Question

What are the main problems with "across the board" spending cuts to deal with budget deficits in both sate and local government?

Answer 1

"Across the board' spending cut is a general strategy of budget cutting of USA which reduces the government spending by cutting a certain percentage in every programme, department and agencies. 'Across the board' cut receives general support from public as it does not hit a particular programme by scrapping it wholly due to lower funds as it is very difficult to cut government spending due to the wide ranges of public benefits.

But there are many problems associated with 'across the board' (ATB) budget cut due to various reasons faced by both state and local government which are discussed below-

a) Priorities of public policies get lost: As ATB cuts down specific percentage of every programmes and policies, many important public policies also get delayed which could have been brought greater benefits for the country and its citizens if its fund was not reduced. There are many ineffective policies which can be delayed by prioritising the important one but as ATB is applicable on each and every policy and programmes across the country, it reduces the weight of important one also.

b) Total suffering for public:- ATB could be considered as the reason behind many public sufferings due to its unfair design. Many public welfare programmes like construction of highways, schools, hospitals, parks etc get incomplete touch due to cut down of a certain amount of its total budget allocation which could have been completed by scrapping the ineffective policies. but due to ATB all effective and ineffective policies go through a certain percentage of cost cutting which make general people to suffer.

c) Threatening economies of scale:- Economies of scale is difficult to achieve sometimes due to ATB in many government departments as the cost of input might be bigger than the cost of output. So mere cutting a percentage of cost will not help in achieving the target.

d) A complete ineffective programme:- As all the entitlement programmes like Medicare, Medicaid,social security programmes etc which are considered to most expensive programmes in the country are exempted from the ATB. So the budget cutting policy becomes ineffective as a larger amount of fund needs to be spent on these entitlement programmes by the government which require huge amount of investment by the government during the period of budget cutting policy.