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Government Alphabet Soup: No Free Lunch

By Jason Makansi
Printed in Practical Homeschooling #18, 1997.

Alphabet soup can be expensive.
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Jason Makansi

Most of us have strong opinions about government and its proper role in our society. Despite those opinions, most of us have at best only a cursory understanding of the depth and breadth of our government. Basic Civics and Government courses review the big three - Congress, the office of the President, and the Supreme Court - but not much else.

I hope to show you here how you can think like a scientist (or perhaps more appropriately in this case, a social scientist) while closely scrutinizing what government does so that you will understand it better, too.

The exercise involves selecting a topic: finding all the government agencies that pertain to that topic, then listing what those agencies do, how they are funded, and how we measure what they accomplish. Before we begin, you need to first remember that we have multiple levels of government - federal, state, city, county, town or village. There are even some quasi-international levels, if you count our participation in the United Nations, multi-lateral trading agreements, and global environmental initiatives (CFC phaseout, global warming, etc.).

The Energy Alphabet

I've selected the topics of energy and environment because these are topics I am intimately involved with in my profession, and I am reasonably familiar with the government organizations that deal with them. You and your children could select education, health, science, labor, transportation, or numerous others.

If I asked you to name the government agencies responsible for energy and environment, I'm sure all of you would name the Environmental Protection Agency (EPA) and most of you would probably mention the Department of Energy (DOE) and their state-level counterparts. DOE's budget is somewhere around $15 billion and, although this figure is a few years old, employs in the neighborhood of 20,000 directly and tens of thousands on a semi-permanent contract basis. Last I remember, EPA employed around 10,000 directly and operated on a budget of $4 billion or so.

But that's just the beginning. There's also the Nuclear Regulatory Commission (NRC), Federal Energy Regulatory Commission (FERC), Natural Resource Conservation Service (NRCS), the Tennessee Valley Authority (TVA), the Bonneville Power Authority (BPA), Bureau of Land Management (BLM), Power Marketing Administrations (PMAs), National Park Service (NPS), and many others I can't name from memory.

As if I haven't already made the point, I could also list the ones with indirect responsibility for energy and the environment. For example, the Army Corps of Engineers builds and helps maintain the dams where electricity is also generated and also has some responsibility for wetlands management. The Department of Health and Human Services has the Low-Income Home Energy Assistance Program (LIHEAP). The office of the President has its own Council on Environmental Quality. The Department of Agriculture includes the Rural Utilities Service (RUS), formerly known as the Rural Electrification Administration. The Bureau of Mines regulates coal mines.

Finally, I could also list special organizations created to study specific problems. One of these was the National Acid Precipitation Assessment Program, a $500 million, 10-year effort conducted during the 1980s to evaluate the problem of acid rain. Another is DOE's decade-long, $2.7 billion Clean Coal Technology Demonstration Program. A third is DOE's Strategic Petroleum Reserve, a stockpiling of oil that began after the energy crisis of the late 1970s.

A Closer Look

Obviously, we can't go over each of these organizations in this space. So let's take a closer look at one, the Nuclear Regulatory Commission (NRC). This agency employs in the neighborhood of 3000 people. That doesn't sound like many. But let's put it in a different context.

The NRC's primary role is to oversee the nation's 110 nuclear powerplants. Simple division shows that there are an average of 30 NRC employees per site. Does it really take 30 people to provide regulatory oversight for one powerplant?

Put in a different light, an average-size nuclear plant might need 500-600 people to operate it today. Further division reveals that the ratio of regulator to plant personnel is 1:20. My view is that this is excessive and a waste of people and money, especially since many of these plants are similar in terms of their design, operation, and procedures. On the other hand, opponents of nuclear power probably think the NRC is understaffed to do its job effectively.

The point I am illustrating here is the importance of how you look at the numbers and the functions of government agencies. By comparing staff size to the agency's core objectives, for example, you gain a better understanding of government's role and where politics influences the process. Does it make sense, for example, that the EPA employs about the same number of people as the Natural Resource Conservation Service, formerly the Soil Conservation Service?

