Making large spending cuts while the country is still struggling to climb out of the deepest recession since the Great Depression is NOT a smart idea. Here’s what I would do:
1. Cut defense spending immediately by 5%, and 10% over the next 5 years, by closing a few bases in Europe and Asia. Make all defense contracts subject to mandatory competitive bidding, and empower the OMB to audit all defense expenditures. Eliminate the development and production of out-dated weapons systems. (Secretary Gates has already endorsed most of this).
2. Institute means-testing for all Medicare recipients. Benefits should decrease as our income increases. Giving free medical care to a millionaire who makes almost $3,000 per day is obscene. Everybody should get some benefits, but we have to stop throwing money at people who are made of money. (Leave Medicaid alone! The poor, low-income families and the elderly are having a difficult enough time already). Finally, empower Medicare administrators to negotiate drug prices with Big Pharma. This would save seniors and the Medicare program billions of dollars, yet Republicans in Congress are obstructing any move to do this.
3. Raise the retirement age for Social Security to 68, not 70. The current retirement age is not reflective of the world we live in, with people living and working longer. Payroll deductions for Social Security should NOT have a cap for wage earners. Lower the annual tax to 5% from 6.2%, but remove the wage base cap (currently at $106,000) for employees. Retain the wage base cap for employers so that their matching contribution requirement ends when the employee reaches $110,000 in gross wages. Finally, take Social Security out of the General Fund, so that it can’t be stolen from again.
4. Do not touch discretionary spending, which only accounts for about 16% of the budget. I would actually increase this percentage, so that it includes infrastructure projects that would create jobs. All programs should, however, be subject to annual audits to ensure money is being spent where it’s supposed to be spent and there is no fraud or waste.
5. Implement a transactional tax on hedge fund managers and Wall Street speculators that will bring their real tax liability up to the top bracket where they belong. Some of these people are earning 12-figure incomes, contributing nothing to the economy but higher costs for commodities, and their current tax rate is about 11%.
6. Eliminate the tax loophole created by George W. Bush in 2005 which allows corporations to write-off the cost of training foreign workers in this country, as they out-source American jobs to foreign countries. This loophole actually incentivizes out-sourcing.
7. Keep current individual tax rates where they are for people earning between $50,000/year and $300,000/year. Those earning less should also be given a ‘payroll tax holiday’ for the next two years. Those earning more than $300,000/year should see an increase in their tax rate from 35% to 39%. (These rates can all come down over the next 10 years if we’re serious about ending many of the tax avoidance loopholes in the tax code).
8. Leave corporate taxes where they are, but provide some tax incentives for companies who move their manufacturing facilities back into the US. We have lost nearly 60,000 factories in the last decade and our economy will not fully recover until we can get manufacturing back on its feet in this country.
9. Raise the Estate Tax on estates valued in excess of $10 million. Estates valued at less than $2 million should pay no Estate Tax.
10. End the subsidies to the wealthiest industries on the planet — big oil and big agra. It is absurd that US tax payers are helping to finance the operations of these mega-businesses).
None of these ten ideas alone is perfect, but we have to do something. I believe that taking the above ten steps would drastically reduce our deficit with the least amount of pain for everybody. More importantly, it would serve to buttress the middle class, which is the engine that drives our economy.
In concert with these ten steps, we need to address the trade imbalance and its underlying causes. India and China in particular, need to implement worker protections and an acceptable minimum wage. China needs to stop manipulating the value of its currency and subsidizing its so-called ‘private industry’, so the playing field is more level. Otherwise, their exports should face tariffs.
As long as lobbying members of Congress is allowed, no member should be permitted to vote on a piece of legislation which has any connection to those that are lobbying him or her. This would obviously stem the flow of cash, free private jets, sexual favors and other perks which are currently provided to senators and representatives by various corporate and political interests in Washington in order to secure votes and vocal support. Unless we have this form of recusal, the concept of a representative government in Washington will be a fairy tale.
What we’ve witnessed over the last several months of debate over health care reform is ample evidence of how much this kind of change is needed. From Mitch McConnell to Max Baucus, we’ve witnessed the corporate takeover of the democratic process in the United States. Baucus, who has received more than $3.5 million from the insurance industry, is probably the most hypocritical of the lot, pretending to be for serious reform and calling himself a democrat, he voted against the public option in the Finance Committee. His reason, as stated following the vote, was that it was his responsibility to get a bill out of the committee which could pass in the Senate and he “just didn’t see the votes there for a public option”. In other words, the quality of the bill’s contents was less important to Baucus than its chances of winning approval. More importantly, he failed to mention that a majority of his own constituency favors the public option. Whom does Max Baucus represent?
Baucus’ bill contains the “mandate” which requires all citizens to obtain medical coverage, yet it does nothing to create effective price controls on the insurance industry. Those who cannot afford to pay their insurance premiums will receive tax credits to help them pay. In other words, in addition to giving the insurance industry millions of more customers by government mandate, Baucus would have tax-payers paying for those who can’t afford insurance. The best that Baucus’ Finance Committee could come up with after months of haggling is a windfall for the insurance industry that provides zero relief to citizens. What idiot could possibly support this obvious scam?
The leaders of the Republican Party in Congress, such as McConnell, Boehner and Canter, are all on the take from the private insurance industry, and the few members that are not being lobbied are too cowardly to stand up to them. Of course, there are also many democrats, such as Baucus, Childers and Lincoln, who are also enjoying the generosity of the insurance industry, but the majority of democrats are not and it shows in their votes in these committees.
If you’re a Republican who is against the public option or serious health care reform because you sincerely believe what we have is adequate, you need to ask yourself how you arrived at that conclusion. If you’re just having a knee-jerk, partisan reaction to any idea that a democrat comes up with, then you have a problem. Even worse, if you’re basing your opinion on information that has been spread by organizations like Americans for Prosperity you have a bigger problem because that so-called grass-roots group is a tool of the private insurance industry, which has a vested interested in the status quo and discrediting any kind of reform.
The private insurance industry has 6 lobbyists in Washington for every representative and senator and it is now spending nearly $2 MILLION PER DAY to undermine attempts to fix our broken, soon-to-collapse health care system. In the last 6 months, it has spent more than $390 million to convince voters that the government wants to take over health care and euthanize the elderly. This is the most money that has ever been spent on influence-peddling in the history of the United States. If you believe any of those lies, either you hate President Obama to the point of being self-destructive, or you are simply too ignorant to understand what is being proposed. Either way, you have become a willing tool of corporate fascists who are in control of one of the few business sectors that has continued to see profits grow despite a severe global recession.
At the end of the day, the power of lobbyists in Washington is about as unAmerican and anti-democratic as anything Joseph Stalin or Adolf Hitler tried to do. It has become abundantly clear over the last few months that real change in ANY AREA will never be possible as long as our elected representatives are in the pockets of corrupt, for-profit industries which do not have the interests of the American people at heart.
And don’t expect any tort reform while the Democratic Party is in the back pocket of the Trial Lawyers.