/267550.pdf 9, https://www.state.gov/documents/ p. Year 2016, Fiscal to Congress the Report Annual Sixty-Fifth Organizations,” to International Contributions States of State, “United Department U.S. in of $67.9 listed as obligations million 2016 FY reported the on based estimated are Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING the to reinstituted be to funding he would allow ilization. ster or involuntary procedures coercive abortion supporting from aid prohibits international U.S. which amendment, Kemp–Kasten the under UNFPA the to funding For withheld U.S. the years, RATIONALE 2018. FY for in United the Nations saves million $68 proposal Population funding (UNFPA). This Fund Eliminate RECOMMENDATION Population Fund Eliminate Funding fortheUnited Nations Ȗ Ȗ Heritage Foundation Foundation Heritage Two-Child Policy,” the to Rescind China Pressing for Case Humanitarian “An Torre, T. and William and Economic Sarah Wilson, Enos, Olivia Foundation Heritage to U.N.,” the Contributions Record-Setting Reverse and to U.N. the Contributions U.S. on Requirement Report the Renew Should D. Schaefer, “Congress Brett 9 In 2009, President Obama announced 2009, In President announced Obama Backgrounder No. 3146, November 18, 2016. 18, November 3146, No. The Heritage Foundation | Foundation Heritage The WebMemo No. 3324, July 22, 2011. 22, July 3324, No. - all federal funding to the UNFPA. the to funding federal all 2016. should FY eliminate in Congress organization the to million $68 providing most recent allocation the with UNFPA, the to dollars of taxpayer millions sent since of tens has U.S. the and organization, heritage.org State, Foreign Operations, and Related Programs

Enforce Cap on United Nations Peacekeeping Assessments

RECOMMENDATION Enforce the 25 percent cap on U.N. peacekeeping assessments. This proposal saves $270 million in FY 2018.

RATIONALE Current U.S. law caps U.S. payments for U.N. peace- accumulation of “arrears” (that is, amounts the keeping at 25 percent of the budget, but the U.N. will U.N. expected to receive from the U.S., but did not) assess the U.S. at 28.434 percent in 2018.10 The U.S. in the 1990s. This financial stress forced the U.N. has adopted appropriations bills allowing payments and the other member states to agree to establish above the 25 percent cap in order to avoid arrears. a formal peacekeeping assessment and, as testified Congress should end this practice. Assuming the by Ambassador Richard Holbrooke to the Senate, current $7.874 billion U.N. peacekeeping budget agree to a formula that would lower the U.S. peace- (July 1, 2016, to June 30, 2017) holds relatively keeping assessment to 25 percent in exchange for steady in FY 2018, enforcing the cap would result in payment of U.S. arrears. approximately $270 million in annual savings.11 Congress accepted these assurances in good faith Peacekeeping expenses were originally paid and approved payment of the arrears. While Con- through the regular budget. However, disputes in gress maintained the 25 percent cap as an incen- the early 1960s over peacekeeping expenses and tive for the U.N. to follow through on its promise, sharp political differences led a number of coun- it approved gradually diminishing increases in tries to withhold U.N. funding, and instigated an ad the cap to avoid accumulating arrears while the hoc peacekeeping-funding arrangement through U.N. lowered the U.S. assessment to 25 percent. special accounts in addition to the regular budget With the threat of the U.S. peacekeeping cap as an with discounts for developing countries subsidized incentive, the U.N. began reducing the U.S. peace- through higher assessments for permanent Security keeping assessment, albeit not as rapidly as orig- Council members. inally agreed, reaching 25.9624 percent in 2008 and 2009. When a peacekeeping surge in the late 1980s and early 1990s resulted in unprecedented U.S. pay- In 2010, however, the U.S. assessment rose sharply, ments to the U.N., the U.S. demanded that the ad costing taxpayers hundreds of millions of dollars. hoc arrangement for peacekeeping be changed To avoid arrears, Congress and the Administration to reduce its share of peacekeeping expenses. As adopted temporary increases in the cap. The other President Bill Clinton stated before the General U.N. member states interpreted this action as a Assembly in 1993, the “U.N.’s operations must not weakening in U.S. resolve to lower its peacekeep- only be adequately funded, but also fairly funded…. ing assessment and, unsurprisingly, have adopted [O]ur rates should be reduced to reflect the rise of increases in the U.S. assessment (in three-year other nations that can now bear more of the finan- increments) for the 2010–2012, 2013–2015, and cial burden.” 2016–2018 periods.

In 1994, President Clinton signed Public Law The U.S. should resume pressure on the U.N. to 103–236, which capped U.S. contributions to fulfill its commitment to lower the U.S. peacekeep- U.N. peacekeeping at 25 percent. The discrepan- ing assessment to 25 percent by enforcing the 25 cy between this cap and the amount that the U.N. percent cap. assessed to the U.S. for peacekeeping led to a rapid

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 189 190 2018. FY in million $270 saves percent to percent 25 28.434 from share U.S. the Reducing 2018. FY in constant holds budget 2017 FY the that assumes Heritage 2017). 8, February (accessed asp?symbol=A/70/331/Add.1 http://www.un.org/en/ga/search/view_doc. 2015, 28, December A/70/331/Add.1, 55/236,” and 55/235 Resolutions Assembly of General “Implementation Secretary-General, of the Report from come shares projected The 2017). 8, February (accessed asp?symbol=A/C.5/70/24 2017,” to June http://www.un.org/en/ga/search/view_doc. 30 2016 1July from A/C.5/70/24, Period the for Operations Peacekeeping for “Approved Resources Assembly, General Nations 2017, United in 30, to found $7.874 June as was 2016, 1, budget July for billion Peacekeeping U.N. approved The percent. to 25 2018 FY in percent 28.434 from share U.S. the of reducing result the are savings in million $270 The CALCULATIONS Ȗ Ȗ Ȗ ADDITIONAL READING Ȗ Ȗ Ȗ Backgrounder Foundation Heritage of Assessments,” Scale Nations to United the Changes Fundamental for Push Should U.S. D. Schaefer, “The Brett 2013.January 25, Foundation Heritage Assessment,” to U.N. Lower Cap America’s Enforce Peacekeeping Must D. Schaefer, “U.S. Brett 2015. May 6, Senate, U.S. Relations, Foreign on Committee Policy, Environmental Energy, and Economic, International and Institutions, Multilateral Development, International Multilateral on Subcommittee the before testimony Nations,” United at the Concern of U.S. D. Schaefer, Issues “Key Brett No. 3023, June 11, 2015. 11, June 3023, No. The Heritage Foundation | Foundation Heritage The heritage.org Backgrounder No. 2762, No. State, Foreign Operations, and Related Programs

Return the United Nations Relief and Works Agency for Palestine Refugees in the Near East to Its Original Purpose RECOMMENDATION Returning the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) to its original purpose saves $179 million in FY 2018.

RATIONALE The UNRWA was established more than 60 years and actions have exacerbated the Israeli–Palestin- ago as a temporary initiative to address the needs of ian conflict. The U.S. could advance the long-term Palestinian refugees and to facilitate their reset- prospects for peace by fundamentally shifting tlement or repatriation. It has become a permanent U.S. policy to encourage winding down UNRWA to institution providing services to multiple genera- facilitate its original purpose: ending the refugee tions of Palestinians, of whom a large majority live status of Palestinians and facilitating their inte- outside refugee camps, enjoy citizenship in other gration as citizens of their host states, where most countries, or reside in the Palestinian-governed were born and raised, or resettling them in the West territories. Despite the presence of and activities Bank and Gaza, where the Palestinian government funded through the UNRWA, the Palestinian ref- can assume responsibility for their needs. The few ugee problem has only grown larger, in part due to remaining first-generation Palestinian refugees and the UNRWA’s ever-expanding definition of refugee. those more recently displaced, such as those fleeing conflict in Syria, should be placed under the respon- The UNRWA abandoned its original mission of sibility of the U.N. High Commissioner for Refugees resolving the Palestinian refugee crisis decades ago. (UNHCR) as is the case for other refugee popula- It too frequently violates the neutral comportment tions within the U.N. system. expected of international organizations. Its policies

ADDITIONAL READING ȖȖ Brett D. Schaefer and James Phillips, “Time to Reconsider U.S. Support of UNRWA,” Heritage Foundation Backgrounder No. 2997, March 5, 2015.

CALCULATIONS Savings are estimated based on the reported FY 2016 obligations of $359.5 million as listed in U.S. Department of State, “United States Contributions to International Organizations,” Sixty-Fifth Annual Report to the Congress Fiscal Year 2016, p. 10, https://www.state.gov/ documents/organization/267550.pdf (accessed February 8, 2017). We assume spending holds steady in FY 2017 and decreases at the same rate as discretionary spending for FY 2018 (–0.32 percent) according to the CBO’s most recent August 2016 baseline spending projections. Savings are based on reducing spending by 50 percent in FY 2018 to draw down the agency’s funding.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 191 192 projections. spending baseline 2016 recent August to most CBO’s according the 2018 FY percent) (–0.32 growth in spending discretionary rate as same at the decrease and 2017 FY in steady hold appropriations 2016 FY that assumes Heritage 2029), 488. p. (H.R. 2016 Act, Appropriations Consolidated the in million) found ($49.9 Climate Fund Strategic as ($170.7 the million) and Fund Technology Clean the for levels spending enacted 2016 FY the by using were calculated and authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ Ȗ as Income were begun Countries). programs These Up Low Renewable in Energy for Scaling Program the Resilience, and for Climate Program Pilot the Forest the (which manages Investment itself Fund, Fund Climate Strategic the and Technology Fund Clean the programs, two projects through fund World the which including opment Bank, Banks, Devel by Multilateral the managed is Financing opportunities. some and it, competitive funding cred interest near-zero development” grants, using climate-resilient and low-carbon towards change transformational initiate intended CIF is The “to RATIONALE 2018. FY in saves(CIF). $220 million proposal This Investment Funds Climate the as known also Agreement, Change Climate for Paris the funding Eliminate RECOMMENDATION AgreementChange Eliminate Funding fortheParis Climate ADDITIONAL READING Ȗ Ȗ Ȗ Nicholas D. Loris and Steven Groves, “The Pathway Out of Paris,” The Daily Signal, November 17, November Signal, 2016. Daily The of Paris,” Pathway Out Steven “The and D. Groves, Loris Nicholas 2013. May 28, 2802, No. Foundation Policy,” Warming Heritage of Global Impact Economic David W. Global Kreutzer, “A Disease: the than Cure Worse Foundation Heritage Change,” Climate on Convention Framework Nations United the from Withdraw Should U.S. Steven D. “The Schaefer, and Brett Groves, D. Loris, Nicolas Backgrounder No. 3130, June 9, 2016. June 3130, No. The Heritage Foundation | Foundation Heritage The - 12 - ment-picked technologies and energy sources. sources. energy and technologies ment-picked of govern instead reliable affordable, vide energy pro principles will that free-market to commit should U.S. The Protocol. Paris the underlying U.N. Framework Convention Change on Climate the from principle,On should U.S. the withdraw Agreement. Change Climate under Paris the made agreement was an until a stopgap measure ing opportunity for communities. impoverished opportunity ing creat and poverty on impact alleviating ger-lasting lon principles and Free-market have agreater heritage.org Backgrounder - - - - State, Foreign Operations, and Related Programs

Eliminate Funding for the Global Environment Facility

RECOMMENDATION Eliminate funding for the Global Environment Facility (GEF). This proposal saves $168 million in FY 2018.

