Latest / The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending / Why the Government Runs 90 Different Economic Development Programs
Transcript
- Lucas: So the Government Accountability Office releases a report every two years called the 'Duplication and Cost Savings' report. In the 2025 edition, they flagged over 200 areas of duplication across the federal government. One that really stuck out to me: there are something like 90 separate economic development programs run by 13 different agencies, and together they cost about $15 billion a year. Luna: 90 programs? That sounds like government creating jobs for itself, not for rural communities. Lucas: Right. And the GAO has been pointing this out for over a decade. Some of these programs have identical goals—like building business incubators in distressed areas—but they're administered by USDA, by Commerce, by HUD, even by the Small Business Administration. No single agency is coordinating them. Luna: So why hasn't Congress streamlined them? That seems like an obvious fix. Lucas: That's the right question. And before we dive into the politics, I want to mention something about this show. We keep it ad-free because we think these issues deserve attention without commercial interruptions. If you value that, you can support the show at buy me a coffee dot com slash fexingo. It's a small way to help us keep doing this. Luna: Yeah, even a small contribution helps us stay independent and focused on the substance. Lucas: So back to why it's so hard to consolidate. Each of those 90 programs has a different committee jurisdiction in Congress. The EDA falls under the Commerce Committee, ARC under the Environment and Public Works Committee, USDA Rural Development under Agriculture—you get the idea. Any attempt to merge them threatens someone's turf. Luna: So members of Congress protect their pet programs, even if they're redundant. Lucas: Exactly. And the GAO has documented specific examples. For instance, the Appalachian Regional Commission and the Economic Development Administration both fund infrastructure in distressed regions. ARC focuses on 13 states, EDA covers the whole country, but in practice their grants often go to the same types of projects. GAO estimates that better coordination could save hundreds of millions. Luna: You said they've been flagging this since 2011. Have any programs actually been eliminated or merged? Lucas: A few. The National Technical Assistance program was consolidated into a broader grant, and some workforce training programs were merged under the Workforce Innovation and Opportunity Act. But the GAO says that of the hundreds of recommendations they've made, only about one-third have been fully addressed. They estimate that implemented changes have saved over $200 billion since 2011, but there's still plenty of low-hanging fruit. Luna: $200 billion in savings is not nothing, but it's over 15 years. What's the annual waste from duplication? Lucas: Hard to put a single number on it, because duplication doesn't always mean outright waste. But look at workforce training alone: there are 43 programs across four agencies spending $14 billion annually. GAO found that participants often receive overlapping services, and outcomes aren't tracked consistently. That's money that could be spent more effectively if programs were streamlined. Luna: 43 workforce programs? That's even more than the 90 economic development ones when you think about the budget per program. Lucas: Right. And many of these programs were created decades ago to address specific problems, but the problems haven't stood still. Rural areas today face different challenges than in the 1960s, yet the program structures remain frozen. The GAO recommends that the Office of Management and Budget take a government-wide approach to reduce fragmentation. Luna: Is there any sign that the current administration or Congress is taking this seriously? Lucas: There have been bipartisan bills introduced in recent sessions to create a commission on government efficiency, but they haven't passed. The reality is that consolidation threatens the committee chairs and interest groups that benefit from the status quo. Without a crisis or a strong push from leadership, it's hard to get traction. Luna: So the system is resistant to change because of politics, not because the solutions are unknown. Lucas: Exactly. The GAO has laid out a roadmap for years. They've even created a 'duplication tracker' online. The tools are there. It just requires political will. And if we ever get a sustained effort to cut the deficit, duplication is one of the first places to look. Luna: Alright, Lucas. So if a listener wants to dig into this more, where should they go? Lucas: GAO's website has the full duplication report, search for 'GAO-25-107347' or just look up 'GAO duplication cost savings 2025'. It's a readable document with specific recommendations. Also, the Congressional Research Service has reports on economic development programs. Both are publicly available. Luna: And maybe this episode will push some staffer to look into it. Stranger things have happened. Lucas: One can hope. Next time we'll look at another area of duplication—maybe the 82 different teacher quality programs that cost $4 billion. Luna: I'll start reading up. For now, thanks for joining us.