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Issue Position: Reining in the Federal Bureaucracy

Issue Position

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The expansive government bureaucracy has metastasized in numerous ways. First, the federal government maintains too many overgrown, centralized departments that do little to support American individuals. Instead of maintaining massive bureaucracies and consolidating in Washington, our federal agencies should serve individuals and states. The IRS alone maintains over 94,000 federal employees simply to process and enforce our overburdening tax code, while other departments remain intent on dictating out-of-touch policy about our schools, communities, businesses, and our environment from Washington.

Second, there is simply too much money spent in Washington, D.C., and too little left with the states to serve their individual and diverse populations. Federal spending has nearly doubled in the last decade, with a 93 percent increase in spending over the same period.The President continues to believe that the answer to our financial woes lies in more spending and more government. Through bailouts, overspending, and government growth, the current administration has created three consecutive years of trillion dollar deficits, and added more than $4 trillion in new debt -- an amount greater than the size of the entire federal debt less than 20 years ago. While federal bureaucrats enjoy job security and expanding federal control, the American people continue to suffer. Federal employees have increased by 14.8 percent (executive branch) since September 2007, with approximately 275,000 more executive branch positions added during that time. Federal employee salaries also surpass comparable private sectors, with disparity as high as 22 percent. At the same time, the use of federal contractors to disguise total employment numbers has increased. One in six federal dollars is spent on federal contractors, and the budget for federal contracts has grown to over $536.7 billion in 2010 alone.

Third, excessive waste continues to permeate the federal bureaucracy. In March 2011, the Government Accountability Office (GAO) produced more than 300 pages on redundancies within the federal government, citing 34 specific examples of duplicative and overlapping programs. The American people do not need three departments and 18 federal programs conducting domestic food assistance programs, with each department wasting money on bureaucracy instead of delivering assistance to the American people.

Fourth, the federal government does not leverage effective accountability on federal spending. While the GAO conducts thousands of studies per year, there remains little to no follow through or substantive change in the way federal agencies operate, regardless of the outcome of these studies. Instead of following the accounting practices every American must use to set their budget and balance a checkbook, the federal government has created its own set of auditing criteria -- yet large portions of the government cannot pass a financial audit, most dangerously evident at the Department of Defense.

The American people do not believe expanding the federal budget is justified or that more federal government bureaucrats will solve our economic problems. More power leveraged from Washington is not the answer, and will only put a greater burden on the American people. As president, Governor Perry will work tirelessly to reduce the size of the federal government through the following actions.
Eliminate and Restructure Wasteful Federal Agencies:

America cannot continue to maintain centralized departments that waste our tax dollars and provide little to no benefit for everyday Americans. Eliminating or restructuring the following departments is the first step to shrinking our over-bearing federal bureaucracy.

Department of Commerce:

The Department of Commerce should be eliminated, with key functions transferred to other more appropriate departments.

When the Department of Commerce was first created by Congress in 1903, it was actually called the Department of Commerce and Labor; the Department of Labor was spun off as a standalone agency 10 years later. Since 1903, numerous programs and smaller departments have regularly moved in and out of Commerce. The Patent Office was transferred from the Department of Interior to Commerce in 1925. In 1940, the Weather Bureau was moved from the Department of Agriculture to Commerce. The Bureau of Air Commerce, which assumed the responsibility for air traffic control in 1936, became the Civil Aeronautics Authority in 1938 and in 1958 was transitioned to what is now known as the Federal Aviation Administration (FAA); FAA is now part of the Department of Transportation.

Consolidation and reorganization are nothing new to the Department of Commerce, as evidenced by its history over the past 100 years. Just as private companies must adapt with the times, so too must government agencies be willing to change when necessary.

Although the Department of Commerce states that its current mission is to promote "job creation, economic growth, sustainable, development and improved standards of living for all Americans," its primary activities include statistical analysis, weather monitoring, fisheries oversight, and patent enforcement. Those may all be worthy activities, but they do not represent a coherent, focused agenda. To allow the federal government to focus on the activities enumerated in the Department of Commerce's mission statement, the Department of Commerce should be eliminated, and any vital programs should be transitioned to other agencies with more expertise and better alignment with a specific program's core mission.