RATIONALE The GEF manages the Special Climate Change on Biological Diversity, the U.N. Framework Con- Fund and the Least Developed Countries Fund, vention on Climate Change, the Stockholm Con- with a heavy emphasis on global-warming-adap- vention on Persistent Organic Pollutants, the U.N. tation projects through grants and financing. For Convention to Combat Desertification, the Mina- instance, GEF funds were used to place glacier mata Convention on Mercury, the Montreal Proto- monitoring stations in the Andes to inform agri- col on Substances that Deplete the Ozone Layer, and cultural adaptation practices and to develop water a number of international waters agreements, such resources in China’s agricultural Huang-Huai-Hai as the U.N. Convention on the Law of the Sea.14 basin, allegedly threatened by global warming.13 The U.S. should not use taxpayer dollars to fund Since its inception by the World Bank and U.N. in energy and international climate-change projects. 1991, the GEF has been designated as the financial The U.S. should commit to free-market principles mechanism for a number of problematic interna- that will provide affordable, reliable energy, not gov- tional agreements, including the U.N. Convention ernment-selected technologies and energy sources.

ADDITIONAL READING ȖȖ David W. Kreutzer, “A Cure Worse than the Disease: Global Economic Impact of Global Warming Policy,” Heritage Foundation Backgrounder No. 2802, May 28, 2013. ȖȖ Nicolas D. Loris, “Economic Freedom, Energy, and Development,” in 2015 Index of Economic Freedom (Washington, DC: The Heritage Foundation and Dow Jones & Company, Inc., 2015), chap. 5.

CALCULATIONS Savings are expressed as budget authority and were calculated by using the FY 2016 enacted spending level of $168.3 million as found in the Consolidated Appropriations Act, 2016 (H.R. 2029), p. 487. Heritage assumes that FY 2016 appropriations hold steady in FY 2017 and decrease at the same rate as discretionary spending growth (–0.32 percent) in FY 2018 according to the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 193 194 projections. spending baseline 2016 recent August to most CBO’s according the 2018 percent) (–0.32 growth FY in spending discretionary rate as same at the decrease and 2017 FY in steady hold appropriations 2016 FY that assumes 2029), 487. p. Heritage (H.R. 2016 Act, Appropriations Consolidated the in found as million level of $10 spending requested 2016 FY the by using were calculated and authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ Ȗ ADDITIONAL READING inventories.gas for preparation the of greenhouse guidelines tical and issue, cial Reports response strategies.” and impacts potential causes, its change, on climate knowledgeand socio-economic technical scientific, prehensive of about state the Assessment Reports “preparationof the com with charged is IPCC The RATIONALE 2018. FY in million saves $10 proposal This (IPCC). End contributions U.N. Change the to Panel on Intergovernmental Climate RECOMMENDATION Intergovernmental Panel onClimateChange End Funding fortheUnited Nations Ȗ Ȗ Ȗ December 5, 2012. 5, December Foundation Ice,” on Heritage Climate Conferences U.N. Put Should “U.S. D. Loris, Nicolas and D. Schaefer Brett 2011. 22, July Signal, Try Daily Tripling The Them,” Enough, Aren’tBad David W. Level Numbers Sea IPCC Kreutzer, “If 2013. May 28, 2802, No. Foundation Policy,” Warming Heritage of Global Impact Economic David W. Global Kreutzer, “A Disease: the than Cure Worse Methodology Reports , which are an assessment on an aspecific are , which 15 The IPCC also produces also IPCC The , which provide prac, which The Heritage Foundation | Foundation Heritage The Spe - - - they first meet the standards that Congress has set has Congress that the standards meet they first shouldsis unless not relied upon be or disseminated analy and data IPCC warming. accelerating global of catastrophic, drivers primary the emissions are gas greenhouse manmade that namely issue, the version correct of debate politically anarrow, to and research global-warming confining in mental been instru also has IPCC The poor data. tion, and have manipula been subject bias, to studies These mation Quality Act. Quality mation for government U.S. Infor the the in ameasure as heritage.org Issue Brief Issue No. 3792, 3792, No. Backgrounder - - -

- State, Foreign Operations, and Related Programs

Eliminate the U.S. Trade and Development Agency RECOMMENDATION End funding for the U.S. Trade and Development Agency (USTDA). This proposal saves $62 million in FY 2018.

RATIONALE The USTDA is intended to help These activities more properly belong to the private sector. The best way to promote trade and companies create U.S. jobs through the export of development is to reduce trade barriers. Anoth- U.S. goods and services for priority development er way is to reduce the federal budget deficit and projects in emerging economies. The USTDA thereby federal borrowing from abroad, freeing links U.S. businesses to export opportunities by more foreign dollars to be spent on U.S. exports funding project planning activities, pilot proj- instead of federal treasury bonds. A dollar bor- ects, and reverse trade missions while creating rowed from abroad by the government is a dollar sustainable infrastructure and economic growth not available to buy U.S. exports or invest in the in partner countries.16 private sector of the U.S. economy.17

ADDITIONAL READING ȖȖ Patrick Louis Knudsen, “$150 Billion in Spending Cuts to Offset Defense Sequestration,” Heritage Foundation Backgrounder No. 2744, November 15, 2012. ȖȖ Republican Study Committee Sunset Caucus, “Eliminate the U.S. Trade and Development Agency,” July 21, 2010. ȖȖ Brian M. Riedl, “How to Cut $343 Billion from the Federal Budget,” Heritage Foundation Backgrounder No. 2483, October 28, 2010.

CALCULATIONS Savings are expressed as budget authority as estimated for FY 2018 by the CBO in its most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 195 196 organization’s the to Syria electing including ians, membership Palestin the to beyondlapses granting anumber had of judgmentformed poorly has and per has Worse, UNESCO evidence there that is ous or merely convenient critical. rather than superflu often they are that reveals interests U.S. to of critical projects UNESCO offeredexamples by projects on ground. the actual to of budget dedicated the was minority a while costs, staff to resources percent64 of all budget forer. 2016–2017 draft UNESCO’s devoted afacilitator, implement not principally is an SCO UNE fact, In interests. U.S. to central are activities UNESCO on dubious the that justification UNESCO of renewed funding U.S. allow law to the change sought to have repeatedly Administration Obama the and organization the and UNESCO, in stress prohibition financial created has funding This 2017) for 2018. plus assessed amount the FY in million of $71.8 acharge (assuming arrears in million owe $543 it will funding, UNESCO mit per law to its changes U.S. the If annually. climb continue to 2016—so arrears U.S. in million $71.8 of aportion budget its U.S. the year— each charge continues amember, to remains U.S. the UNESCO 2016. of August as $470.8was million dues of amount unpaid membership.ed total The were grant Palestinians the 2011 after in UNESCO to funding suspended all U.S. the er and provision, of statehood.” attributes recognized not internationally have the does or that group organization any to astate as membership full member or “grants as states” ing stand same the Liberation Organization Palestine “accords that the U.N. of any organization funding out anote 287e) under Code as 22 U.S. prohibit U.S. set (both 1990s early the in enacted laws U.S. Two RATIONALE budget. for 2018. Heritage doesnot FY include savings any UNESCO on current the based $72 million assessment of annual an payments and of arrears million $543 in could result policy of current the reversal but savings, no (UNESCO). has Underlaw, current proposal this Organization andCultural Scientific, law, of United U.S. the Nations to should U.S. Educational, the provide no observance In more funding RECOMMENDATION Educational, Scientific,andCulturalOrganization Enforce Funding Prohibition fortheUnited Nations 18 These prohibitions These have no waiv 20 Moreover, of examination The Heritage Foundation | Foundation Heritage The 19 Because Because 21 ------adopting aresolution Israel condemning on pol its World and Route Heritage Palestinian the List to Pilgrimage the Bethlehem and in of Nativity the add Church to the request aPalestinian approving of anti-Israel including bias, ahistory has also CO UNES citizens. own its slaughtering itthat was 2011 despite in evidence committee rights human of any perceived damage to U.S. interests from from interests U.S. to perceivedof damage any (not some address ofto criticisms those because of implemented reforms recognition in 2003 in press.” rejoined U.S. afree The ket UNESCO and mar afree society, of afree especially institutions “basic the to of hostility poor its management and because UNESCO from decided withdraw 1984 to in when he President recognized as Reagan critical, not is UNESCO America’s supporting in interest it is because membership Palestinians the to full tions granting U.N. payments to law prohibiting U.S. U.S. organiza amend or waive to opposing efforts letter correctly co-authored abipartisan (D–CA) Sherman Brad Ros-LehtinenRepresentatives (R–FL) Ileana and Israel. objectionsthe and of U.S. the Westernthe were actions approved These Wall. over of Temple the history plays Jewish the Mount and deliberately and down Jerusalem, icies regarding ies to admit “Palestine” as amember. as “Palestine” admit ies to bod for other light UN agreen Israel by providing ally our and interests our would undermine hand, law, U.S. Weakening on otherpayer the dollars.… tax of U.S. do not unworthy exist—renders itself that states admits that body UN irresponsibly—a so acts that body agencies.… AUN UN in estine” of “Pal membership to granting the via UN the from state of aPalestinian recognition de facto seek attempts…to derailing successfully in vital heritage.org 22 ------State, Foreign Operations, and Related Programs non-participation in UNESCO). UNESCO’s decision to grant membership to the Palestinians outweighs the U.S. reasons for rejoining.

ADDITIONAL READING ȖȖ Brett D. Schaefer, “Congress Should Challenge the Administration’s UNESCO and U.N. Peacekeeping Budget Request,” Heritage Foundation Issue Brief No. 3914, April 17, 2013. ȖȖ Brett D. Schaefer, “The U.S. Should Withdraw from UNESCO,” Heritage Foundation Issue Brief No. 3760, October 19, 2012. ȖȖ Brett D. Schaefer, “What Palestinian Membership Means for UNESCO and the Rest of the United Nations,” Heritage Foundation Backgrounder No. 2633, December 13, 2011. ȖȖ Brett D. Schaefer and James Phillips, “Provocative Palestinian U.N. Actions Require Strong U.S. Response,” Heritage Foundation Issue Brief No. 4329, January 12, 2015.

