Independence Day Call to Rid Subsidy Dependence

Weekly WastebasketIndependence Day Call to Rid Subsidy DependenceCelebrating responsibly.

The Fourth of July is a time for celebration and enjoyment. When you’re a budget wonk, however, you can’t help but see the funds behind the festivities. With an $896 billion deficit and $22 trillion debt, it’s time to make the Fourth just a bit more fiscally responsible.

Old Glory – Ever since Betsy Ross sewed the first one in 1776, the American flag has been a major part of our Fourth of July celebrations. Since 2014, all flags purchased by the Pentagon must be compliant with the Berry Amendment. The provision, originating during World War II, requires the Department of Defense to purchase certain textile products, including thread, zippers, and other fasteners from U.S. manufacturers. While you may think paying a bit more for a U.S. manufactured U.S. flag is fine, the explosion of “Buy American” provisions is more about parochialism than patriotism. Other items Congress has or is attempting to deem so critical as to require purchase from domestic manufacturers, include ball bearings, anchor and mooring chains, sneakers, wool coats, forks, plates, commemorative coins, and the classic tuna fish sandwich. The Pentagon should buy the best product at the best price. Requiring the troops use a product that happens to be made in your district? That’s a little fishy.

Beaches – If you’re headed to the coast, you can likely watch your tax dollars wash into the ocean. Every year, the U.S. Army Corps of Engineers mines sand offshore and pumps it onto beaches. Many of these “beach nourishment” projects have been churning sand, and tax dollars, for 50 years. In 2014 Congress gave some of them a 15-year extension and the Corps is expected to pour $60 million more into this folly. Better to leave this to local communities like Ocean City, NJ, set for its 9th nourishment in 25 years, that reap the benefits.

Fire up the Grill – Whether you light up hardwood charcoal or despoil your food with enjoy the convenience of propane, your grill could be sending tax dollars up in smoke. Taxpayers don’t get a fair return on the resources extracted from our public lands. The country is losing millions of dollars on federal timber production, particularly in Alaska’s Tongass National Forest. The Forest Service spends a lot more to administer timber sales than it receives in revenue from the sales – on average about $30 million per year. And oil and gas development isn’t any better. We released a new report last week highlighting the 86.6 billion cubic feet of natural gas wasted during production on federal lands in New Mexico alone over the last decade. That gas, which was vented or flared into the atmosphere, is mostly methane and was worth an estimated $320 million. For all that, the Department of Interior reports that only a paltry $20 million in royalties was collected on it. And that doesn’t even get to the issue of the liabilities and cost resulting from these wastes.

Trump administration cuts royalty payments for oil companies

Barbecue – Whatever you throw on the grill, federal agricultural subsidies mean you paid more than you realize. To the tune of at least $8 billion a year, taxpayers subsidize highly generous insuranceon everything from almonds to oysters. Programs covering “shallow” dips in anticipated revenue for a select group of crop growers – programs promised to save taxpayer dollars – are now at least $10 billion over budget. And additional “emergency” subsidies have added another $5 billion. With USDA set to unleash another $14.5 billion in “temporary” subsidies to cover lost sales from foreign tariffs during this “easy-to-win” trade war (this is the second year for the “temporary” program), it makes federal farm policy tough to swallow.

Parades – Old-fashioned cars, convertibles, and fire trucks driving at 5-miles-an-hour use lots of gasoline. Unfortunately, the revenue generated by the federal gas tax, last increased in 1993, is woefully short of the amount lawmakers want to spend. In response they have abandoned the “user pays” principle and raided the Treasury. Since 2008, nearly $150 billion has been transferred from the general Treasury to bailout the highway trust fund. And the gulf will only get larger. CBO warns that a six-year highway bill reauthorization will need to find $97 billion on top of the existing gas tax.

Patriotism – In this case, yet another kind of parochialism dressed up as anti-Russian patriotism. If you can believe it, the lobbyists who want to keep shipping Pennsylvania coal to power a U.S. military base in Germany are still at it. This indefensible, decades-long boondoggle is now touted as needed to keep the Russians from supplying the power. Luckily, Rep. Jared Huffman (D-CA) is back on the case with an amendment to kill this provision in the annual Pentagon policy bill.

Fireworks – There’s perhaps nothing more quintessentially American than fireworks on the Fourth. There’s also perhaps nothing more illustrative of the folly of the president’s love of tariffs than the fact that fireworks are about to be 25 percent more expensive. Tariffs aren’t going to produce better trade deals and a more accountable China. But they will cause a lot of pain and suffering in their wake. Congress and the president should instead work with our allies to demand China, and everyone else, plays by the rules.

Enjoy your 4th! Happy 243rd birthday, America! But on the 5th join us to rein in the hangover of wasteful spending, programs, and policies.

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