Examining Results

Another interesting aspect of this exercise is to relate government studies and actions and understand how politics infects the scientific process. I mentioned the NAPAP study above. The intent of this program was to guide Congress is revising and strengthening clean-air legislation to combat acid rain. Congress ended up passing the Clean Air Act of 1990, which focused on acid-rain control among other pollutants, before NAPAP's final report was released.

Even more disturbing, the legislation was written in a way that contradicted some of the major findings of the NAPAP program, released in interim reports. NAPAP concluded that, with respect to acid rain, nitrogen oxide emissions had a greater effect than sulfur dioxide emissions. Yet the legislation stressed the removal of the latter!

A popular term these days with government is cost/benefit. That is, what does it really cost to achieve the intended benefit of a government program? Unfortunately, so many examples exist where such an analysis is virtually impossible. Energy development programs are often justified on the benefit of creating new jobs. Whether that is a proper role for the government is a vicious ideological bone of contention.

Environmental programs are often justified on the basis of improved health and associated medical costs or avoidance of potential deaths from maladies aggravated by pollution. But environmental spending can also be analyzed based on what it costs us to achieve a cleaner environment.

The utility industry recently spent several hundred million dollars to meet the new requirements of the Clean Air Act. EPA justifies the spending because emissions of one or more pollutants has been cut in half. But is that really the way to justify expenditures? Reductions in and of themselves are not clear benefits. More important is to understand whether the reduction in pollutants resulted in a measurable improvement in public health and ecological impact. Unfortunately, this has not been established, as difficult as it may be to do so.

Over the course of a decade, the DOE has spent $2.5 billion to develop new ways to burn coal to produce electricity and other energy forms. On the scale of the federal budget, this is a pittance. How do you put this expenditure in context?

One way is to assume there are 100 million taxpayers in the US. Each of us doled out $25 to fund this program. If you received a request for a donation to develop new coal technologies in the mail, would you send a check for $25? More than likely, a few of us in coal-producing areas might have; most of us probably would not have.

Another way to add context is to realize electricity is a $200 billion a year business; coal is some fraction of that - for discussion sake, say $50 billion. This DOE program benefits these two industries exclusively. Thus, the expenditure works out to be 0.1 percent of the two industries' combined annual revenue.

If the program was important enough, it seems reasonable to conclude that industry would pony up the money. This truly is a form of corporate welfare; the money subsidizes work that the energy industry could be funding on its own.

Although all of these agencies and programs are funded in different ways, the bottom line is that we pay for all of them. Some regulatory programs are funded by charging a user's fee, by direct taxation, or by a charge to energy companies. But even when the private sector is charged to conduct a government service, the taxpayer still foots the bill through higher prices.

Many question whether some of these agencies are even necessary. The RUS and TVA were established during the Great Depression; the RUS to create jobs and provide electricity to rural areas and the TVA to control flooding. Now, the entire country is electrified and the flooding in the Tennessee River basin is fully controlled. The RUS itself has an annual budget of close to $700 million.

An Exercise in Bureaucracy

Let me suggest two methodologies for conducting this exercise. The first involves using the Internet to surf the web. Most government agencies have web sites, and today's web search engines are so powerful that you can quickly compile a list of relevant ones in the subject area you select. The second involves locating (at the library, for example) a directory of government agencies. Pick out the ones that, based on title, influence the subject you've selected. (One directory you can purchase is called the Capital Source).

Either way, once you have compiled your list, start digging into each agency's expenditures, number of employees, programs, objectives, achievements, history, and so on. See if you can correlate specific studies to later programs. How well does the program match what was concluded in the study? Are the agencies' programs obsolete? Do they duplicate programs in other government agencies?

Another resource that will help you is available from The Heritage Foundation. They recently issued a complete bottom-up review of almost all federal programs. Whether or not you agree with its politics, the Heritage Foundation study provides a microscopic view of how taxpayer money is spent. The insights you'll gain are compelling.

At the end of this exercise, I think you'll have learned several lessons. First, government is more pervasive than we think, and I suspect the extent of it surprises even those whose knee-jerk reaction is to "get government off our backs." Two, government extends its reach because of our ignorance or lack of interest in how it really works - beyond what we may have learned in outdated textbooks. Three, we need to apply new metrics to understand whether government is truly providing the services society needs at a cost it can afford. By going beyond "textbook" government studies, you can instill a higher appreciation for the role of government - regardless of your political leanings.

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