Economists at the Heritage Foundation have proposed that Congress phase out federal funding for energy research and development, reducing the budget deficit $6.9 billion during 5 years.
Their proposal last week was part of Heritage's proposition to cut the deficit $800 billion. The deficit is expected to be more than $340 billion in fiscal 1993, which begins Oct. 1.
Heritage rejected claims the only way to reduce the deficit is either to raise taxes or reduce social program spending.
CAUSE OF THE DEFICIT
"The cause of the budget deficit is runaway government spending for nearly all domestic programs, large and small, not just spending on programs benefiting older Americans," Heritage said.
"Thus any serious deficit reduction plan needs to take aim at the entire basket of domestic spending, beginning with the most wasteful, before moving to the most sensitive."
It said hundreds of programs could be cut or eliminated, and it should be done in a single deficit reduction bill.
R&D spending was the largest of the energy items.
Heritage said, "Since the Carter administration the federal government has spent over $2 billion/year on research projects intended to develop new energy technologies such as solar and wind power, geothermal, and nuclear.
"Taxpayers have received few tangible benefits from this research. If this research has commercial benefits, private companies should contribute to its cost."
Heritage said there are other programs that have failed, fulfilled their mission, or outlived their usefulness.
"For example, the clean coal technology program has become irrelevant since passage of the Clean Air Act amendments, which supersedes its regulations and prescriptions. Yet the program still will cost taxpayers nearly $300 million."
Heritage said the U.S. should end Export-Import Bank credits, saving $1.9 billion during 5 years. Oil companies and others use them to finance sales overseas.
"These credits are export subsidies for American businesses. Many are large corporations that could finance their own exports.
It said the U.S. should sell the Naval Petroleum Reserves to private firms because the Strategic Petroleum Reserve makes the NPRs irrelevant. That would raise $2.4 billion.
The Reagan and Bush administrations proposed that in their past five or six budgets, but Congress has declined to sell.
Heritage said the U.S. should not appropriate new funds to buy oil for the SPR, instead making additional purchases with $800 million the Department of Energy has on hand.
Heritage made about 125 other suggestions to eliminate programs, subsidies, and commissions.
LITTLE INFLUENCE
Congress rarely embraces unsolicited advice such as this, and Heritage, known for its conservative views, is unlikely to influence many lawmakers with its report.
But the timing is good, anyway. The Republican and Democratic presidential campaigns are well aware of the public's dismay over government spending and could endorse some of Heritage's budget cut proposals.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