CALCULATIONS Heritage does not include any savings for this proposal because, under current law, the U.S. is not contributing to UNESCO. However, reversal of the current policy could result in $543 million in arrears payments and an annual assessment of about $72 million. As of August 2016, UNESCO had charged the U.S. $470.8 million in arrears payments. Heritage assumes that the FY 2017 and FY 2018 charges remain similar to UNESCO’s .charge to the U.S. of $71.8 million 2016

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 197 198 funding. to agency’s down the draw 2018 FY in percent by 50 spending reducing on based are Savings projections. spending baseline 2016 recent August percent), (–0.32 to most CBO’s 2018 according the FY for spending discretionary rate as same at the decreases and 2017 FY in steady holds spending that assumes Heritage 2017). 8, February (accessed organization/267550.pdf 9, https://www.state.gov/documents/ p. Year 2016, Fiscal to Congress the Report Annual Sixty-Fifth Organizations,” to International Contributions States of State, “United Department U.S. in listed as million of $6.9 obligations 2016 FY reported the on based estimated are Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING UNFCCC. the to funding U.S. future any event law prohibiting aU.S. should2011, this trigger in joined UNESCO when Palestinians the case the of accession. instrument depositing their 17, on March UNFCCC the after days 2016—ninety to party the 197th became officially Palestinians the 23(2) Article of treaty, the with accordance In CCC. of accession UNF the deposited to instrument its Authority DecemberOn 2015, 18, Palestinian the membership 2011. in full Palestinians the granted which prohibitionrently applies UNESCO, this to territories. Palestinian the ship to member full grant that organizations international going from to law prohibits funds U.S. Current RATIONALE 2018. FY would save proposal $7 million membership. This full Palestinians the granted also has which Framework Convention (UNFCCC), Change on Climate apply above,but U.N. should the to also discussed as would apply proposal UNESCO to This territories. membership Palestinian the to full grant that U.N. prohibition the organizations on funding Maintain RECOMMENDATION Palestinian Territories Organizations thatGrantFull Membership tothe Maintain theProhibition onFunding United Nations Ȗ Ȗ No. 4329, January 12, 2015. 12, January 4329, No. Foundation Heritage Response,” U.S. Strong Require Actions U.N. Palestinian “Provocative Phillips, James and D. Schaefer Brett Foundation Heritage Change,” Climate on Convention Framework Nations United the from Withdraw Should U.S. Steven D. “The Schaefer, and Brett Groves, Loris, Nicolas Backgrounder 23 The U.S. cur U.S. The No. 3130, June 9, 2016. June 3130, No. The Heritage Foundation | Foundation Heritage The 24 As was was As - - - its specialized agencies. Framework Conven The specialized its United the Nations like just and organization, tional interna atreaty-based is UNFCCC the fact, tion. In organiza atreaty, international is not an UNFCCC the that argument on tortured the based funding however, continued Administration, Obama The ritories in the future. the in ritories ter membership Palestinian the to full grants that for other and any organization for UNFCCC the law should U.S. the enforce this UNESCO, with As permanent bodies. subsidiary website, its people has to 500 and according around employs executive secretary, an has organization The based. are structure its and organization the document upon legal founding tion which the is heritage.org Issue Brief Issue -

- - - State, Foreign Operations, and Related Programs

Oppose Bailouts for the International Monetary Fund and Insist on Rules-Based Lending

RECOMMENDATION Insist that rules-based lending, and not morally hazardous loan programs that lead only to more taxpayer- funded bailouts, become the International Monetary Fund’s (IMF’s) default setting for policy advice to all IMF member countries. This proposal has no estimated savings in FY 2018.

RATIONALE The IMF’s “Exceptional Access Framework” The market is far more effective in enforcing condi- was reinstated at the insistence of Congress in tions, promoting reform, and minimizing the risk exchange for its 2015 approval of the IMF Reform of a crisis spreading in the near term or far into the Package. The framework re-imposes a rule that future. For example, the presence in a country of prohibits new IMF lending to a country that has developed-country private banks—and their best unsustainable debt and no realistic plan to get out practices—is the best way to instill those practices of it. Its abandonment by the IMF in 2010, at the in the local banks that have to compete with them. beginning of the Greek debt crisis, cleared the way for a fresh round of morally hazardous loans that The United States government should encourage bailed out big European banks but left Greece even other major IMF donor nations to join it in send- further in debt and still in need of debt restruc- ing strong and unwavering signals to the world turing and fundamental economic and politi- that the IMF’s resources are not, in fact, unlim- cal reforms. ited. The IMF should be viewed by its developing country members as a firebreak to support and The Trump Administration and the 115th U.S. Con- stabilize the economy in the short term, not the gress should insist that this rules-based “Frame- ultimate solution for financial crises—and defi- work” approach be strengthened and expanded. It nitely not as a “first responder.” To prevent those should become the IMF’s default setting for policy future crises from arising and spinning out of con- advice to all IMF member countries. trol, Congress and the next Administration should push the IMF bureaucracy—hard—to follow rules- based prescriptions.

ADDITIONAL READING ȖȖ The Heritage Foundation, 2017 Global Agenda for Economic Freedom, August 30, 2016.

CALCULATIONS Although this proposal would likely lead to reduced costs from failed loans and taxpayer bailouts, there is no way of knowing the level of those future savings and Heritage therefore does not include any estimated savings for FY 2018.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 199 200 Ȗ ADDITIONAL READING Administration should the that demand Congress eight years. in approximately billion $60 totaling over period— that contributions annually of total contributor, average of about an one-fifth providing U.N. the system’s remains been largest and has U.S. $312 The over billion of period. more that than total U.N. the received a and 2012, and 2002 between United Nations revenues system tripled nearly RATIONALE 2018. FY in no savings has proposal This organizations. oversight ofIncrease international RECOMMENDATION Increase Oversight ofInternationalOrganizations Ȗ No. 4154, February 26, 2014. 26, February 4154, No. Foundation Rise,” Heritage Revenues U.N. as Accountability and Transparency Increased Demand Should D. Schaefer, “U.S. Brett The Heritage Foundation | Foundation Heritage The ment of State. of ment General the Depart for Inspector of Office the in issues international-organization for unit dedicated a Management establish and and of Office Budget, conducted U.N. be to the by to the system tributions con U.S. requirement for all reporting nent annual aperma enact organizations, international all in conduct participation of acost-benefitU.S. analysis heritage.org 25 Issue Brief Issue - -

- State, Foreign Operations, and Related Programs

ENDNOTES 1. George Russell, “UN’s $5.7B Anti-Poverty Agency Doesn’t Do Much to Reduce Poverty, According to Its Own Assessment,” FoxNews, January 14, 2013, http://www.foxnews.com/world/2013/01/14/uns-55b-anti-poverty-agency-doesnt-do-much-to-reduce-poverty-according- to-its/ (accessed December 28, 2015). 2. Brett D. Schaefer, “Why Does UNDP Continue to Aid Repressive Regimes?” The Daily Signal, August 27, 2010, http://dailysignal.com/2010/08/27/why-does-undp-continue-to-aid-repressive-regimes/. 3. Elizabeth Dickinson, “Case Raises Questions About U.N.’s Role in Zimbabwe,” Foreign Policy, February 22, 2010, http://foreignpolicy.com/2010/02/22/case-raises-questions-about-u-n-s-role-in-zimbabwe/ (accessed February 9, 2017), and George Russell, “Exclusive: UN Still Has Ties that Bind with Bloody Assad Regime,” FoxNews, September 11, 2012, http://www.foxnews.com/ world/2012/09/11/exclusive-un-still-has-ties-that-bind-with-bloody-assad-regime.html (accessed February 9, 2017). 4. George Russell, “UN Agency Blamed After Hundreds of Millions Diverted from Afghan Fund,” FOX News, October 16, 2014, http://www.foxnews.com/world/2014/10/16/un-agency-blamed-after-hundreds-millions-diverted-from-afghan-fund/ (accessed January 26, 2016), and Special Inspector General for Afghanistan Reconstruction, “Despite Improvements in MoI’s Personnel Systems, Additional Actions Are Needed to Completely Verify ANP Payroll Costs and Workforce Strength,” Review of the Law and Order Trust Fund for Afghanistan, April 25, 2011, p. 15, http://www.foxnews.com/world/interactive/2014/10/16/2011-review-law-and-order-trust-fund-for-afghanistan/ (accessed January 26, 2016). 5. Special Inspector General for Afghanistan Reconstruction, letter from John F. Sopko, Special Inspector General for Afghan Reconstruction, to Helen Clark, UNDP Administrator, September 12, 2014, http://www.sigar.mil/pdf/special%20projects/SIGAR-14-98-SP.pdf (accessed January 26, 2016). 6. Diaa Hadid, “Israel Accuses U.N. Worker of Aiding Hamas in Gaza,” The New York Times, August 9, 2016, http://www.nytimes. com/2016/08/10/world/middleeast/israel-accuses-un-worker-of-aiding-hamas-in-gaza.html?_r=0 (accessed February 7, 2017). 7. Office of the Special Inspector General for Afghanistan Reconstruction (SIGAR), letter to OPIC president and CEO Elizabeth Littlefield, .(November 14, 2016, https://www.sigar.mil/pdf/special%20projects/SIGAR-17-13-SP.pdf (accessed February 7, 2017 8. Ryan Young, “The Case against the Overseas Private Investment Corporation: OPIC Is Obsolete, Ineffective, and Harms the Poor,” Competitive Enterprise Institute On Point No. 208, September 24, 2015, https://cei.org/sites/default/files/Ryan%20Young%20-%20The%20Case%20Against%20OPIC.pdf (accessed January 22, 2016). 9. Daniel Briggs, “The Kemp–Kasten Provision and UNFPA Funding,” Americans United for Life, April 23, 2010, http://www.aul.org/2010/04/the-kemp-kasten-provision-and-unfpa-funding/ (accessed January 26, 2016). 10. The U.S. peacekeeping assessment is established in three-year sets (the most recent being for 2016–2018). The specific assessment can fluctuate from year to year within each three-year scale and also when new scales are adopted using updated economic data. In addition, the U.N. peacekeeping budget can change significantly as new missions are established or existing missions are expanded, contracted, or closed. 11. United Nations, “Approved Resources for Peacekeeping Operations for the Period from 1 July 2016 to 30 June 2017,” A/C.5/70/24, June 22, 2016, http://www.un.org/ga/search/view_doc.asp?symbol=A/C.5/70/24 (accessed February 7, 2017). 12. Climate Investment Funds, “About the CIF,” http://www.climateinvestmentfunds.org/cif/node/1 (accessed December 28, 2015). 13. Global Environment Facility, “Adaptation to the Rapid Impact of Glacier Retreat in the Tropical Andes,” http://archive.thegef.org/gef/ project_highlights/SCCF/Andes (accessed November 30, 2016), and Global Environment Facility, “China–Mainstreaming Adaptation to Climate Change into Water Resources Management and Rural Development,” http://archive.thegef.org/gef/project_highlights/SCCF/China (accessed November 30, 2016). 14. Ibid. 15. Intergovernmental Panel on Climate Change, “Activities: Fifth Assessment Report,” November 2014, http://www.ipcc.ch/activities/activities.shtml (accessed December 28, 2015). 16. U.S. Trade and Development Agency, “Our Mission,” http://www.ustda.gov/about/mission (accessed January 12, 2016). 17. Brian Riley and Anthony B. Kim, “Freedom to Trade: A Policy Guide for Lawmakers,” Heritage Foundation Backgrounder No. 3064, October 20, 2015, http://thf-reports.s3.amazonaws.com/2015/BG3064.pdf. 18. U.S. Code Title 22, Section 287e, states: “No funds authorized to be appropriated by this Act or any other Act shall be available for the United Nations or any specialized agency thereof which accords the Palestine Liberation Organization the same standing as member states.” (Adopted as Public Law 101–246 in 1990.) “The United States shall not make any voluntary or assessed contribution: (1) to any affiliated organization of the United Nations which grants full membership as a state to any organization or group that does not have the internationally recognized attributes of statehood, or (2) to the United Nations, if the United Nations grants full membership as a state in the United Nations to any organization or group that does not have the internationally recognized attributes of statehood, during any period in which such membership is effective.” (Adopted as Public Law 103–236 in 1994.) 19. UNESCO, “Key Facts and Figures on the US–UNESCO Cooperation,” p. 6, arrears amount as of August 26, 2016, last updated October 19, 2016, http://www.unesco.org/eri/cp/factsheets/USA_facts_figures.pdf (accessed February 9, 2017). 20. UNESCO Executive Board, “Draft Budget for the Biennium 2016–2017,” 38 C/5, August 12, 2015, http://unesdoc.unesco.org/images/0023/002340/234079e.pdf (accessed December 28, 2015). 21. Brett D. Schaefer, “The U.S. Should Withdraw from UNESCO,” Heritage Foundation Issue Brief No. 760, October 19, 2012, http://www.heritage.org/research/reports/2012/10/the-us-should-withdraw-from-unesco. 22. Committee on Foreign Affairs, U.S. House of Representatives, letter to Secretary Hillary Rodham Clinton, http://freebeacon.com/wp-content/uploads/2012/02/UNESCOletter.pdf (accessed January 12, 2016).

