When you’re in a hole, you stop digging. And when you’ve got a $1.3 trillion deficit and $15.7 trillion debt, you gotta get cuttin’. That’s why we brought out the trusty “Green Scissors” and joined environmental group Friends of the Earth and free-market organization R Street Institute, detailing nearly $700 billion in potential cuts to help Congress get started.

The Green Scissors 2012 report proposes more than 100 cuts to five sectors including: energy, agriculture, transportation, insurance, and public lands and water—focusing on cutting subsidies, eliminating unnecessary liabilities, and ensuring the federal government receives its fair share for use of public resources. These handouts not only cost taxpayers billions and increase federal deficits, but they are market distorting and often harm the environment. So whatever your rationale: waste, markets, or the environment, this report has you covered.

One of the most egregious examples of these kinds of handouts is the 1872 mining law which has remained unchanged since, well, 1872. It allows private industry to mine valuable resources such as gold on public lands virtually for free. And speaking of old-fashioned giveaways, taxpayers have been subsidizing the fossil fuel industry since the early 20th century—most recently, to the tune of $110 billion per year. Today this industry is well-established and one of the most profitable worldwide; it must bear its own costs of doing business.

But the outrageous subsidies don’t end there. Created in the aftermath of airline deregulation in the 1970s, the Essential Air Service is a policy relic that epitomizes wasteful and environmentally harmful spending. Subsidizing expensive regional flights serving only a handful of passengers makes no sense for taxpayers.

Taxpayer-subsidized insurance programs have in some sectors become the largest form of federal support. In 2011 alone, federal crop insurance cost taxpayers more than $11 billion. Now, it doesn’t work like any insurance you’re familiar with – 62 cents out of every premium dollar comes out of Uncle Sam’s pocket, and the insurance companies’ costs for administering the policies are paid by the taxpayer, while most of the losses are picked up by the taxpayer, too. In other insurance areas, taxpayers are on the hook for oil spills if costs exceed $75 million and for nuclear accidents running more than $2 billion. These mean taxpayers essentially take on all the risk for both of these profitable industries.

Speaking of unnecessary liabilities, the Dept. of Energy’s Title XVII Loan Guarantee Program is an annual Green Scissors target. Created in the Energy Policy Act of 2005, the Title XVII program has continuously proven itself a serious failure. Just this week another company defaulted. Publicly scrutinized for its default of a $535 million loan guarantee to the solar start-up Solyndra, the Title XVII program is now pushing to finalize an $8.3 billion loan guarantee for a pair of nuclear reactors in Georgia and a $2 billion loan guarantee for a financially troubled uranium enrichment facility.

Over the past year, Congress has managed to score a handful of victories on Green Scissors targets, most notably, allowing the $6 billion a year ethanol tax credit to expire and die the ignoble death it deserved. This victory earned taxpayers a savings of $30 billion over the next five years. Another recent success was the defeat of efforts to increase subsidies for oil shale . Taxpayers have been down that road before, losing billions.

In these tight budget times, we cannot afford to continue throwing good money after bad. As lawmakers argue over what to do about the enormous deficit and looming automatic budget cuts, they need to pick up the Green Scissors and start cutting.

Read our full Green Scissors 2012 report at www.GreenScissors.com

TCS Quote of the Week

“We have not done what should be done: pay for infrastructure in a way that's fair to everyone.”

– Rep. Don Young (R-AK) speaking on House floor about the transportation bill (H.R. 4348) being voted on today.