In the political sphere, they like to think of “cutting taxes” (tax reform) as easy, while “reduce spending” is politically impossible or career suicide. They’re right, on both counts. But, they still need to do both every few years to keep the ever-bloating span of Government in any semblance of check.
The problem we face in 2017 is a Congress that is obsessing on tax reform, yet hasn’t mentioned cutting spending literally all year long. They (and we) cannot live like that. We need leaders with Courage & Will to do what is in America’s best interest, as opposed to what is in the politicians’ personal best interests. The job is to serve the people who elected them, not to simply exist in DC until they campaign again. Their job is to govern and lead, not to fund raise and campaign.
We need them to find that strength, that discipline, & that voice. We need them to do Tax Reform. We need them to provide an environment where the Economy can grow faster, for all our sake. Yet even then, there is still one critical issue they will need to address. Here’s why:
· Over $20 Trillion in US National Debt
· Another $4 Trillion of Debt at The US Federal Reserve
· Interest Rates rising which makes paying for the debt beyond expensive (Each 1% costs over 200 Billion just to pay for interest on the Debt)
· Social Security on pace for bankruptcy within next 13 years
· Government spending at highest real dollar and near highest percent ever in history of Country
· Not one Balanced Budget since the 1990’s
· Demographic pressures will drive up cost of Entitlements rapidly for at least next 10 years
· Government employees have better pay/benefits/job security than private sector on average
WE NEED THEM TO REDUCE SPENDING!
Here are my ideas to jump start the conversation in Washington DC. The point isn’t to do THESE ideas, but to have a national conversation ending in what we all understand is necessary for our Countries economic health, and then act on that knowledge with a relentless unacceptance of failure.
* 2% Across-the-Board Discretionary Spending Cuts
(Real cuts, not just less baseline increases as currently done)
Although we are running some of the lowest percents of Discretionary Spending (as percent of budget), we need to keep tightening our fiscal belt. There isn’t an option. When you over spend for Decades, it is finding every penny and dollar over time that will fix it. Asking every Department to cut 2% each year (again, true cuts – not just reduction in baseline increases) is not asking much, in fact it is the least they could do. Having over spent for years, it is now time to get contemporary and run efficiently- just like every household and business has done for years. You cannot achieve the ultimate savings to pay down the debt without giving up something, and shaving each department equally is only being fair and divides the responsibility over numerous people so their creative solutions can rise out of them.
* Consolidate Cabinet from 14, down to 7 - saves multiple layers of top tier mgmt salaries, pensions, benefits- no effect to taxpayer
Less is in fact more. The need for large management teams over numerous departments is not needed in this day of technology and higher productivity. Most of the upper tier managers are bureaucrats who don’t actively affect the taxpayer and their removal would impact least. The size of Government being trimmed would result in an immediate impact to salaries & benefits, but also remove the overwhelming burden of pensions as well.
Combine Labor, Commerce, HUD, Transportation
Also minimize/include Education (Block Grants to States)
Combine Defense, Veteran Affairs, Homeland Security
Combine interior, Agriculture, Energy
Also include a minimized EPA
State, D.O.J., Treasury, Health & Human Services continue to stand alone
* Consolidate Foreign Military bases and Embassies to streamline yet keep International presence safely
While our presence globally is necessary in the short term and might be reduced in the long term as we effectively get other Countries to play a more active role policing every geopolitical hot spot, it is critical to find a balance between a global presence and a reduced cost. It must be done strategically and comprehensively, so we can insure stability and freedoms overall.
* Eliminate Federal Pensions and replace with 401K w/ matching, include all Admin/Congressional offices & staff
The Key to fixing Government is to get Current Revenues to Pay off Current Expenses. The single biggest problem we face is the 87 Trillion dollars worth of UNFUNDED liabilities in the future. We spent MONEY WE DO NOT HAVE. The change from Pensions to 401K(with healthy matching) is a perfect way to reflect both the problem and the solution. We cannot give Pensions now, that in the future will be more expensive, are unfunded, guaranteed by Government, & are out of touch with the Private sector equivalent. There isn’t a downside, since any Government employee is welcome to leave and pursue the private sector if they feel the benefits no longer are reasonable. From the taxpayer side, the days of choosing to overpay are over. We need to be prudent, cut spending, & create a new fiscal framework that is healthier, robust, & built for long term success for generations.
* Re-evaluate Federal Benefits Contributions to equal average of private contribution levels, Congress/Staff same plan
Similarly to the Pension/401K transition, we need to get all Federal employees (recommend States address this as well) to contribute toward their benefits in similar amounts as the private sector. How can you ask people in private sector to pay theirs and pay Government employees? This inherent unfairness needs to be remedied, and quite easily. The savings here is significant and would be true for all Government employees. Any resistance to this could be explained that the public employee is actually better paid and work less hours than the private sector…
* Re-evaluate Federal Control of Education - Give States control & autonomy, saving Administration costs.
