Reid's $40 Billion: Yeah, Right

On balance, Harry Reid's plan for raising the debt ceiling and cutting spending looks pretty good to me. Congress will eventually need to do more but the plan he's devised is a fair enough middle ground: real spending cuts with no broad-based tax increases. One feature of the plan, an effort to, as CNN put it, root out "waste, fraud, and abuse," and save $40 billion in the process is particularly interesting. I mean, why didn't anybody think of that before?

It isn't as if we have an army of Inspectors' General, huge anti-fraud offices, and harsh criminal penalties for people who defraud the government? We also, of course, don't have federal laws to let private citizens bring lawsuits on behalf of the federal government or strong protections for Whistle-blowers.  Do we? Oh wait. All that is wrong. We actually have all of those things.

Bottom line: while there's certainly a degree of waste and corruption, a lot very large government agencies like the Social Security Administration run very large programs honestly with only minimal overhead. Government purchase prices for many services ranging from Medicare treatments to cars are far lower than those private companies get.

Much of the genuine waste--old age benefits for Warren Buffett,  weapons system that we don't need, most farm subsidies--are locked in by statute or appropriations and can't be changed without specific congressional action. While upholding the rule of law requires efforts to detect every possible fraud or abuse, its almost certain that the investigations needed to uncover some types of criminal enterprise will cost more than those frauds do themselves.

Government can and should be made more efficient and less prone to fraud. But $40 billion in "low-hanging fruit"? It's a fantasy and an obvious cheat in the Reid plan.