Amtrak, AIDS: Spending Dilemma : Government Must Shift Priorities From Past to Present
A few personal traditions endure. One of mine is attacking Amtrak. Every year I argue that it’s an unconscionable waste of public funds and urge--usually echoing the President’s budget--the end of government subsidies, which would probably be the end of Amtrak. Congress has yet to oblige. In 1987 Amtrak will receive an estimated $640 million in subsidies; the federal investment since Amtrak’s start in 1971 exceeds $12 billion.
Our budget-deficit debates are not about whether government should be bigger or smaller. They are mostly about whether government can be responsive--whether it can meet new needs or is tightly bound to the past. Government spending reflects patterns set in the 1960s and ‘70s, as if little had changed and all programs had succeeded. Past programs have constituencies that overwhelm present and future needs.
We now spend roughly as much on Amtrak as the President proposes to spend on AIDS in his 1988 budget. Yet Amtrak serves no important national need. It carries less than 0.5% of all intercity travel. Its passengers are concentrated in the Northeast, and if Amtrak didn’t exist, almost everyone would travel by car, bus or plane. Amtrak enthusiasts trivialize government. Their pet program is a subsidized frill.
By contrast, AIDS--among our most pressing public health problems--is clearly a vital responsibility of government. We will need to spend more on the disease in the future, and may not now be spending enough. A recent study by the National Academy of Sciences recommended sharp increases in spending for both research and public education; by 1990 it proposed total spending of $2 billion. And it warned that, if the disease isn’t soon mastered, treating its victims will cost many times that.
AIDS is also instructive because almost no one had heard of it five years ago. New needs for government emerge constantly, and many of them are unpredictable. But government’s ability to meet them inevitably collides with the huge deficits. The failure to eliminate past mistakes penalizes the future.
The outlines of the political stalemate are now familiar. The President proposes deep cuts in domestic spending. Congress responds that a tax increase is needed. The President refuses. Congress then uses his refusal as a pretext for ignoring his spending proposals. Instead, it cuts defense and basically retains existing domestic spending. Huge deficits persist.
True, a growing economy tends to cut the deficits by expanding the tax base. As personal income and profits increase, constant tax rates raise more revenues. With an annual economic growth of about 3%, budget deficits decline--both in absolute terms and as a percentage of the gross national product--if Congress does nothing.
But the weakness of these “baseline” projections lies in their assumptions: no new spending programs (today’s programs are adjusted for inflation and natural increases in beneficiaries), no recession and lower interest rates. In short, the assumptions are optimistic economics and status quo government.
Two arguments are usually advanced against cutting programs like Amtrak.
The first: Taxes could be raised. But the public’s willingness to be taxed is limited, and higher taxes can’t be justified for low-priority or ineffective programs.
The second: Programs like Amtrak are too small to matter. In a trillion-dollar budget, Amtrak subsidies total less than 0.1% of federal spending. Defense spending, so-called entitlements (led by Social Security and health care) and interest on the federal debt represent more than 80% of spending. All this is true. But, together, small unnecessary programs--including many farm programs--total $30 billion to $40 billion, which is a significant part of the deficit.
The practical test of unneeded programs is a question that is posed by Sen. Pete V. Domenici (R-N.M.): If a program didn’t exist, would we now create it? Would we pay farmers $1 billion to produce milk that no one wants? Would we spend $160 million to subsidize local theater groups and others through the National Endowment for the Arts? Would we spend $500 million to subsidize a tiny, unrepresentative group of small businesses through the Small Business Administration? Would we subsidize rail passengers?
The answer is that few, if any, of these programs would be enacted today because Congress would find them hard to justify. They survive because Congress hasn’t subjected existing programs to a rigorous test of national need. Not that these are easy decisions. In some cases--farm programs, for example--the abrupt withdrawal of federal support would be wrenching and undesirable. Some programs should be phased out to ease the shock. But the process has got to be started.
In general, Congress hasn’t. Too many constituents would be upset, and too many members of Congress would lose power. The result is government looking backward, not forward. The President has once again proposed that Amtrak be eliminated; once again its chances of survival look good. And, sadly, I will probably write this column again next year.
