Pork, Prizes and Elf and Safety.
NASA is just a vehicle for US Representatives to use to deliver Pork to their regions,
Frankly the best thing they can do with the bulk of the nasa budget it split into Ansari type X-Prizes, then let the Private sector compete to get them. Keep a certain amount for BAU work such as telescope and ground station funding.
Make the prizes suffuciently big enough there will be VC's falling overthemselves to fund the private companies vieing for those prizes.
Nasa's annual budget is ~$17bn (2008 figures) thats a lot of money in anyones world.
Say keep 5bn back - thats enough to accumulate multiple billiions for each prize over the year.
The next thing they could do is relax the health and safety regime for Space flight. Its meant to be a frontier - let people risk death exploring it and helping the human race move forward.