For example, the National Oceanic and Atmospheric Administration (NOAA) should be pared down and moved out of Commerce and into to the Department of Interior, which has extensive experience overseeing natural resource management. The U.S. Census Bureau and U.S. Patent and Trademark Office should be converted into standalone agencies, reflecting their unique Constitutional mandates, while other statistical organizations should be transferred to the Departments of Treasury and Labor. The numerous trade-related organizations within Commerce, including the International Trade Administration, should be transitioned to and placed under the authority of the Department of Treasury. Programs targeting small businesses should be transitioned into the Small Business Administration. The Economic Development Administration should be phased out entirely, as proposed by President Ronald Reagan in the 1980's.

The Department of Commerce maintained an over $9 billion budget in 2010, but the largest portions of the budget are directed at regulating oceans, managing fishing industries, and monitoring weather patterns -- functions that do not mandate and independent department.

Department of Education:

The Department of Education should be eliminated, with funding and authority for education returned to the states.

The Department of Education has drastically expanded its reach and budget since its creation in 1980. The Department's budget now has reached over $77 billion in discretionary funds, and $9.3 billion in mandatory funds. We believe that the Department of Education is a fundamental intrusion into the right of the state and parents to control the education of their children, and must be eliminated. Overbearing federal regulation has tied the hands of administrators and teachers at the state and local level, with the costs of the No Child Left Behind Act estimated at of $147 million for the increased paperwork burden (estimated at 6.7 million hours in 2006). Increases in federal involvement have been accompanied by declining test scores, even as spending per student has more than doubled since the 1970s. Even graduation rates have declined, with the highest graduation rate in the past 100 years occurring over a decade before the creation of the Department of Education. Increased federal bureaucracy has not increased support for the teachers and administrators in our schools, or provided a better education for our students.

The way forward for our education system is clear -- we must eliminate the bureaucracy that consumes resources needed for our children's education, returning more authority to the states, our communities, and our families. By block-granting all funding for elementary and secondary education to the states, and removing federal government control, we will empower states to individualize their education systems, adapting them to meet each state's unique population and challenges. Instead of a "one-size-fits-all" approach to education, we will return authority over our education system to those individuals with a personal investment in their society, and the education of their own children.

Department of Energy:

The Department of Energy should be eliminated, with key functions transferred to other more appropriate departments.

The Department of Energy also represents an over-reach of the federal government. Since its establishment in 1977, the Department of Energy has grown to a budget of over $45 billion, 17,000 federal workers, and 100,000 contract workers. The department also operates 37 different subsidy programs, and continues to spend taxpayer dollars to skew the energy market. To make matters worse, nearly 90 percent of the department's budget is spent on contracts with third parties, with little to no oversight for those who receive taxpayer funding.

Instead of funding an over-sized federal agency to exert influence on the market, we should allow private industry and the private market decide which technology is the most cost-effective for the American people. Instead of allowing the federal government to decide which forms of technology and sources of energy merit further research and development, we should give industry the freedom to invest in the technology they believe will succeed in the marketplace, through tax incentives for research and development and significantly lower corporate tax rates.

There are numerous examples of unnecessary programs within the Department of Energy. Over $9 billion are spent annually within the Office of Energy Efficiency and Renewable Energy, which administers federal subsidies through specific programs for each major renewable energy source or efficiency technology. By abolishing EERE"s programs, the federal government could save up to $24 billion over a 10 year period, and even the Congressional Budget Office agreed that the private sector performs technology development, demonstration of commercial feasibility and the deployment of new technologies better than the federal government. Eliminating the Office of Fossil Energy Research would save $1 billion, particularly in an area where private industry has the resources and desire to conduct this research independently (funding at least $20 billion on R&D alone in 2010). The Power Marketing Administration is another example. The administration exists to provide primarily market wholesale power from hydroelectric dams operated in select states. Eliminating federal funding for Power Marketing Administrations would save over $1billion. The programs described above represent a small selection of the many unnecessary programs embedded in the Department of Energy. The only way to guarantee the Department of Energy does not continue to grow, or allow a re-introduction of federal intervention in the energy market, is to fully abolish the department.

