Does anyone in government care about lowering costs?

Written by on 7th May 2012

You may be aware that the Federal government is the one institution in America that doesn’t have to balance its budget. In a carefully choreographed dance between the US Treasury and the Federal Reserve System money is created out of thin air by the Federal government and appears to be (so far, at least as long as the Chinese are willing to continue to buy US Treasury bonds) limitless.

The skyrocketing expenditures of our federal government have become a major focus of this presidential season. The GOP is promising sharp cuts in all kinds of programs (something that preceding Republican administrations, such as those of George W. Bush or Ronald Reagan, promised but never delivered). The Democrats are ready to continue spending on ‘productive’ programs. But, surely both parties would agree that Federal spending on wasteful programs should be eliminated, right? Read on……

A recent government report prepared by the GAO (General Accounting Office now renamed the Government Accountability Office and recognized as the non-partisan investigative arm of Congress) shows how several $100’s of millions of dollars a year in the Federal budget could be saved if only the Federal Bureau of Prisons (BOP) implemented the suggestions and programs identified in the report. For reference sake, it should be noted that the BOP budget (just shy of $20 billion/year) consumes the lion’s share of budget dollars at the Department of Justice.

This report is:


By authors:
  • Thomas W. Hiller, II, Federal Public Defender, Western District ofWashington
  • Michael Nachmanoff, Federal Public Defender, Eastern District of Virginia
  • Co-Chairs, Legislative Expert Panel
  • Stephen R. Sady, Chief Deputy Federal Public Defender, District of Oregon

The Government Accountability Office (GAO) has performed an important service in its study on the Bureau of Prisons’ ability to reduce incarceration costs. The report can be used as a starting point for identifying ways to reduce prison over-crowding, reduce the risk of future recidivism, and save millions of taxpayer dollars every year. Identified in this report are several programs which the BOP either underutilizes or ignores altogether. The report stresses that implementing its included suggestions would reduce BOTH the costs of over-incarceration AND future recidivism.

As an example, the GAO identified three statutory programs that, if fully implemented, would save taxpayer dollars that are now being wasted on unnecessary incarceration. Quoting:

  • The BOP underutilizes the residential drug abuse program (RDAP) incentive for nonviolent offenders. If inmates had received the full 12-month reduction from 2009 to 2011, the BOP would have saved up to $144 million. Much more would be saved if all statutorily eligible prisoners were allowed to participate.
  • The BOP underutilizes available community corrections so that inmates serve an average of only 4 months of the available 12 months authorized by the Second Chance Act. Just by increasing home confinement by three months, the BOP could save up to $111.4 million each year.
  • The BOP underutilizes available sentence modification authority for “extraordinary and compelling reasons,” depriving sentencing judges of the opportunity to reduce over-incarceration of deserving prisoners whose continued imprisonment involves some of the highest prison costs.

These recommendations are explained in far more detail in the report itself. It was addressed to Senator Patrick J. Leahy, Chairman of the Senate’s Judiciary Committee, and Bobby Scott, Ranking Member of the House Subcommittee on Crime, Terrorism, and Homeland Security.

For those of us who aren’t involved in government, it would seem obvious that intelligently researched and presented recommendations like these will likely be implemented in a fairly short time. But, in fact, it’s unlikely that these recommendations will be implemented in the near future. There is a very strong and entrenched lobby of thousands of workers in the Federal system of justice who see such ‘efficiency’ suggestions as threatening to their jobs. For example, most employees of the Federal Bureau of Prisons (BOP) are unionized, as are the employees of California’s and other prison systems. And these unions typically lobby for stricter and longer sentences for convicts. As the number of man-months of incarceration increases, so does the number of jobs for corrections officers and the associated costs to be paid by taxpayers.

There is only slight pressure for reducing the expenditures of the Federal government, as there appears to be almost no limit to the amount of money the government can print – as long as foreigners, like the Chinese, are willing to recycle excess dollars into purchases of US Treasury bonds. Yes, some politicians support the abstract idea of reducing government spending, but history has shown that regardless of which party occupies the White House, spending continues to cycle upward.

Greece is like the canary in the coal mine. What’s happening there can propagate. If you think we’re so much smarter than the Europeans who appear to be going socialist, then what is the explanation for why the Euro has only weakened so very slightly against the Dollar in the last year?

American states, as opposed to the Federal Government, can’t expand their spending by printing money. Some, like Michigan, are trying and achieving success with new programs to reduce the costs of incarceration. But California is an interesting exception as this state is now spending more money on prisons than on education – as Fareed Zakaria and Thomas Friedman recently pointed out on CNN’s Sunday Global Public Square program. And accordingly, it is seeing a net outmigration of people, especially from California’s middle class. For more on this topic, see Joel Kotkin: The Great California Exodus.

George Schussel
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