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Zombie Spending

September 24, 2014 in Economics

By Michael D. Tanner

Michael D. Tanner

Aficionados of horror movies know that the monster is never really dead when you think it is. It may be down, but it will inevitably climb back from the dead at least one more time before the final credits. So it is with government programs. No matter how outdated, useless, wasteful, or redundant programs may be, they come as close to immortality as possible.

Recall that Washington is a town where a tax on long-distance telephone calls was enacted in 1898 to help pay for the Spanish-American War. That tax wasn’t repealed for good until 2006. Or consider wool and mohair subsidies. Congress passed this giveaway to farmers in 1954, having designated wool as a “strategic material” since it was used to make military uniforms. (No one is quite sure how mohair, which is largely used to upholster furniture, became part of the program, but that’s Washington.) In 1993 Congress noticed that military uniforms were actually made from synthetic fibers and began phasing out the subsidies. But by 2002, military necessities aside, the subsidies were back, and this year’s farm bill extends them until at least 2018, at a cost to taxpayers of $5 million. Likewise, the Rural Electrification Administration was created in 1935 to bring electricity to farm country. There aren’t many farms without electricity anymore, but the REA, now called the Rural Utilities Service, is still with us, spending almost $800 million last year.

Now we are seeing two more examples of programmatic immortality.

If you try to kill a government program, you’ll only make it mad.”

Example one is the “heat and eat” loophole in the food-stamp program. Under the complex rules for food-stamp eligibility, a family can qualify for higher benefits if it also receives benefits from the Low Income Heating Assistance Program (LIHEAP). Over the years, a number of states have discovered that they could extract extra federal food-stamp funding for their states by providing families with a nominal amount of LIHEAP funding, in some cases as little as one dollar.

Congressional Republicans sought to eliminate this loophole as part of the 2014 farm bill, but failed. They were able, however, to increase the eligibility threshold to require states to pay at least $20 in heating assistance before recipients could take advantage of the increased eligibility. It was expected that few states would continue trying to leverage the loophole once more of their …read more

Source: OP-EDS

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