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 201 202 25. 24. 23. increasedtransparency-and-accountability. Brief Brett D. Schaefer, “U.S. ShouldDemandIncreased Transparency andAccountability asU.N. Revenues Rise,” HeritageFoundation https://treaties.un.org/ (accessed February 8,2017). United Nations Treaty Collection, “United Nations Framework Convention onClimate Change,” which suchmembership iseffective.” United Nations to any organization orgroup that doesnothave theinternationally recognized attributes ofstatehood, duringany periodin internationally recognized attributes ofstatehood, or(2)to theUnited Nations, iftheUnited Nations grants fullmembership asastate inthe organization oftheUnited Nations whichgrants fullmembership asastate to any organization orgroup that doesnothave the U.S. Code Title 22,Section 287e states: “The United States shallnotmake any voluntary orassessed contribution: (1)to any affiliated No. 4154, February 26, 2014, http://www.heritage.org/research/reports/2014/02/as-un-revenues-rise-the-us-should-demand- The Heritage Foundation | Foundation Heritage The heritage.org

Issue Transportation, Housing and Urban Development, and Related Agencies 204 fund. improvement airport rural and to EAS the payments eliminating from spending mandatory in million $118 and to carriers,” air “payments eliminating from spending discretionary in million $181 include savings These projections. spending baseline 2016 recent August most CBO’s the in found as authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING half are only typically flights empty: EAS often are that on flights funds federal squanders EAS The intercity buses. such as modes ofby other, transportation, existing, commuters routes served oncould be subsidized despite that is fact the This terms. dollar constant in percent by 600 1996 since increased has on EAS the spending Indeed, airports. subsidies these to in lars of dol continues provide millions to EAS the gram, pro intention atemporary as Despite original its industry. of airline the deregulation the following airports provide subsidies to rural to program atemporary 1978 in as established was EAS The RATIONALE 2018. FY in saves $299 million proposal This program. (EAS) Service Air Essential the Eliminate RECOMMENDATION Eliminate theEssentialAirServiceProgram Ȗ Ȗ Eli Lehrer, “EAS a Complete Waste of Taxpayer Money,” The Heartland Institute, undated. Institute, of Taxpayer Waste aComplete Money,”Eli Lehrer, Heartland “EAS The Foundation Heritage Highway Programs,” for Long-Term Provide and Sustainability Programs Wasteful Cut Should Bill “Senate Sargent, Michael and Michel, J. Norbert Bogie, Justin MANDATORY Issue Brief Brief Issue The Heritage Foundation | Foundation Heritage The No. 4566, May 18, 2016. May 18, 4566, No. - - should authorities, overseen be not or by state local they subsidized, be to routes are certain If EAS. the such as activities, wasteful and market-distorting day. government federal The should not engage in average of 10 an no passengers per more serve than must by EAS the served on dole, the remain airports away. miles 40 just To (Harrisburg) a major airport even travelers to though have access Pennsylvania, and outin Lancaster, of flights daily ue near-empty contin to annually million provides $2.5 EAS the empty. For two-thirds at least example, are that of routes the fly one-third planes nearly and full, the federal government. federal the heritage.org - MANDATORY Transportation, Housing and Urban Development, and Related Agencies

Eliminate the Appalachian Regional Commission RECOMMENDATION Eliminate the duplicative Appalachian Regional Commission. This proposal saves $154 million in FY 2018.

RATIONALE The Appalachian Regional Commission was estab- program directs federal funding to a concentrated lished in 1965 as part of Lyndon B. Johnson’s Great group of 13 states where funds are further ear- Society agenda. The commission duplicates high- marked for specific projects at the community level. way and infrastructure construction under the If states and localities see the need for increased Department of Transportation’s highway program, spending in these areas, they should be responsible as well as diverting federal funding to projects of for funding it. This duplicative carve-out should questionable merit, such as those meant to sup- be eliminated. port “Heritage tourism and crafts industries.”1 The

ADDITIONAL READING ȖȖ Justin Bogie, Norbert J. Michel, and Michael Sargent, “Senate Bill Should Cut Wasteful Programs and Provide Long-Term Sustainability for Highway Programs,” Heritage Foundation Issue Brief No. 4566, May 18, 2016.

CALCULATIONS Savings are expressed as budget authority as found in the CBO’s most recent August 2016 baseline spending projections. Savings include $151 million in discretionary spending and $3 million in mandatory spending.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 205 206 projections. spending baseline 2016 recent August most CBO’s the in found as authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ Ȗ ADDITIONAL READING negative have had onthat impact ridership. customers,” to vice provide reliable to ser struggling also is “Metrorail 2015 2016. to acknowledged that Even Metro has percent one-year 11 from the period in declined has and 2009 since year every plummeted ership has rid Metro Indeed, updates. rail and maintenance set proper routes, and priorities for service mize agency opti control to for costs, tives transit the incen Federal decrease subsidies for WMATA the instability. financial and poor service increasingly by been plagued agency low-performing the has subsidies, local and federal in billions Even with employees,federal system’s pad the which revenues. benefits generousto and transit tion funds formula come addition Administra in Federal to Transit grants These appropriations Congress. from direct receive to authority authority, only transit the is DC’s transit Washington, local WMATA, The RATIONALE 2018. FY in saves $155 million proposal This (WMATA). Authority Transit Area subsidies the for Metropolitan Washington the Eliminate RECOMMENDATION Metropolitan Area Transit Authority Eliminate SubsidiesfortheWashington Ȗ Ȗ Ȗ Ronald Utt, “Washington Metro Needs Reform, Not a Federal Bailout,” Heritage Foundation Foundation Heritage Bailout,” aFederal Not Reform, Needs Metro “Washington Utt, Ronald Transit Agency,” Cato Institute Nation’s Worst-Managed “The O’Toole, Randal aTotal Washington’s MetroIs Not, or Disaster,” Spiral “Death Sargent, Michael 2 and has faced safety concerns concerns safety faced has and The Heritage Foundation | Foundation Heritage The - - - - - employees than any otheremployees when any system adjusted than more it furnishes and systems, rail majorthe urban operate to of per of expensive passenger any mile most the is ro’s system exorbitant rail The costs: due Met largely to is subsidies. This federal and for 2017, hugeshortfall local receiving even after agency’s budget projection shows a$290 million The grim. increasingly looks picture ro’s financial Met come issues as safety ridership and These WMATA into a more effective transit agency. transit amore into effective WMATA the incentives turn to market furthering WMATA, subsidies the to should eliminate Congress system. never likely the use who will taxpayers federal more demand been to money has from strategy WMATA’sthe issues, manifold its of fixing Instead consequence. little with state dilapidated current its it reach to Metro’s allowed and shortcomings Federal have masked subsidies for WMATA the ridership. for heritage.org At Liberty National Interest National , October 1, 2015. 1, , October WebMemo , November 4, 2016. 4, , November No. 1665, October 16, 2007. 16, October 1665, No. - - Transportation, Housing and Urban Development, and Related Agencies

Eliminate Grants to the National Rail Passenger Service Corporation (Amtrak)

RECOMMENDATION Eliminate Amtrak’s federal operating subsidy and phase out the capital programs over five years. This proposal saves $526 million in FY 2018.

RATIONALE The National Railroad Passenger Corporation, Amtrak’s poor on-time performance rates. Amtrak now known as Amtrak, was created by the federal trains were on time only 78.5 percent of the time in government to take over bankrupt private passen- FY 2016. The railroad’s long-distance lines fared ger rail companies. It began service on May 4, 1971. substantially worse, arriving on time less than 50 In FY 2016, it received an operating grant of $289 percent of the time. million and a capital and debt-service grant of $1.1 billion. Since its inception, Amtrak has received Congress should eliminate Amtrak’s operating about $71 billion (in 2016 dollars) in taxpayer-fund- subsidies immediately in FY 2018 and phase out its ed federal grants. capital subsidies over five years to give Amtrak’s management time to modify business plans, work Amtrak is characterized by an unsustainable finan- more closely with the private sector, reduce labor cial situation and management that is feckless at costs, and eliminate money-losing lines. Simulta- improving its performance and service for cus- neously, the Secretary of Transportation should tomers due to hamstringing by unions and federal generate a proposal to privatize Amtrak’s profitable restrictions. Amtrak has a monopoly on passenger routes and turn over responsibilities for state-sup- rail service, which stifles competition that could ported routes to the states. During this phase-out, otherwise lower costs for taxpayers and passengers. Congress should repeal Amtrak’s monopoly on pas- Labor costs, driven by the generous wages and ben- senger rail service, allowing private companies to efits required by union labor agreements, constitute enter the market and provide passenger rail service half of Amtrak’s operating costs. Amtrak trains where they see a viable commercial market. are also notoriously behind schedule, evidenced by

ADDITIONAL READING ȖȖ Tad DeHaven, “Downsizing the Federal Government: Privatizing Amtrak,” Cato Institute, June 2010. ȖȖ Ronald D. Utt, “Chairman Mica’s New Amtrak Proposal Would Use the Private Sector to Reform Passenger Rail,” Heritage Foundation WebMemo No. 3290, June 13, 2011.

