Uncle Sam's head is about to hit the "debt ceiling" again. Whoever wins the presidential race will face stark fiscal choices almost immediately. The pending sequestration cuts to the Pentagon and domestic spending, along with a whole host of other fiscal time bombs, have been kicked about as far down the road as they can go.
President Obama's campaign has failed to present even the pretense of a plan to identify needed spending cuts. If the last four years is prologue, Obama won't get the job done. On his watch, the nation's debt has grown to more than $16 trillion.
Gov. Romney assures voters his business background makes him uniquely qualified to get the country's fiscal house in order. In the first presidential debate Romney said he would measure all federal expenditures against the following rubric: Is it worth borrowing money from China to fund this program? That sounds laudable, but he gave no specifics on how such a rubric would be applied.
He has named a specific cut or two, such as eliminating federal subsidies for PBS. This led the opposition to pounce and silly commercials followed blaming Romney for making Big Bird homeless. Of course, Obama's demands for Romney to identify specific cuts are also somewhat disingenuous -- not so much intended to create an informed debate about the merits of programs on the chopping block as to create openings to attack.
Romney has experience balancing budgets. You can't be successful turning around failing companies, not to mention the Olympics, without knowing how to ferret out waste and then eliminate it. But can the same techniques Romney used so successfully in the private sector work in government?
The answer is yes -- in fact, it is already being done in Kansas. Gov. Sam Brownback, R-Kan., has introduced a dramatic new approach to report the costs and benefits of state programs. The effort's early success helped give Kansas legislators the resolve to enact the biggest tax cut in state history, while balancing the budget. Kansas reduced 4,000 bureaucratic positions -- mostly by attrition -- and turned a half-billion-dollar deficit into a half-billion-dollar surplus.
Romney has used a similar approach countless times in business; but it is unlike the way most government spending is assessed today. Interest groups jealously guard their "share" of federal spending. Current accounting reviews tell us little about the actual cost of services and even less about whether those services actually accomplished their goals.
If Romney would insist that actual goals be established for each program, and then measure progress toward those goals, both in terms of cost and effectiveness, he would have a tool to pinpoint waste and inefficiencies. Then when opponents ask, "Which programs do you suggest we cut?" the answer would be, "Those that aren't meeting their goals." Or, "Those whose benefits don't justify the cost."
This could also help eliminate what has become the default position for government budget balancers -- cutting everything equally across the board. Although this may lead to a politically acceptable compromise, it is not based on sound policy. Yes, wasteful programs are cut, but with no guarantee that it is actually the waste that is cut. Programs doing good things get axed, too.
In Mitt Romney, the GOP has an accomplished candidate with a solid history of taking failing enterprises and turning them around. There is no question the federal government needs a fiscal turnaround, and fast. If Romney would promise to employ this new spending paradigm at the federal level -- one based on an actual cost-benefit analysis of each program -- it could be a game changer, not only for the campaign, but for America.
Tom Daxon, CPA, is the former state auditor and inspector of Okla. and its former state finance director. He served as acting treasurer of Orange County, Calif., rehabilitating the county's finances immediately following its 1994 bankruptcy. He currently teaches accounting at Oklahoma City University.