However, within the Department of Energy, the National Nuclear Security Administration (NNSA) and other key nuclear programs must be preserved and re-located to the Department of Defense. Our nuclear technology and capability (both civilian and military) are essential to U.S. national security, and must be preserved. The Department of Defense is a natural location for our nuclear programs, protecting our vital national security interests, and preserves the structure that supports our nuclear power system.

Department of Homeland Security:

The Department of Homeland Security should be streamlined and reconstructed.

The Department of Homeland Security represents another area of overgrown federal government. Since its creation in 2003, DHS has become the third largest federal agency, acting with an annual budget well over $40 billion. While many have given DHS a free pass on their financial statements as the department has developed, we can no longer afford to let another massive federal agency operate without financial restraint, organization, or efficiency. In 2010, the Inspector General at DHS identified $256 million in mismanaged funds, wasting American tax dollars and doing little to increase our national security, and had up to $200 million in improper payments in FY2010. The same March 2011 GAO report outlined vast duplicity within the 17 DHS preparedness grant programs, and numerous duplications within FEMA programs. FEMA administers 19 mitigation grant and cooperative agreement programs, 28 grant and assistance programs relating to firefighters, and provided $71.8 million in grant funding from 2004-2009 to fire departments using the preparedness grant programs. As with the rest of the government, DHS wastes taxpayer dollars on bureaucracy -- money that should protect our homeland security. A prime example of this government overspending and inefficiency is the Transportation Security Administration (TSA).

Transportation Security Administration:

The Transportation Security Administration should be transitioned to a public-private partnership.

The Transportation Security Administration (TSA) is a costly and bureaucratic mess that has done more to demean travelers than secure our nation's transportation corridors. The current government policy of accosting grandmothers and toddlers has done nothing to reduce the threat of terrorism or make America safer.

Less than a month ago, an undercover whistleblower shot extensive videos in Atlanta detailing how terrorists could use access to airline catering companies to traffic contraband onto aircraft due to lax TSA enforcement of security laws passed within weeks of 9/11. At Hawaii's Honolulu International Airport, TSA personnel failed for months to screen thousands of bags for explosives before loading them onto aircraft. In another incident, a breast cancer survivor was "subjected to a humiliating public patdown" after a TSA agent refused to let her retrieve medical documentation noting her prostheses. And in 2010, a helpless Houston television reporter filmed TSA agents patting down his distraught 3-year-old daughter as she screamed, "Stop touching me!"

According to a recent congressional investigation of TSA, there have been over 25,000 security breaches since 2001 under TSA's watch. "Of the 25,000 breaches, more than 14,000 people were able to access sensitive areas of the airport and some 6,000 passengers and carry-on luggage were able to make it past government checkpoints without proper scrutiny," ABC News reported last July.

There is an existing model for effective public-private oversight of airport and transportation security that has been deployed for years in more than a dozen U.S. airports, including San Francisco and Kansas City, Missouri, but the TSA administrator in January of 2011 explicitly prohibited additional airports from utilizing the optional public-private model. The Screening Partnership Program (SPP) allows airports to hire qualified private screening companies that are overseen by federal authorities. In San Francisco, where the program has been extensively used, the private screeners were far more efficient than federal screeners. According to a lengthy congressional report on SPP, if federal screeners were as efficient as their private counterparts, salary savings at the nation's top 35 airports alone would total at least $1 billion each year.

The current government-only model of transportation security should be phased out and replaced with a public-private partnership model along the lines of the successful Screening Partnership Program.

Environmental Protection Agency:

The Environmental Protection Agency should be broken down and reconstructed with limited scope and authority.