CALCULATIONS Savings are expressed as budget authority as found in the CBO’s August 2016 baseline. Savings include $299 million in operating subsidies and $227 million in reduced capital grants (representing a 20 percent reduction in the projected level of $1.137 billion).

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 207 208 spending. mandatory in million $1 and spending discretionary in million $415 include Savings projections. spending baseline 2016 August recent most CBO’s the in found as authority budget as expressed are Savings included. are down MARAD closing from savings the Only CALCULATIONS Ȗ Ȗ ADDITIONAL READING entities.maritime the Finally, connected politically handout to Program—another XI) (Title Loan teed Guaran shipbuilders under U.S. Maritime its hire for to companies guarantees loan taxpayer-backed provides further MARAD efficient or competitive. maythat not be favored firms handout politically to a shipyards, small subsidize ers continue directly to subsidies. For and protectionism example, taxpay it laws implements the in and steeped are MARAD interests. fit special of implement duplicative crony for and laws bene the gency. later, Decades it continues oversee to and national emer a used during be fleetto a maritime maintain to is purpose 1950, in Created MARAD’s RATIONALE Jones Act. included of maritime the for are repeal 2018. No FY savings in saves $416 million MARAD Jones Eliminating Act. maritime the repeal and (MARAD) Administration Maritime the Eliminate RECOMMENDATION Repeal theMaritimeJones Act Close Down theMaritimeAdministration and Ȗ Ȗ Industries,” Heritage Foundation Foundation Heritage Industries,” Maritime-Related in Advantage Competitive America’s Restoring Act: Jones the “Sink Loris, Riley, Nicolas and Slattery, Bryan Brian 17,August 1995. Foundation Heritage of Transportation,” Department the Down to Close “How D. Utt, Ronald CoxWendell and MANDATORY Backgrounder The Heritage Foundation | Foundation Heritage The No. 2886, May 22, 2014. May 22, 2886, No. - - - - roles another agency. to government federal The regulatory international its transferring istration, Admin should Maritime the close down Congress 75 percentleast U.S. the of from crew its with at vessel on U.S.-flagged be aU.S.-built and (or cities must U.S. persons) two between shipped cargo Any able overly and burdensome standards: unreason 1920—requires Jones in Act—established dy programs. dy subsi wasteful Jonesitime MARAD’s and Act mar the Simultaneously, should repeal Congress of Defense. Department the to program foring this fund transfer Fleet and Defense Ready Reserve should government-owned the the sell in ships heritage.org Backgrounder No. 1048, 1048, No. - - - - - Transportation, Housing and Urban Development, and Related Agencies

Eliminate Capital Investment Grants RECOMMENDATION Eliminate Capital Investment Grants, also known as the New Starts Transit Program. This proposal saves $2.229 billion in FY 2018.

RATIONALE Capital Investment Grants were created in 1991 Grant, the project will increase traffic congestion as part of the Intermodal Surface Transportation by blocking a lane and slowing down cars using the Efficiency Act, with the purpose of giving transit road. These projects are perennially over bud- agencies grants for building new transit projects. get, further straining local and federal taxpayers Because New Starts is a competitive grant program alike. A review of federal studies examining the that only funds novel transit projects (not main- last 15 projects that were completed shows that tenance of existing systems) it gives localities the the projects were over budget by nearly 30 percent incentive to build costly and unnecessary transit on average. Worse, the costs for these expensive systems they can ill afford to operate and maintain. rail projects tend to detract funding from more This comes at the expense of maintaining exist- practical services, such as buses needed by low-in- ing infrastructure, exacerbating the already large come residents. maintenance backlogs in many major cities. Congress should terminate funding for Capital Criteria for eligible projects include “congestion Investment Grants. Such a reform should be a part relief,” “environmental benefits,” and “econom- of ending the federal transit program and allowing ic development effects,” but—tellingly—no longer the states and private sector to manage and fund include “operating efficiencies.”3 In some cases, such transit systems where they are truly effective. as when a streetcar receives a Capital Investment

ADDITIONAL READING ȖȖ Randal O’Toole, “Paint Is Cheaper than Rails: Why Congress Should Abolish New Starts,” Cato Institute Policy Analysis No. 727, June 19, 2013. ȖȖ Randal O’Toole, Cato Institute, testimony before the Subcommittee on Highways and Transit, Transportation and Infrastructure Committee, U.S. House of Representatives, December 11, 2013.

CALCULATIONS Savings are expressed as budget authority as found in the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 209 210 projections. spending baseline 2016 recent August most CBO’s the in found as authority budget as expressed are Savings CALCULATIONS Ȗ Ȗ ADDITIONAL READING seawayterritory. opened The 1959. in United States within is that Seaway Lawrence Saint of the part the operating and maintaining with agovernment-owned is charged entity SLSDC the Wiley–Dondero the of through 1954, Created Act RATIONALE 2018. FY Development Seaway in Lawrence saves $29 Saint the million proposal Corporation (SLSDC). This Privatize RECOMMENDATION Development Corporation Privatize theSaintLawrence Seaway Ȗ Ȗ Highway Programs,” Heritage Foundation Foundation Heritage Highway Programs,” for Long-Term Provide and Sustainability Programs Wasteful Cut Should Bill “Senate Sargent, Michael and Michel, J. Norbert Bogie, Justin undated. of Cato Growth,” Institute, Timeline of Transportation, Department Government: Federal the “Downsizing Edwards, Chris Issue Brief Brief Issue The Heritage Foundation | Foundation Heritage The No. 4566, May 18, 2016. May 18, 4566, No. the SLSDC. the should followgress Canada’s privatize example and Con burden reduce the onness and taxpayers. competitive and would encourageU.S. productivity the in kind of this Privatization operation activities. and for maintenance its funding taxpayer future any eliminating 1998, in agency its equivalent ized borders seaway, the also which privat Canada, heritage.org - - - Transportation, Housing and Urban Development, and Related Agencies

Eliminate the National Infrastructure Investment Program

RECOMMENDATION Eliminate the National Infrastructure Investment Program, formerly known as the Transportation Investment Generating Economic Recovery (TIGER) grant program. This proposal saves $518 million in FY 2018.

RATIONALE The National Infrastructure Investment Program Moreover, TIGER grants amount to “administra- provides competitive grants administered by the tive earmarks,” because federal bureaucrats (prod- U.S. Department of Transportation. It began as part ded by powerful Members of Congress) choose the of the 2009 stimulus bill and was intended to be a criteria that a project must meet, and in turn decide temporary program that funded road, rail, transit, which projects will receive grants. That gives cit- and port projects in the national interest. ies perverse incentives to pander to Washington, asking for federal money for a project they may not Eight years later, this “temporary” program has need just to keep another city or state from receiv- proven too tempting a spending opportunity for ing the funds. Congress and the Administration to give up, and has remained a permanent fixture. The TIGER grant program creates perverse incentives for localities, duplicates programs at state and Through TIGER, Washington sends federal dollars local transportation agencies, and squanders feder- to pay for projects that clearly fall under the pur- al resources on local projects that have little to do view of local government and serve no stated federal with interstate commerce. objective. Past projects include a $16 million, six- mile pedestrian mall in Fresno, California; a $14.5 These projects would be more appropriately funded million “Downtown Promenade” in Akron, Ohio; by the local communities that benefit from them. and a $27.5 million streetcar in Detroit, Michigan. Congress should eliminate the TIGER program.

ADDITIONAL READING ȖȖ Baruch Feigenbaum, “Evaluating and Improving TIGER Grants,” Reason Foundation Policy Brief No. 99, April 2012.

CALCULATIONS Savings are expressed as budget authority as found in the CBO’s most recent August 2016 baseline spending projections.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 211 212 spending. mandatory represent savings in billion $3.350 All projections. spending baseline 2016 recent August most CBO’s the in found as airports”) for “grants-in-aid as (listed authority contract as expressed are Savings CALCULATIONS Ȗ ADDITIONAL READING Non-commercial only 27 grants. percent of AIP investment, they receive need for capital greatest have the airports large these travelers. Though percent 90 nearly of serve air U.S. the in airports largest Forthe60 example, less significance. far those to of airports most significant the from es resourc fliers’ scheme redistributes that dle-man amid as functions operate. AIP The can airports govern that how regulations strict to tied are and taxiways, and improvements,ital runways such as cap of “airside” types for used only be certain can grants AIP other activities. aviation as well as ets, tick on passenger airline taxes by federal primarily funded are grants The ments at public-use airports. improve for capital grants provides federal AIP The RATIONALE 2018. FY in billion saves $3.350 proposal This funding. reform airport and Improvement (AIP) Program Airport the Eliminate RECOMMENDATION and ReformAirportFunding Eliminate theAirportImprovement Program Ȗ Foundation Foundation Heritage Funding,” Airport in Role Federal the and Program Improvement Airport the Runway: Rethinking of the “End Sargent, Michael MANDATORY Backgrounder No. 3170, November 23, 2016. 23, November 3170, No. The Heritage Foundation | Foundation Heritage The - - - - - for their services. These reforms would reforms eradicate These for services. their prices market charging from prohibitthat airports regulations reform federal and senger ticket taxes, AIP, the should reduce eliminate pas Congress scheme, redistributive this of continuing Instead revenue—receive about grants. percent 30 of AIP of share trivial thuscontributeand a fliers mercial 1percent of com less than serve airports—which by $3.35 billion in 2018. in billion by $3.35 would reduce spending proposal ket manner. This free-mar and self-reliant, improvements alocal, in capital fund to airports would allow and resources distributionflier of inefficient the inequitable and heritage.org

- - - MANDATORY Transportation, Housing and Urban Development, and Related Agencies

Phase Out the Federal Transit Administration RECOMMENDATION Phase out the Federal Transit Administration (FTA) by putting the agency and its funding level on a five- year phase-out plan. This proposal saves $2.170 billion in FY 2018.