One of the overwhelming agreements among taxpayers is the need to improve Education in America. We agree on the big picture, but differ wildly on HOW to fix it. One of the restraints we must include is the lack of money. It is reckless to say we should “invest in Education” without a similar statement about where the money would come from. The days of writing blank checks toward our future are over. We must address our needs like every household and business in America. Whatever we make dictates the types of options we have, and therefore simply spending more or continuing on the same path are not true options. One solution would be to downsize significantly the Department of Education (Federal) and send the control and autonomy back to the State level. ALL current unfunded mandates would take on advisory level status and States would make prudent decisions about what to keep and what is simply unwarranted burden. By so doing, the States would compete with each other in talent and excellence, with the best systems gaining in notoriety and being replicated in other states. We need to put money back to directly impacting the kids as much as possible. Our need to compete globally demands we make a major change in how we approach education and this would be a great place to start. The exact same argument can be made for the EPA, by putting control back to states allows them to decide how important things are to them on a case-by-case basis.
* No COLA (cost of living adjustments) or pay raises , IF we run a Budget Deficit or have a National Debt.
This to me is a slam dunk. How could you justify pay raises at any level, when the Government is already spending MONEY IT DOES NOT HAVE. (Yes, that line will always be in capital letters until people get the message) The Cost of Living Adjustments make sense, normally- yet we are in times that are not normal. This is feeding someone with a weight problem, handing a drink to an alcoholic, or ordering something online when your bank account is knowingly empty. That is not meant as a smack in the face to people, but as a simple descriptive way of illustrating the pointless nature of COLAs when running a debt or deficit. You want more money? It’s easy. We need to get the entire house in order FIRST, then revisit making any Cost of Living Adjustments- this includes pay raises to the very Congress who knowingly “kicks the can” and causes the over-expenditures.
* No new laws funded without cuts to existing programs to match dollar-for-dollar
One of the Legislative lunacies coming out of Washington DC is to create programs (spend money) when there isn’t money to be spent. Think of it this way-if you want to buy something for your home or business, wouldn’t you need to find the money first before buying it? IF you financed it, wouldn’t you have to be able to make your payments? IF you didn’t have the money outright or couldn’t make your monthly financial payments for credit, would you still buy it? Of course not, and the same is true for Government. Yet, our fearless leaders keep writing checks without the money to back it up (Deficit Spending). They are not in their elected office to destroy our future, they are there to maintain or improve our future. So the new programs, PAY AS YOU GO- in literal terms. You could not write new legislation into Law without first carving out the necessary money in real dollars from the existing budget (if we had one). It is a matter of priorities, bipartisanship, and legislating for the long term benefit of the United States.
* Re-evaluate ALL foreign aid on merits of WHOM to, WHY, & WHAT is given
It really is simple. When you have more than enough money, you have options on the table to choose what to do with the extra. But if you are already spending money that you do not have, why would you blindly give aid to other countries? Also, we currently give money to countries than can provide for themselves, to countries that harbor terrorism, and to countries that are not “true” allies. Why would we do that? Giving to charity at a personal level is a wonderful act, but also needs to work within the framework of the household. To give money to charity while you couldn’t pay your own mortgage, wouldn’t that be unreasonable, irresponsible, and foolish?
* Broad reform of Social Security to a 3-tiered system
(Refer to my SOCIAL SECURITY REFORM page posted separately)
I cannot explain this is totality, but will simply state a couple facts. We are on a mathematical course into insolvency for Social Security (so at that point NO ONE would get anything ever). Social Security is increasing at about 8% annually- while our revenue is not increasing and GDP is only gaining 2-3% annually. SSA Disability is also exploding unlike any time in history (theory is people are gaming system as long term Unemployment). Whether it is a tax increase to help, a reduction in benefits, or a combination- something must be done to solve the imbalance. Remember also 2 critical things- You cannot continue unchanged as is- it cannot be done, & you cannot do away with SS immediately or harshly, since Generations of Americans have “planned” to receive this as their retirement package. “Planned” might have been a conscious decision or a default as life did not play out as they had hoped. So either way, the compassion of Government needs to be balanced with the logical solution of the financial crisis in which we find ourselves.
* Broad reform of Medicare, Medicaid, & ACA (Or true Repeal/Replace of Obamacare) - no redundancy & including economy of scale leverage
My simple question- WHY do we have 3 completely separate entities handling Government Health Care? Talk about a redundancy in Administrative Costs. Why not consolidate these logistically if not in actuality? Less top tier mgmt salaries, pensions, health care costs – while keeping most services at the taxpayer level unchanged. Reform in this case might simply mean a reallocation of less capital in a different way as well. Remember, we can say don’t touch Entitlements all we want- but the Truth is that only Entitlement Reform can save this Country, and Reform means Reduction in some way. The goal of this plan is to reduce the overhead and redundancy to keep the services alive at the taxpayer level especially for the near term.
The list is long, and the impact is real. What say YOU? If you don’t like these options, what would YOU do suggest? And remember, the option of “doing nothing” is not an option - for all of us, but especially for our kids. As we spend the money now, they will be stuck with paying the tab and no money to pay it. So it comes down to this, how selfish are we? And how weak are our political leaders? We are about to find out both of those answers. Get the popcorn ready.