The Environmental Protection Agency (EPA) has stretched far beyond its mandate, and is a leading threat to American jobs and economic recovery. Instead of focusing on the actual quality of our air and water, the Obama EPA looks for opportunities to delay and ultimately prevent development of our natural resources, and consistently ignores impacts on jobs and the cost levied on Americans. Restrictions on every day Americans are often defended in the name of environmental protection, while politically driven studies often outweigh balanced scientific research and cost-benefit analyses. Instead of working with individuals to preserve and protect the environment, the EPA is busy preventing the construction of essential drainage ditches to prevent flooding on the Mississippi River Delta, or fining unsuspecting homeowners for building their homes on newly classified "wetlands" without providing warning or documentation.

States are best equipped to monitor and enforce environmental laws. State and local officials are the closest to their environment, and care most about the well-being of their citizens and environment. Federal regulation is one-size-fits-all, with no consideration for the unique resources, industry, and environmental concerns in each individual state. Because of this, we believe we must dramatically reduce the size, budget, and influence of the EPA. Instead of empowering a centralized organization of bureaucrats, we should return more regulatory power to state governments. With a budget of $8.973 billion proposed for FY 2012, and the admission that 230,000 new regulator positions would be required to handle the full extent of increased regulation under the Clean Air Act, the EPA will only continue to grow in its current state.

In order to create a functional system that protects both the environment and jobs, we must dismantle the EPA in its existing state, and build a new, more effective organization that addresses national or regional issues that individual states cannot address on their own. Our reconstructed, limited EPA would be dramatically reduced in size and influence, returning more power of regulation and up to 60 percent of the current federal budget to state governments. The EPA must be an organization serving in a research and advisory role, with enforcement powers that are limited to national or regional issues for which the individual states seek arbitration or assistance. The EPA would no longer impose one-size-fits-all restrictions on mandatory technology implementation or maximum emissions limits. Within this role, the reconstructed EPA will continue to perform valuable work collecting and reporting data on national emissions trends and safety practices.

The EPA should and will remain a valuable resource for performing environmental analyses and cost-comparison studies, establishing a common understanding of scientific analysis and providing a research infrastructure not available at the state level. The EPA's reach must be narrowly construed to prevent a return to our current regulatory challenges in the future. By returning more authority to the states, we can empower state regulators that are more in tune with the specific needs, challenges, and solutions that work best for their particular state. We embrace the idea that the best regulators are those who live in the community they are regulating -- with a personal investment in clean air, water, and wise use of natural resources, along with an understanding of local industry and development.

Privatize Fannie and Freddie:

Fannie Mae and Freddie Mac should be phased out and returned to the private sector.

The Federal Note Mortgage Association and the Federal Home Loan Mortgage Corporation, known as Fannie Mae and Freddie Mac, are publicly traded and government-sponsored enterprises that specialize in mortgage securitization. They purchase mortgages from originators, pool them together to form new securities, and sell those newly formed securities in the secondary market. Proponents of the organizations have asserted for years that the mortgage securitization process reduces mortgages rates and makes homes more affordable. However, the current economic and financial crises prove that more than anything else, the federally guaranteed and taxpayer-backed Fannie/Freddie business model succeeded only in creating horrible investment incentives that led directly to the mortgage and housing meltdown.

The previously implicit guarantee of a federal bailout that was made explicit in the recent Fannie/Freddie bailouts was a significant contributor to the systemic collapse of the housing market. First, mortgage originators did not have to be as diligent in checking the credit quality of potential borrowers since many of the new mortgages would be sold to Fannie/Freddie and removed from the originating bank's balance sheet. Due to the expectation of taxpayer-funded bailouts and convoluted financial engineering that assumed mortgages nationwide would never go bad all at once, Fannie/Freddie also paid scant attention to the credit quality of borrowers. And adding fuel to the fire were investment banks that used artificially low interest rates to accumulate massive amounts of debt to magnify their expected returns on mortgage securities that would never go bad. The Fannie/Freddie business model emphasized mortgage quantity over mortgage quality, and taxpayers and homeowners were forced to eventually pay the price.

