I think everyone probably agrees that the federal budget deficit in the long-run is vital. Realistically, we're looking at $400B-$500B / yr in deficits over the next several years once you get past all the short-term stuff like the stimulus package, TARP, and this year's revenue drought. In various threads, people have brought up things like cutting waste, cutting the military, etc. But as far as waste goes, we're talking a tiny dollar amount. And a few billion in airplanes over 10 years really doesn't dent anything either. So my question is, if you had to cut the budget (or raise revenues), where would you start? I'm not looking for simplistic answers like "make gov't more efficient!" or "cut Medicare!" If you want to cut Medicare, how would you do it? If you want to cut military spending, what programs do you cut? If you want to raise taxes, what taxes and on whom? Etc. Just as a starting point, here's some data to work with: Here's the US projected debt as a % of GDP: ( http://cboblog.cbo.gov/?p=328 ) Here's a view of the US spending as a % of GDP, if you exclude entitlements and interest on the debt: ( http://andrewsullivan.theatlantic.c...t-the-brighter-side-of-the-budget-fiasco.html ) Here are current effective federal tax rates: ( http://andrewsullivan.theatlantic.com/the_daily_dish/2009/07/another-bad-argument-against-taxes.html ) From Wikipedia, here are estimates for revenue sources and expenditures - these are from 2008, prior to all hell breaking loose: Estimated receipts for fiscal year 2008 were $2.66 trillion. * $1.25 trillion - Individual income tax * $927.2 billion - Social Security and other payroll tax * $314.9 billion - Corporate income tax * $68.1 billion - Excise tax * $29.2 billion - Customs duties * $25.7 billion - Estate and gift taxes * $50.7 billion - Other The President's budget for 2008 totals $2.9 trillion. Percentages in parentheses indicate percentage change compared to 2007. This budget request is broken down by the following expenditures: * Mandatory spending: $1.788 trillion (+4.2%) o $608 billion (+4.5%) - Social Security o $386 billion (+5.2%) - Medicare o $209 billion (+5.6%) - Medicaid and the State Children's Health Insurance Program (SCHIP) o $324 billion (+1.8%) - Unemployment/Welfare/Other mandatory spending o $261 billion (+9.2%) - Interest on National Debt * Discretionary spending: $1.114 trillion (+3.1%) o $481.4 billion (+12.1%) - Department of Defense o $145.2 billion (+45.8%) - Global War on Terror o $69.3 billion (+0.3%) - Department of Health and Human Services o $56.0 billion (+0.0%) - Department of Education o $39.4 billion (+18.7%) - Department of Veterans Affairs o $35.2 billion (+1.4%) - Department of Housing and Urban Development o $35.0 billion (+22.0%) - Department of State and Other International Programs o $34.3 billion (+7.2%) - Department of Homeland Security o $24.3 billion (+6.6%) - Department of Energy o $20.2 billion (+4.1%) - Department of Justice o $20.2 billion (+3.1%) - Department of Agriculture o $17.3 billion (+6.8%) - National Aeronautics and Space Administration o $12.1 billion (+13.1%) - Department of Transportation o $12.1 billion (+6.1%) - Department of the Treasury o $10.6 billion (+2.9%) - Department of the Interior o $10.6 billion (-9.4%) - Department of Labor o $51.8 billion (+9.7%) - Other On-budget Discretionary Spending o $39.0 billion - Other Off-budget Discretionary Spending The Iraq War and the War in Afghanistan are not included in the regular budget. Instead they are funded through special appropriations.[1]
Cut war on terror/ dod by 300 billion dollars. force hospitals to lower their bills. Many other countries do this.
Cut DoD/Wars by 75-80 percent. Dismantle DHS. Completely. What a waste of money. Tell every other department they have 10% cuts, effective immediately. Restructure SS so that the baby boomers don't kill us. (raise age, lower payouts, whatever) Force medical costs down and "ration" health care as needed. Everyone has all options available to them, but the more costly and complicated procedures are screened for those most likely to benefit.
I would create self-employment taxes on S-Corp shareholders to help Social Security/Medicare. They basically can avoid self-employment taxes through the setup that allows themselves to select a salary well below market value(It is illegal that they do this, but it pretty much never gets audited). I don't have enough information on spending to know what I would cut, but I'm sure there is plenty of places I would cut/eliminate. I know this violates the rules of not being broad. I would disallow the double dipping that is allowed to the military/clergy for mortgage interest. They get their housing costs tax free, but still get to deduct the mortgage interest(This actually passed against the clergy once before, but congress panicked and repealed it because the large voting segment influenced by their ministers).