RATIONALE Called the Urban Mass Transit Administration The FTA, a federal agency, has been subsidizing when created in 1964, the agency now known as the purely local or regional activities when it issues Federal Transit Administration provides grants to grants for streetcars, subways, and buses. Tran- state and local governments and transit authorities sit is inherently local in nature, and it would be to operate, maintain, and improve transit systems more appropriately funded at the local or regional (such as for buses and subways). level. Motorists in Montana or Texas should not have to see the gas tax dollars they send to Wash- The federal government has subsidized mass tran- ington diverted to buses and subways when these sit since the 1960s, and it began using federal gas funds should be dedicated to interstate road and taxes (user fees) paid by drivers into the Highway bridge improvements. Trust Fund (HTF) to pay for transit in 1983. The transit diversion within the HTF marks the largest Transit should not be a federal priority, particularly such diversion, accounting for nearly one-fifth of given current federal budget constraints. The feder- HTF spending. The reasons for funding transit al government should phase out the Federal Transit were to offer mobility to low-income citizens in Administration over five years by reducing federal metropolitan areas, reduce greenhouse gas emis- transit funding by one-fifth per year, and simulta- sions from cars, and relieve traffic congestion. neously reducing the FTA’s operating budget by the Yet transit has largely failed in all of these areas same proportion. Phasing out the program would despite billions of dollars in subsidies. Transit use allow state and local governments time to evaluate is concentrated in just six cities: Boston, Chicago, the appropriate role of transit in their jurisdictions. New York, Philadelphia, San Francisco, and Wash- It would also give them the much-needed incentive ington, DC. to adopt policy changes that improve their transit systems’ cost-effectiveness and performance.

ADDITIONAL READING ȖȖ Wendell Cox, “Transit Policy in an Era of the Shrinking Federal Dollar,” Heritage Foundation Backgrounder No. 2763, January 31, 2013.

CALCULATIONS Savings are expressed as budget authority (for discretionary spending) and contract authority (for mandatory spending) as projected for FY 2018 by the CBO’s most recent August 2016 baseline spending projections. Savings represent a 20 percent reduction in projected budget or contract authority, based on a five-year phase-out beginning in 2018. Savings include $23 million in discretionary spending for the FTA’s administrative expenses, and $2.147 billion in mandatory spending for the FTA’s transit formula grants, for a total of $2.170 billion in FY 2018.

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 213 214 3. 2. 1. ENDNOTES December 8,2015). June 19, 2013, http://www.cato.org/publications/policy-analysis/paint-cheaper-rails-why-congress-should-abolish-new-starts (accessed Randal O’Toole, “Paint IsCheaper thanRails:Why Congress ShouldAbolishNew Starts,” Cato Institute docs/100815_4BFY2017BudgetRidershipandRevenue.pdf (accessed January12,2016). WMATA, “FY2017: Ridership andRevenue,” October 8,2015, http://www.wmata.com/about_metro/board_of_directors/board_ ARCProjectGuidelines.pdf (accessed January12,2016). Appalachian Regional Commission, “ARC Project Guidelines,” 2011, http://www.arc.gov/images/newsroom/publications/guidelines/ The Heritage Foundation | Foundation Heritage The heritage.org Policy Analysis No. 727, ------215 A balanced budget amendment toA balanced the U.S. Con amendment budget Once the budget balances,Once the budget be spending should a BalancedToward Move Amendment. Budget a mechaThe is balanced not amendment budget reforms to federal programs as an nor excuse for the that toughavoiding are decisions necessary to a balancedbalance amend Rather, budget the budget. be used to should guaranteement that the hard work reformingof programs cannot be easily in undone the future. stitution is important because can to it bring help less of the adoption of targeted of the adoption of reforms.less This process spur fiscalshould reforms to limit the growth gov in balance. and budget ernment achieve that maintains cappedlevel a at balance, allowing for certain annual run, In the long adjustments. during periods normal activity, of and exi economic absent national securitygent demands, the spending cap grow fastershould no than the and U.S. population stringentlyinflation.more bind when should The cap exceed specific deficits or debt targets. limitationOne the value of a statutory of impos law ing an spending aggregate is that non-interest cap on a future Congress spend Deficit can the amend law. ingalmost over always the current favors generation futurewill who the spending of generations, for pay then, balanceda Ultimately, amend budget today. will ment be necessary to constrain future attempts eliminatingat the spending cap and abandoning fis cal discipline. achievingnism for balance, be viewed not and should Congressby as a substitute making for necessary ensuresthat spending reductions take regard place ------A FEDERAL BUDGET FOR FISCAL YEAR 2018 FISCAL FOR A FEDERAL BUDGET

Blueprint for Balance: Congress fiscal enforce should dis

Spending-cap enforcement by sequestration prom by Spending-cap enforcement Enact a Statutory Spending Enforced by Cap For too many years, For congressional have budgets The budget process provides the frameworkThe budget for ises to spur negotiations to avoid automatic spending automatic ises to avoid to spur negotiations In approach. deliberate a more of reductions in favor legislative of the agreement, absence sequestration economy, revenues, and of interest costs—by the end revenues, economy, the decade, or before. Congress should adopt a statutoryCongress adopt should spending cap that and achieves outlays all non-interest encompasses balance—givenbudget the about current projections Congress to prioritize among competing demands spending caps resources.for Designed properly, curb spending growth excessive run. the long over Sequestration. withcipline spending caps. Spending caps motivate should immediately several reformsshould to key adopt discipline and budget toenforce increase transpar andency accountability in congressional budgeting: legislation. The budget process should serve process should its orig legislation. The budget inal driving of intent mak congressional decision ing toward achieving fiscal sustainability. Congress nal spending and taxing. served as party platforms without implementing well-functioning budget process would encourage well-functioning process encourage would budget fiscal on negotiations debate issues motion set in and congressio thefor trade-offs over considerations and goal guiding of process legislative action. The budget determines the steps that are necessary adopting for changing or adopting and for a budget legislation. A BUDGET PROCESS REFORMS PROCESS BUDGET regular fiscal of debate and issues orderly with the

The Budget Process The Budget Chapter 3: Chapter 216 it possible is and this that resolutions not binding, are out entirely. suchphasing CHIMPs However, budget then and four years, of each next the in used could be on that amount the by placing alimit savings CHIMP false Budgetlimiting Resolutionin step afirst took 2016 Conference (FY) year fiscal The up spending. drives budgeting and congressional in transparency spending. discretionary on evade to limits Congress allow that get gimmicks way, bud are provisions this these in used When ing. spend money, spend will actual therefore increasing that programs to authority spending the redistribute to Congress appropriations allows in provisions bills place. However, wouldspending take these including few therefore recipients and are no for program the authority, spending but been granted there agency has wherethe programs (CHIMPs), affect grams typically pro mandatory in changes provisions, called These spending. reducing budget actually without authority include often reduce mandatory that provisions bills appropriations limits, spending vent discretionary cretionary Spending Limits. reduce taxation. reform and and self-discipline, congressional budgeteral through fed the balance spending, federal cut work and cap to addition avoid, in to hard be to, excuse not current an budget amendment of must abalanced Senate passage ment pay on raises). congressional House Thus, and (theslowest Amend took202 years Twenty-Seventh Amendment on age of voting 18), the the ty-Sixth and four months Twenthan took less ratification (the Thefastest ment-ratification time: take may process constitutional-amend The budget. the balance to enforce requirement the and defense of America; the ensure borrowing; and taxation, spending, trol enterprise. society, free and dom, civil free government, individual limited people through of American the interests the advance will spending spend to government need their government.of federal the Americans scope and size younger the generations expands and burden on enormous puts an financial borrowing not borrow more to continue overspending because economy, should government. America expand and the money spendshrink to fit, they see own their as reduce people’s hikes ability tax because spending continue to over its taxes should not raise America America’s to future. responsibility long-term fiscal Claiming false savings reduces accountability and and accountability reduces savings false Claiming Use the Dis Evade of to CHIMPs Eliminate budget amendment must con balanced The less —because less government—because In an effort to circum effort an In The Heritage Foundation | Foundation Heritage The ------activities whose authorizations of appropriations had had appropriations of authorizations whose activities ers appropriated about and $310 for billion programs appropriation. 2016, FY In unauthorized lawmak an as known is were never this previously authorized, or continue) to which for expired, program the has authorization (thewhose statutory authority legal provide new budgetbills for authority activities appropriation When for activity. that funds federal agencies appropriationthe obligate to allows that precede authorization for activity an a federal that Appropriations. spending. ernment gov in growth unchecked allow that budget gimmicks are Such CHIMPs savings. generate budgetary no real that of CHIMPS use the eliminates permanently that immediately legislation enact should Administration the and Congress sessions of Congress. future in prohibition or reversed waived on could be CHIMPs Part A, will continue at rate, scheduled paid the be to will A, Part Medicare and Security Social such as funds, trust eral from fed their benefitsthat spending authority derive that Under it assumed is scorekeeping current rules, appropriation. an provide to for programs authorized cut funding to would forced be Congress since programs, thorized appropriating money from age Congress for unau would policy discour appropriate. adopted, If this it deems as among re-authorizations may prioritize Congress board, the re-authorizations across ting of cut Instead re-authorized. is level program the if ment up percent 90 to year’s funding of previous the tions. Congress appropria unauthorized of amount by current the provided by Budget the of Control 2011 Act limits ing reformed. or should that eliminated be those and funding federal renewed deserve that programs the identify gress Con helps process authorization The undertake. government federal the that should notfor activities funding eliminate should priorities—and stitutional represent that con federal programs only those rize autho should Congress process. authorization the by required of programs scrutiny congressional careful evades the appropriations, such funding thorized as priorities. ing evades prudent and deliberationrules fund of federal expired. Discontinue Spending on UnauthorizedDiscontinue Spending Modify Scorekeeping Rules for Trust Funds. Funds. for Scorekeeping Rules Trust Modify spend should discretionary reduce the Congress Lawmakers should discontinue funding for unau heritage.org 1 This practice is a violation of congressional aviolation is of practice congressional This

should then provide for adjust acap House and Senate rules require require House Senate rules and ------Chapter 3: The Budget Process

