
By Steve Levy
An interesting opinion piece was submitted to the New York Post last week advising Republicans on how to successfully cut the budget. The proposal mirrors the same advice I’ve been given for quite some time.
The author, former White House Counsel Daniel Huff, lauded the valiant efforts of Elon Musk and DOGE, but concluded it was bound for failure because it acted as an outside agency seeking to impose its will on various departments.
Huff is exactly right that these department heads get their dander up and don’t like outsiders telling them what to do. I experienced that when I was a county executive in Suffolk County, facing a severe recession after the real estate collapse in 2007.
We needed to trim the budget and trim it fast. In prior years, we would experience increases in sales tax revenues exceeding 9%. In these particularly rough years, we were losing 9% a year. That’s a delta of 18% in lost revenues.
So the first thing I did was put the order out to every department head to trim 10% of its budget. We left it to them to trim the fat, or at least to keep the most efficient items while ditching the least.
Many of them moaned, but ultimately they acceded to the orders of their superiors. They did so knowing that the order came from the duly elected county executive who appointed them rather than a third-party bureaucrat like themselves.
The bottom line is, they complied. And where they did not, I stepped in and made the cut myself. At that point they had no moral high ground on which to complain.
In Washington, we saw some department heads such as Environmental Protection Agency Administrator Lee Zeldin take the initiative on his own. Unlike many department heads who seek to grow their fiefdoms and protect every last dollar, Zeldin came with the mission of streamlining the agency to make it as efficient as possible. Secretary of State Marco Rubio did the same. That’s the way it should work.
My cost-cutting order was not limited to one year. We did the same 10% cut over the next two years, resulting in a 30% cut to these agencies. Much of it was simply weeding down excessive staff through attrition, thereafter shifting people around to get the same work done with fewer people.
Of course, these types of cuts cannot go on forever. Ultimately, on the federal level, what’s needed is structural change. That includes a balanced budget amendment that forces prioritization amongst our lawmakers.
It’s amazing how much easier it is to say “no” to a special interest group wanting additional money when the lawmaker can say he’s restrained from adding it because of caps imposed on his spending capabilities.
On Long Island, we were experiencing annual school tax increases averaging 6% in the years leading up to our property tax cap. In the decade that followed, that 6% dropped to 2% a year.
DOGE made a valiant effort, but most came to realize that, if we really want to curb the humongous spending appetite of the federal government, we must deal with entitlements and mandated spending.
One mandated category is interest on the debt. It has grown exponentially and is now at 13% of the budget, a figure larger than defense. That beast can be tamed with a better economy, spending controls and lower interest rates that will come about when spending is actually controlled. For every one percent drop in the interest rate, hundreds of billions of dollars are saved paying for this debt.
Medicaid has grown well beyond its original plan back in 1965 to deal with those under the poverty line. It now encompasses those well above the poverty level and it’s also including illegal immigrants and those who refuse to work.
The Republicans’ efforts to reform this program to save it are laudable. Regarding Social Security, there’s a rather easy fix. As our Center for Cost Effective Government paper noted this spring, investing a portion of the trust fund in a conservative Standard and Poor index fund can quadruple the rate of return within the fund, thereby saving it from collapse.
As to all other mandates, elected officials on both sides are uneasy about putting their toe in the water. That’s because the slightest talk of cuts or reforms will be met with the opposition and the media claiming they’re trying to kill grandma. The solution is to create a bipartisan panel of six individuals — three Democrats, three Republicans — who will issue a solution to save these programs.
But no white paper will be issued unless there is an affirmative vote of four members, two of whom hail from each of the two parties on the panel. This gives cover to both sides moving forward.
And if they’re still scared to take affirmative steps, they can mirror what was done with closing military bases after the collapse of the Iron Curtain. Create another BRAC commission, in which Congress authorizes the independent commission to make the cuts they won’t, with the proviso that Congress will have the ability to undo the cuts through an affirmative vote on the floor.
DOGE put us on the right track, but we need to take more practical steps to actually effectuate significant cuts by the departments themselves.
Steve Levy is Executive Director of the Center for Cost Effective Government, a fiscally conservative think tank. He served as Suffolk County Executive, as a NYS Assemblyman, and host of “The Steve Levy Radio Show.”