The incompetent and potentially fraudulent behavior of Fannie Mae executives only worsened the situation. The Associated Press reported earlier this year that the Securities and Exchange Commission was considering charges against the former chief executive of Fannie Mae for failing to properly disclose the organization's exposure to risky loans. Earlier this month, news reports surfaced that despite forcing taxpayers to provide more than $100 billion in bailouts, Fannie/Freddie still awarded nearly $13 million in bonuses to their executives. Only an incompetently managed government-sponsored enterprise could believe that bankruptcy and bailouts should be rewarded with lavish bonuses. And just last week, Fannie Mae tapped taxpayers for an additional $7.8 billion in bailout money following a quarter in which the organization lost $5.1 billion.

Going forward, Fannie Mae and Freddie Mac must be completely removed from the federal government's balance sheet, either through a gradual liquidation of investment portfolios or a completely private spin-off from its current government conservatorship.

Full Audit of the Federal Government:

It is unacceptable that the federal government can continue to operate with rampant waste and duplicity. Instead of looking the other way, and allowing some of our most valuable departments to continue down a road of financial irresponsibility, we believe it is essential that all federal departments and agencies put their financial house in order. Despite over 11,000 reports on financial audits conducted by the GAO, every federal department has rampant inefficiency and financial discrepancies.

After thorough analysis of the 2010 Agency Financial Report for the Department of Health and Human Services, an independent auditor discovered the department was not even in compliance with federal financial management law, and that over 100,000 transactions (totaling almost $2 billion in taxpayer dollars) were lost in the system, neither paid out to recipients nor returned to the treasury. HHS also maintained an inexplicable difference of almost $800 million dollars between their records and those of the Department of Treasury.

The financial accountability in the Department of Defense is even more frightening. Our most valuable department remains one of the few agencies in the federal government that is unable to pass an independent financial audit. The department has never had the capability to pass an audit -- meaning more of our taxpayer dollars are lost in waste, inefficiencies, and bureaucracy, instead of reaching our warfighters. By subjecting the Department of Defense to a full financial audit, the department could locate savings of up to $25 billion per year for the next 10 years. With our military service members risking their lives to protect U.S. interests overseas, we cannot afford to waste $25 billion through poor financial management.

We cannot continue to ask Americans to balance their checkbooks and pay their mortgages on time if the federal government continues to waste their tax dollars through irresponsible financial management. We must hold our federal government to higher standards, and institute a full audit of the federal bureaucracy.
Eliminate Federal Government Waste and Redundancy:

The federal government is racked with inefficiencies and duplicative programs. Despite numerous reports on federal inefficiencies (most notably the 300-plus-page GAO report on redundancies within the federal government, released in March 2011), there remains little progress towards eliminating these inefficiencies. The GAO found that the federal government currently supports 80 federal programs for economic development, spread across four federal agencies or departments (Commerce, USDA, HUD, and SBA). In addition to their mission over-lap, the majority of these programs are not evaluated for long-term benefit to the recipients or administration costs, and each program comes with its own bureaucracy. Nearly 70 federal agencies conduct statistical collection and analysis. There is no reasonable explanation for this division, as separating these tasks only makes data collection more complex and disjointed. By consolidating the Bureau of Labor Statistics with the Bureau of the Census, data collection would be more streamlined as program redundancy was reduced, saving the taxpayers $50 million over 10 years. The federal government operates 20 federal programs within 12 different federal agencies to investigate invasive species, and owns over 55,000 unused properties nationwide. And worst of all, our federal government spends $317 million per year on Title X family planning funding, with over $80 million going to organizations that fund abortions, such as Planned Parenthood. The federal government should not be in the business of dictating partisan social policy through federally funded programs.

We must reduce waste and redundancy within the federal bureaucracy. Every dollar lost in the system is one that is stolen from the American people -- this irresponsible management cannot continue. While the programs and cuts listed above represent a sample of the waste and duplicity in the federal government, every aspect of the federal government must be on the table. Governor Perry will work with Congress to pass legislation implementing the GAO recommendations on duplicitous programs, and will establish legislation that reviews and eliminates wasteful and duplicitous programs, agencies, and departments and does not allow new programs to be funded or created without thorough analysis of their cost, necessity, and benefit to the American people.

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