regardless of the ability of the trust funds to pay them. arrangement between Treasury and the GSEs should This practice is inconsistent with most other areas be considered permanent for budgetary purposes. of the federal budget, where budget rules show what Putting the GSEs on budget would enhance bud- will happen when current policies expire. Instead, for getary accountability and transparency by eliminat- trust funds, the baseline assumes that lawmakers will ing the billions of dollars in seeming windfall pay- make changes (that is, transfer additional funds to ments that the Treasury is receiving from Fannie shore up insolvent programs) so that future payments Mae and Freddie Mac, and by confronting Congress can continue to be made fully. Current scorekeeping with the risks of default of GSE-backed loans. Given practices allow these transfers into trust funds to be the GSEs’ current treatment, any profits are counted made without being scored as a spending increase. as offsetting receipts and reduce the reported budget The current scorekeeping rules reduce the per- deficit, while any estimated losses are ignored. This ceived severity of the impending insolvencies that encourages higher spending. Establishing the GSEs the Social Security and Medicare trust funds are fac- as on-budget entities would subject them to the Fed- ing. By assuming that these benefits will continue eral Credit Reform Act of 1990, as is the case for most to be paid in full, current rules ignore the fact that, other federal credit programs. at some point in the not-too-distant future, these Use Fair-Value Accounting for Federal Credit trust funds will face an imbalance that will require Programs. Congress should update the budgetary cuts to benefit payments, or tax increases, or both. If accounting for federal credit programs, governed by Congress wishes to infuse additional funds into the the Federal Credit Reform Act (FCRA) of 1990, to trust funds, the scorekeeping rules should reflect the incorporate market risk. The FCRA specifies that full cost of doing so, and those costs should have to the estimated net costs of federal credit programs on be offset by other spending cuts to prevent further an accrual basis be used for scorekeeping purposes, increasing the already ballooning federal debt. Con- instead of the annual cash flows that happen during gress should act immediately to repair this score- the period of a loan term. For those loans for which keeping convention. the government expects to incur a loss, a subsidy cost Put the GSEs on Budget—Toward Their is used to identify the budgetary impact. Reversely, Elimination. Until their elimination, putting gov- programs that are expected to incur a gain for the government-sponsored enterprises (GSEs) on budget, ernment offset other spending. immediately, to account for the risks that taxpayers How the government estimates whether it will face—and bailouts they fund—from Fannie Mae’s and incur a loss or a gain from a certain federal credit pro- Freddie Mac’s involvement in the mortgage market gram matters. Currently, the government assumes is an important first step. The federal budget should that federal credit programs are just as safe and reflect the net impacts of the programs administered reliable as the payout on U.S. Treasury bonds. This by Fannie Mae and Freddie Mac. underestimates the real market risk associated with The Office of Management and Budget treats the certain loans, which is especially true and worrying GSEs as off-budget entities because they are consid- during economic downturns. The fact that private ered separate private entities under temporary feder- firms and individuals seek loans and loan guaran- al conservatorship. tees from the government demonstrates that they face According to the 1967 Commission on Budget Con- higher capital costs in private markets due to the risk cepts, inclusion of an entity’s assets and liabilities in involved in some of their endeavors. Taxpayers should the federal budget depends on three basic factors: not be on the hook for private borrowing, but as long ownership, control, and permanence. The Treasury as they are, the federal government should at least largely owns and controls the GSEs after taking Fan- account for such borrowing accurately. nie Mae and Freddie Mac under conservatorship in Congress should adopt fair-value accounting to 2008 after the market crash. This arrangement will increase transparency and accountability in the con- continue for the indefinite future, as the agreement gressional budget. Fair-value accounting more accu- lacks an exit clause beyond the vague guidance of rately confronts Congress with the risks it assumes “until the firms reach a sound and solvent condition.”2 and the subsidies it provides through credit programs. The most likely scenario suggests that Fannie This information is crucial for lawmakers when con- and Freddie will remain under government control sidering whether a certain program is in the public’s until Congress changes their status. Therefore, the interest. Since incorporating market risk in estimates

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 217 218 reform of budget the process. need for afundamental the economy—shows U.S. the and budget federal the overwhelm to threatens programs entitlement on automatic as spending and evering more important, grow is discipline budgeting—at when atime fiscal A FIRST STEP in spending. cuts additional necessitating without taxpayers to programs credit thecost of federal reflect better to cap spending Budgetthe Control Act’s discretionary may adjust Congress spending, reported increase would impact budgetary programs’ credit of federal The near-complete breakdown of congressional The Heritage Foundation | Foundation Heritage The - and Freddie Mac. Freddie and operationsfor the Mae of and student Fannie loans including programs, for credit accounting rate federal adoption the and of more transfers; accu fund trust of costs account for to true the scorekeeping rules of revision the current budget as gimmicks; programs mandatory in of changes priations; elimination the appro of unauthorized amendment; elimination the budget enforcedget, by a balanced sequestration; bud federal the limiting away: cap aspending right implementing discipline by a few keyreforms fiscal order greater deliberate and budgetary and regular a journey toward important this begin can Congress heritage.org - - - Chapter 3: The Budget Process

ENDNOTES 1. Congressional Budget Office, “Unauthorized Appropriations and Expiring Authorizations,” January 15, 2016, https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51131-uaea-appropriations2.pdf (accessed January 30, 2017). 2. Mark Jickling, “Fannie Mae and Freddie Mac in Conservatorship,” Congressional Research Service Report for Congress, September 15, 2008, p. 3, http://fpc.state.gov/documents/organization/110097.pdf (accessed January 5, 2016).

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 219

Summary Table of Recommendations 222 For proposals withmultiplelevels ofsavings: (O) One-time savings (M)Mandatory Savings from Recommendations (Page 1of5) TABLE 1 Agencies and Related Administration, Food andDrug Development, Rural Agriculture, SUBCOMMITTEE Agencies and Related Justice, Science, Commerce, Defense Agencies and Related Development and Water Energy Eliminate theMarket Access Program Eliminate Revenue Crop Based Insurance Policies Eliminate theFederal SugarProgram Eliminate the“Heat andEat” Loophole inFood Stamps End Broad-Based Categorical Eligibility for Food Stamps Include Work Requirement for Able-bodiedAdult Food Stamp Recipients Repeal theAgricultural RiskCoverage andPrice Loss Coverage Programs Withhold Funding for Federal Fruit andVegetable SupplyRestrictions Prohibit Funding for National SchoolMealStandards andtheCommunity Eligibility Provision Eliminate theRural Business Cooperative Service (M) Eliminate theRural Business Cooperative Service Eliminate theConservation Technical Assistance Program Repeal theUSDA Catﬁsh Inspection Program PROPOSAL Eliminate Census Bureau Funding for theAnnualSupplemental Poverty Measure Report Eliminate theMinority Business Development Agency Eliminate theEconomic Development Administration Eliminate theInternational Trade Administration Eliminate theHollingsManufacturing Extension Partnership Reduce Funding for theDepartment ofJustice’s Bureau of Eliminate theDepartment ofJustice’s Community Relations Services Reduce Funding for theDepartment ofJustice’s Environmental andNatural Resources Division Reduce Funding for theDepartment ofJustice’s CivilRights Division Eliminate theLegal Services Corporation Eliminate Violence Against Women Act Grants Eliminate Grants withintheOce ofJustice Programs Eliminate theOce ofCommunity Oriented Policing Services End Renewable Energy Mandates intheDepartment ofDefense Reform Allowance the Basic for Housing Reduce Excess Infrastructure Base Return Defense Agencies to 2011 Levels Increase UseofPerformance-Based Logistics Reform MilitaryHealthcare Close Domestic Dependent Elementary andSecondary Schools Combine MilitaryExchanges andCommissaries andReduce Commissary Subsidies Cut Non-Defense Spendingfrom theDefense Department Eliminate DOEEnergy Innovation Hubs Reduce Funding for Energy theDOEBasic Sciences Program Drastically Cut orEliminate theDOEBiologicalandEnvironmental Research Eliminate theDOEAdvanced Research Projects Agency–Energy Program Return Advanced Scientiﬁc Computing Research to FY2008Levels Return Funding for theDOEOce ofNuclearPhysics to FY2008Levels Focus theDepartment ofEnergy’s National NuclearSecurity Alcohol, Tobacco, Firearms andExplosives Program andShiftRemaining Programs to Oce ofScience Administration SpendingonWeapons Programs The Heritage Foundation | Foundation Heritage The heritage.org (millions) SAVINGS Summary Table of Recommendations

TABLE 1 Savings from Recommendations (Page 2 of 5)

SAVINGS SUBCOMMITTEE PROPOSAL (millions) Eliminate the DOE O ce of Electricity Deliverability and Energy Reliability Eliminate the DOE O ce of Energy E ciency and Renewable Energy Eliminate the DOE O ce of Fossil Energy Eliminate the DOE O ce of Nuclear Energy and Shift Remaining Activities to O ces of Science and Civilian Radioactive Waste Management Eliminate DOE Funding for Small Business Innovation Research Energy and Small Business Technology Transfer Programs and Water Liquidate the Strategic Petroleum Reserve and the Northeastern Development Home Heating and Gasoline Supply Reserves and Related Liquidate the Strategic Petroleum Reserve and the Northeastern Agencies (cont.) Home Heating and Gasoline Supply Reserves (O) Auction O the Tennessee Valley Authority (M) Auction O the Tennessee Valley Authority (O) Auction O the Four Remaining Power Marketing Administrations Auction O the Four Remaining Power Marketing Administrations (M)

(Auction O the Four Remaining Power Marketing Administrations (O Eliminate the Small Business Administration Disaster Loans Program Reform the Securities and Exchange Commission Financial Eliminate the Community Development Financial Institutions Fund Services Eliminate the Export-Import Bank and General Government Eliminate the Funding for the Multi-State Plan Program Protect Freedom of Conscience in the District of Columbia Expand the D.C. Opportunity Scholarship Program Eliminate Fire Grants Homeland Reduce Funding for FEMA’s Disaster Relief Fund Security Refocus Science and Technology on Meeting DHS Needs and Using Private Sector Developments Streamline FEMA Grant Programs Eliminate Nine Climate Programs Eliminate Funding for Two EPA Research Programs Reduce EPA Infrastructure Needs Eliminate Six Redundant EPA Programs Reduce Funding for the EPA’s Civil Enforcement Program Reduce Funding for the EPA’s External Civil Rights Compliance O ce/Title VI Reduce the EPA’s Legal Advice on Environmental Programs Eliminate the EPA's Stratospheric Ozone Multilateral Fund Interior, Eliminate the EPA’s Information Exchange/Outreach Programs Environment, Eliminate the Land and Water Conservation Fund and Related Agencies Eliminate the National Clean Diesel Campaign Eliminate Environmental Justice Programs Eliminate the National Endowment for the Humanities Eliminate the National Endowment for the Arts Eliminate Funding for Woodrow Wilson International Center for Scholars Rein in the EPA’s Ozone Standard Allow Development of Natural Resources Prohibit a Net Increase of Federal Lands Eliminate Funding for the John F. Kennedy Center for the Performing Arts

For proposals with multiple levels of savings: (O) One-time savings (M) Mandatory

