With President Trump’s initial federal budget proposal eliminating dollars for the Corporation for Public Broadcasting, expect that yellow blob of a funster, Big Bird, to take to the streets to protest this unconscionable attack on him and his pals over at Sesame Street. That will be just a small part of the howls and screams that will emanate from recipients of governmental largess from federal programs targeted in Trump’s fiscal blueprint.
Big Bird and Sesame Street serve as a vivid illustration of the challenge posed by federal discretionary spending. Back in 1969, when there were just three national television networks, perhaps federal subsidies for specialized television programming could be justified. Today, with endless television channels and cable shows, including abundant children’s programming, it doesn’t make sense. Also, in 1969, when Sesame Street began, the U.S. economy wasn’t shouldering a nearly $20 trillion debt load, as it is today.
Those distinctions won’t likely sway liberal critics who seem to think that if it is a worthy cause it is a worthy federal expenditure. Trump wants to kill a host of federal programs he deems wasteful, unnecessary, and reflective of a government lacking in fiscal discipline. He’s right. But the counterforces will be immense; the battles will be intense. This will be a drama worth watching.
One argument of resistance will be that these “discretionary” accounts are so small within the context of the overall federal budget as to be meaningless. There’s some truth in that, reflecting the ominous fact that “entitlement” spending—the accounts that are mandated by ongoing laws—is poised to flip out of control. In fiscal 2015, discretionary spending made up only 30 percent of the budget, with defense spending consuming 54 percent of that. Mandatory spending reached nearly 65 percent. (The rest is interest on the massive national debt.)
Trump wants to give the Pentagon an additional $54 billion in budget authority, offset by cuts in domestic spending. As the Wall Street Journal points out, this represents only a 3 percent increase in defense spending over Barack Obama’s final budget proposal. It constitutes a shift of only 1.35 percent of spending in the $4 trillion federal budget. But this crystallizes the reality that the real budget problem is entitlement spending—Social Security, Medicare, Medicaid, veterans benefits, etc. Domestic discretionary spending doesn’t offer much leeway for major cuts.
But that doesn’t mean we should just leave it alone. There’s a lot of waste and unjustified spending in those accounts, and Trump has targeted a large chunk of it. Most of these accounts are in the millions of dollars, not billions, but they still need scrutiny. Why, for example, are we spending $30 million in seed capital and technical advice to community enterprises in Africa? Why do we have special regional programs to funnel funds to favored groups in Appalachia, New England, Alaska, or the Mississippi Delta? Why should federal dollars go to support local libraries around the country to the tune of $230 million?
And why should the federal government spend nearly $63 million to connect U.S. businesses with opportunities in emerging markets to promote U.S. foreign policy? Can’t these U.S. businesses find their own opportunities in emerging markets, and isn’t the promotion of U.S. foreign policy the domain and responsibility of the State Department?
Beyond Trump’s specific fiscal targets for elimination, others deserve special scrutiny. Consider the International Trade Administration, which Money magazine says spends half a billion bucks a year to help American businesses sell more products to overseas markets. Money reports, by way of defending these expenditures, that one beneficiary was the Iron Fist Brewing Company of Vista, Calif., which encountered federal assistance personnel at a convention in 2013 and soon had the way paved for exporting beer to Australia, Canada, Finland, and Hong Kong, among other overseas locations. Says Money: “Iron Fist hired two more employees thanks to new export revenue, the ITA reports.”
This sounds like pure crony capitalism—the federal government taking under its wing favored enterprises and giving them help that they shouldn’t need if they are operating on their own as viable businesses. The same can be said about the Manufacturing Extension Partnership ($142 million), which helps small to medium-size manufacturers “become more efficient, build new products, and improve sales and marketing techniques.” Money tells the story, which it seems to find inspiring, of Montana-based Botanie, an organic soap wholesaler. It sought federal help through the MEP in developing more sophisticated technologies to track inventory. “The MEP says it helped Botanie save $280,000 and retain six jobs,” writes Money.
The magazine doesn’t say what kind of disadvantage this special favoritism may have created for Botanie’s competitors.
Which bring us back to Big Bird and Sesame Street, which actually have been doing it right. As far back as the 1980s, when the Reagan administration targeted public television spending, Sesame Street’s nonprofit parent organization, the Children’s Television Workshop (later the Sesame Workshop), developed new market-based revenue sources, including product licensing, foreign broadcast income, and a magazine. More recently, it entered into a deal with HBO in which the premier cable channel will get first access to Sesame Street programming for nine months before it goes to PBS.
Sesame Street co-creator Joan Ganz Cooney said her organization needs to “fund our nonprofit mission with a sustainable business model.”
Good thinking. So the next time you see Big Bird out there protesting cuts in federal funding for public broadcasting, ignore him. Big Bird doesn’t need the money, and neither do so many other organizations grabbing special privileges and advantages through access to the federal largess pool.
Robert W. Merry, longtime Washington journalist and publishing executive, is editor of The American Conservative. His next book, due out from Simon & Schuster in September, is President McKinley: Architect of the American Century.