Many of the cuts here are a great start. I would also institute a consumption tax and peg it to the size of last year's spending plus 5%, replacing the income tax. Once the debt is paid off, we have a sales tax holiday at back to school time like Texas does every year with any surplus from the year before. The politicians could increase a multiplier of the base tax for specific items to create "sin" taxes on alcohol, tobacco, and other drugs as well as any other products. They could also lower the tax multiplier for other products to create incentives to purchase things like hybrids or domestic goods. If these multipliers can be changed, an essential part of the system would be full transparancy as to the multipliers applied. All adults would be issued a tax deferral of $5000 as well as $2500 for each dependant. All used goods would be exempted from the tax, as would food and medicine. This strategy would help to motivate us to recycle products, save money, and could even eliminate the need for social security over the long run, as people start saving more money. Plus, we eliminate the deficit forever and motivate our politicians to spend less as we see increases in the tax rate directly when we buy things.
Return closer to the tax rates on the wealthy that we had prior to the Reagan-years. It was still a good country before those cuts even or should I say especially for the wealthy and they still had a good lifestyle. It might be a hard blow in their minds to the relatively large number on the bbs who have never been at those income levels, but fantasize that they might be some day. They also think about how on their working class budget it would be hard to pay another 20%, but have no idea that if someone making a million per year had to pay another 20% that it would not really be that life changing for them. Of course we don't need a war budget equal to that of the rest of the world put together to be safe. Eventually we might be forced by the sheer efficiency of it to go for a single government payer health care system. The costly insurance middle men with the roughly 25% additional cost they add on to every health care dollar are a relatively painless way of coping with budget deficits and allowing tax payers reduced cost that could help them with a higher tax bill.
Good one. As for Air Langhi's comment that SS is "unfixable", I disagree - I have never once thought that SS would be there for me when I retire. Most other folks I know my age agree. More importantly, counting on SS for anything other than "starvation avoidance" is lunacy, and a good part of the reason the baby boomers are as screwed over as the statistics reveal. Not a lot of sympathy here. And yes, taxes will have to be raised. Duh. Start with the richest 5%.
I don't think we should be pursuing health care reform while we have massive deficits and we are in a recession. Obama is making a mistake here.
Social Security and Medicare are obviously the two big ones we have to deal with one way or the other. I would phase in higher retirement ages for Social Security. People are living longer and working longer anyways. It looks like we are going to spend more on healthcare, not less, so I don't see how cutting Medicare can happen. A VAT tax is also an option that can raise a lot of money.
Real simple Cut military expenditures in half. That will get US in line with about 20 of the next countries in the world COMBINED. And save about $300,000,000,000 a year http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures And the children will be happily covered with healthcare and it would be paid for! [edit] Oops! left off a couple of 0s
I don't think it's wise to cut our military expenditure while engaged in two wars. And with N. Korea and Iran, a strong military is critical. We don't spend that much on military as a portion of our GDP - less than 5% which is historically fairly low. I think we spend about 21% of our budget on the military. I think cutting that down to 15% after Afganistan and Iraq are done with would be feasible, but probably would have a hard time making it happen today. I believe in Universal Health Coverage - but not right now. I think funding it with further deficits is a big mistake - and if Obama pushes that through, I will not vote for him in 2012.
He's pushing it through now because we're in crisis. The people who are not covered or are insufficiently covered can't afford to wait. Especially during a recession. He's also pushing it through now because he was elected with a mandate to do it and he needs to get it done before the economy runs through all the capital he brought into office. The more his support is eroded by the economy the less political capital he has to do this incredibly difficult thing (a think we have talked about as a country and failed to do for 50 years). If it actually goes through it will be an enormous and incredible accomplishment. He has to do it when the chance for success is greatest. That means now. It will be funny to revisit this thread in 2012 though if he gets it through. I'll make a friendly bet with you now ($20 to the tip jar) that you'll vote for him again in 2012 regardless of what happens with health care.
You're not going to vote for the President that passes healthcare reform? okay Anyway, the question was asked how to cut the deficit, whether you agree with the means, there is no denying cutting the military budget will do two things. Create a stream of revenue for other issues and cut the deficit.