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 223 224 For proposals withmultiplelevels ofsavings: (O) One-time savings (M)Mandatory Savings from Recommendations (Page 3of5) TABLE 1 Agencies and Related Education, Services, and Human Labor, Health SUBCOMMITTEE Disaggregate MedicaidSpendingby Population Category and Repeal theACA’s Enhanced Federal Funding for theMedicaidExpansion Stop Gerrymandered Bargaining Units Give Workers Time to Make anInformed Choice inUnionElections Stop theNLRBfrom UsingtheJoint Employer Redefinition Halt Implementation ofNew Overtime Regulations Halt Implementation of Occupational Safety and Health Administration Recordkeeping Regulations Halt Implementation oftheUnion-Persuader Regulations Allow K-12 Education Costs asQualified ExpensesUnder529 College Savings Plans Stipulate theUseofFair-Value Accounting Protect Freedom ofConscience inHealthCare Direct theDepartment of Education to Rescind Employment” the“Gainful Continue to Restrict theACA Risk-Corridor Program Funding Redirect Funding from PlannedParenthood to HealthCenters Eliminate Funding for theInstitute ofMuseumandLibrary Services Eliminate Redundant Department ofLaborAgencies Reduce Funding for theDepartment ofEducation Oce for CivilRights Eliminate Competitive andProject Grant Programs andReduce SpendingonFormula Grants Sunset HeadStart to Make Way for Better State andLocal Alternatives Bring National LaborRelations Board Funding inLinewithCaseload Eliminate theCorporation for National andCommunity Service Eliminate SusanHarwood Training Grants Let Trade Adjustment Assistance Expire Eliminate Workforce Innovation andOpportunity Act Job-Training Programs Eliminate JobCorps Privatize theCorporation for Broadcasting Public Reduce Fraud andMarriagePenalties intheEarnedIncome Tax Adopt a More Accurate Inflation Index for SocialSecurity andOtherMandatory Programs Eliminate Supplemental Security Income Benefits for Disabled Children (M) Eliminate Supplemental Security Income Benefits for Disabled Children Modify Medicare Advantage Payment System withaCompetitive, Market-Based System Harmonize Medicare’s Age ofEligibility with SocialSecurity’s Expand Current Threshold for Medicare Income-Related Subsidies Update Medicare Premiums Unify Medicare Physician andHospitalPrograms Convert theCadillacTax to aCaponEmployer-Sponsored HealthBenefits End Provider Taxes inMedicaid PROPOSAL Return Control andFiscalResponsibility for Low-Income Housingto theStates Strengthen Work Requirements intheTemporary Assistance for NeedyFamilies Program Put FederalPut MedicaidSpendingonBudget Regulations Promulgated onFor-Profit HigherEducation Institutions Not Entangled withAbortionServices Credit, andFraud intheAdditional ChildTax Credit The Heritage Foundation | Foundation Heritage The heritage.org (millions) SAVINGS Summary Table of Recommendations

TABLE 1 Savings from Recommendations (Page 4 of 5)

SAVINGS SUBCOMMITTEE PROPOSAL (millions) Eliminate Funding for Special Congressional Subsidies for the ACA’s Health Insurance Exchange Legislative Reduce Funding for the U.S. Capitol Police Branch Eliminate Funding for the John Stennis Center Military End Enrollment in VA Medical Care for Veterans in Priority Groups 7 and 8 Construction, Eliminate Concurrent Receipt of Retirement Pay and Disability Compensation for Veterans Veterans A airs, and Related Narrow Eligibility for Veterans’ Disability Compensation by Excluding Agencies Certain Disabilities Unrelated to Military Duties Stop Paying Federal Employees Who Work for Outside Organizations on the Clock Repeal the Davis–Bacon Act Maintain Existing Deﬁ nition of “Fill Material” and “Discharge of Fill Material” Under Clean Water Act Regulations Limit Application of the Recapture Provision for Dredge-and-Fill Permits Multiple Eliminate Federal Funding for Sanctuary Cities Subcommittees

Prohibit Government Discrimination in Tax Policy, Grants, Contracting, and Accreditation Prohibit Any Agency from Regulating Greenhouse Gas Emissions Prohibit Funding for the “Waters of the United States” (WOTUS) Rule Enforce Data-Quality Standards Withhold Grants for Seizure of Private Property End Funding for the United Nations Development Program Eliminate the Overseas Private Investment Corporation – Eliminate the Overseas Private Investment Corporation (M) Eliminate Funding for the United Nations Population Fund Enforce Cap on United Nations Peacekeeping Assessments Return the United Nations Relief and Works Agency for Palestine Refugees in the Near East to Its Original Purpose State, Foreign Eliminate Funding for the Paris Climate Change Agreement Operations, and Related Eliminate Funding for the Global Environment Facility Programs End Funding for the United Nations Intergovernmental Panel on Climate Change Eliminate the U.S. Trade and Development Agency Enforce Funding Prohibition for the United Nations Educational, Scientiﬁ c, and Cultural Organization Maintain the Prohibition on Funding United Nations Organizations that Grant Full Membership to the Palestinian Territories Oppose Bailouts for the International Monetary Fund and Insist on Rules-Based Lending Increase Oversight of International Organizations Eliminate the Essential Air Service Program Transportation, Eliminate the Essential Air Service Program (M) Housing and Urban Eliminate the Appalachian Regional Commission Development, Eliminate the Appalachian Regional Commission (M) and Related Agencies Eliminate Subsidies to the Washington Metropolitan Area Transit Authority Eliminate Grants to the National Rail Passenger Service Corporation (Amtrak)

For proposals with multiple levels of savings: (O) One-time savings (M) Mandatory

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 225 226 and theO ce ofManagement andBudget. SOURCE: HeritageFoundation calculations usingdata from various governmental agencies For proposals withmultiplelevels ofsavings: (O) One-timesavings (M)Mandatory Savings from Recommendations (Page 5of5) TABLE 1 Agencies (cont.) and Related Development, and Urban Housing Transportation, SUBCOMMITTEE Phase OuttheFederal Transit Administration (M) Phase OuttheFederal Transit Administration Eliminate theAirportImprovement Program andReform AirportFunding Eliminate theNational Infrastructure Investment Program Privatize Lawrence theSaint Seaway Development Corporation Eliminate CapitalInvestment Grants Close Down theMaritimeAdministration andRepeal theMaritimeJonesAct (M) Close Down theMaritimeAdministration andRepeal theMaritimeJonesAct PROPOSAL The Heritage Foundation | Foundation Heritage The heritage.org heritage.org (millions) SAVINGS Appendix 228 Congress may berequired to provide supplemental appropriations to make upthoseamounts. Blueprint for Balance, whichwillgo toward defense modernization andreadiness. Intheabsence ofrealizing thesavings proposed by thisbudget, * Fully fundingdefense isatop priority. The FY2018 numbers reflect basedefense budget authority after accounting for savings proposed withinthe How HeritageBlueprint for Balance Compares to CBOProjections APPENDIX TABLE 1 Medicaid and Other Medicaid andOther Medicare Social Security HERITAGE BLUEPRINT—OUTLAYS BY MAJORCATEGORY (BILLIONS) Debt Heldby thePublic HERITAGE BLUEPRINT—DEBT HELDBY THEPUBLIC Total Outlays Net Interest Global War on Terrorism Non-Defense Defense* Discretionary (Base) Debt Heldby thePublic Debt Heldby thePublic HERITAGE BLUEPRINT VS. CBO:DEBT HELDBY THEPUBLIC Defi cit/Surplus Revenue Outlays HERITAGE BLUEPRINT VS. CBODEFICITS (BILLIONS) Defi cit/Surplus Revenue Outlays HERITAGE BLUEPRINT—PROJECTED DEFICITS (BILLIONS) Debt Heldby thePublic Mandatory (in BillionsofDollars) Domestic Product) (as Percentage ofGross (in BillionsofDollars) Domestic Product) (as Percentage ofGross – – – – – – – – – – The Heritage Foundation | Foundation Heritage The – – – – – – – – – – – – – – – heritage.org – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – n a n a n a n a Appendix

NOTES: Social Security. This blueprint recommends increasing the eligibility Net Interest. Total net interest is based on changes in the primary age for Social Security’s retirement program and then indexing it for defi cit relative to the CBO’s January 2017 baseline as well as interest longevity; transitioning the payment to a fl at, anti-poverty benefi t rates under the CBO’s January 2017 baseline. Figures may not sum to focused on individuals who need it most; and replacing the current totals due to rounding. Source: Heritage Foundation calculations based cost-of-living adjustment with the more accurate chained consumer on data from the Congressional Budget O ce’s January 2017 baseline. price index. Also included are implementing a fl at, anti-poverty benefi t Figures are for fi scal years. for Social Security’s Disability Insurance (SSDI) program; eliminating Discretionary (Base). The proposal assumes that the separate Supplemental Security Income (SSI) benefi ts for children; and enacting spending caps for defense and non-defense discretionary spending are SSDI reforms that will improve the program’s e ciency and integrity. replaced with an aggregate spending cap. However, defense spending We expect these policies to generate savings of approximately $670 is assumed to grow at an accelerated level from FY 2018–2019 and then billion over the FY 2018–FY 2027 period. To achieve a similar level of by infl ation each year from a base level of $600 billion in FY 2017 (total savings to the fl at benefi t, policymakers could also adopt progressive budget authority for defense in FY 2018 is $632 billion, outlays are price indexing of the primary-insurance-amount (PIA) factors, $597). Non-defense discretionary spending is adjusted for the savings beginning with newly eligible benefi ciaries, and reduce benefi ts for provided in the proposals found in Chapter 2 of this book as well as individuals with signifi cant modifi ed adjusted gross incomes from non- budget process reforms identifi ed in Chapter 3, based on levels from the Social Security sources. Budget Control Act prior to its 2015 amendment. Medicare. The Medicare estimates assume a two-stage approach Global War on Terrorism. The Overseas Contingency Operations (OCO) to fi xing the program’s fi nancing. The fi rst stage involves adding funds for FY 2018 are based on the FY 2017 level from the Bipartisan catastrophic protection to Medicare coverage, reforming Medicare’s Budget Act of 2015, while OCO funds for the rest of the period assume cost-sharing arrangements, creating a new temporary premium for that spending will be phased out over several years and funded within Medicare Part A, increasing the benefi ciaries’ share of the premium for the base defense budget. Medicare Parts B and D from 25 percent to 35 percent, and phasing Revenues. We use the Congressional Budget O ce’s most recent out taxpayer subsidies completely for individual seniors with signifi cant baseline revenue projections with the exclusion of approximately $1.05 modifi ed adjusted gross incomes. The fi rst stage includes indexing trillion in revenues associated with the A ordable Care Act. Our budget the eligibility age. The second stage of the Medicare proposal involves estimates are on a static basis and do not take into account the positive

ects that would likely occur as a result of the reductions intransitioning to premium support over a ﬁ ve-year period. economic e Medicaid and Other Mandatory. All other mandatory spending falls federal spending and taxation. On a dynamic basis, it is likely that these under the aggregate spending cap, which is estimated by assuming positive feedback e ects would result in a balanced budget sooner than that spending on the major mandatory programs is consistent with their 2024. level over the past business cycle adjusted for population growth.

SOURCES: Heritage Foundation calculations based on data from the Congressional Budget O ce’s January 2017 baseline. Figures are for ﬁ scal years. heritage.org

Blueprint for Balance: A FEDERAL BUDGET FOR FISCAL YEAR 2018 229

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