published Mar 17th 2017, 3:09 pm, by Megan McArdle

(Bloomberg View) —
The reaction to Trump’s budget has been, let us say, loud, with headlines blaring about cuts to poverty programs and social media going viral with angry denouncements of the White House budget chief who proclaimed that cutting meals on wheels was compassionate … to taxpayers. There have been some problems with these analyses, starting with the fact that the Meals on Wheels allegation was not, well, true. But broadly this is correct: the proposed budget does represent a fairly substantial transformation of government spending priorities.

The first thing to note about this budget is that if you’ve taken entitlement reform off the table — and Trump has displayed no interest whatsoever in grabbing onto the third rail of American politics — then this is where any major budget changes are going to occur: in the roughly one-third of federal spending that is discretionary, which is to say, allocated annually by budget appropriation, rather than distributed automatically to anyone who qualifies for the program. And unless you are willing to raise taxes — another move that Donald Trump has shown no interest in — then if you think the government should spend more money in one area, some other areas are going to get less.

Trump wants to spend more money on transportation, homeland security, and the military, so he has to cut other stuff. The result has been called antediluvian in many quarters, but you don’t need to go back quite that far in history. In fact, with this budget, Trump is not even seeking a return to the (lightly fictionalized) laissez-faire ideology of the nineteenth century, or the version often attributed to modern libertarians. What he is doing is reframing the focus of government: away from people abroad and towards people at home, largely away from blue-state concerns and towards red-state ones. And he is trimming back, though far from eliminating, the post-1960s attempt, sadly as-yet-unsuccessful, to micromanage poverty out of existence.

Conservatives are often accused of “hating government”, and some do. Still, there is a coherent and compelling center-right analysis that doesn’t simply blindly oppose federal spending, but asks of it a few questions:

Can the government actually make this problem better? If so, must this problem be solved at the Federal level, or could it be done as easily or better by the states? Even if the government might help solve this problem, would the associated costs in terms of loss of freedom, deadweight losses from regulation or taxation, and the declining accountability and manageability of government as it grows, actually be worth the benefit?
Many government programs currently in existence pass this test. Many on the list of programs and agencies scheduled for cuts do not. I mean, I like the arts. I adore NPR and PBS. But why should some carpenter in Akron who prefers “Duck Dynasty” to “Downton Abbey” be paying taxes so I can enjoy these things? In other cases, I would be willing to bet that the net long-term effect on the welfare of anyone other than those receiving government-funded paychecks was probably close to zero. Then there are the programs which might make sense in some form, but are indefensible as they currently exist. You can make an argument for community development block grants, in terms of developing poor parts of the country that need extra help. But it cannot possibly make sense to offer these grants in every state, even those that are net contributors to the federal budget. Yes, I understand the political arguments for such things — easier to get New York and California legislators to vote for it. As a policy matter, this is nonsensical.

While America’s libertarian streak is often wildly exaggerated, this much is not: most people don’t like the idea of a government that runs a zillion programs they have never heard of, to help some special interest they’ll never meet, and which have little accountability for actually generating results. This structure is a recipe for a lot of such programs.

And by cutting so broadly, the Trump administration may, ironically, have more hope than most of actually getting rid of the things that federal government should not be doing. It is reminiscent of the 1986 Reagan tax reform, widely viewed as a model for those who want to broaden the tax base: rather than trying to tidy up the wild proliferation of tax exemptions that had grown up since the inception of the federal income tax, they went after all of it at once. In the resulting melee, there was simply not enough bandwidth for all the lobbies to make their case; congressmen have only so many hours in the day.

That said, while there is a coherent conservative argument to be made for many of these cuts, I would not go so far as to say that the budget as a whole has a coherent conservative logic.

While I am probably friendlier than most libertarians to high levels of military spending, I do not see a pressing need to make them higher still. Some of the EPA cuts look like ideological warfare more than a carefully-thought-out program of agency reform, as does the somewhat inexplicable decision to eliminate the Chemical Safety Board, which investigates chemical accidents and makes recommendations for avoiding them in the future. I reached out to Chemjobber, a Ph.D. industrial chemist who blogs on the chemical industry, to get a sense of whether this was a necessary-sounding agency that is actually redundant or useless. Here’s the quite emphatic response I got: “Only CSB is about ‘how do we build plants that 1) make chemicals and 2) don’t experience routine process upsets and how do we operate [those] plants safely.’ I don’t think CSB’s engineering expertise can be repeated anywhere else and done in the national interest.”

This is the sort of thing that the federal government should be doing, because there are great economic benefits in having national standards for companies that operate across state lines, and great economies of scale in developing this sort of research and expertise once, rather than trying to duplicate them fifty times. Similar arguments hold for scientific research, controlling pollution (no respecters of state lines), and space exploration. These things have a clear goal, that goal is worthwhile, and it is best achieved at the federal level. Conservatives should be no happier than liberals if they go.

Other cuts don’t go nearly far enough to satisfy this libertarian: the Small Business Administration, for example, does not need a few programs scaled back; it needs to be eliminated, because it doesn’t seem to do much good.

Overall, while a frontal attack on America’s ever-proliferating Federal programs should gladden the heart of conservatives and libertarians, the budget as a whole should not, because it isn’t really a small government budget; it’s just a poke in the eye to blue states. As a lifelong blue-stater myself, I concede that we have given as good as we got in the culture wars, and if I lived in a red state, I might well be longing to take a poke at me too. But with the exception of spending on national defense, poking your enemies in the eye is one more thing that is not really the proper job of the federal budget.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of ““The Up Side of Down: Why Failing Well Is the Key to Success.”

To contact the author of this story: Megan McArdle at mmcardle3@bloomberg.net To contact the editor responsible for this story: Mike Nizza at mnizza3@bloomberg.net
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