RE: The ODU Smitty Platform
Here is how I would approach it (with some of the OP incorporated).
1. Replace the current income tax system with the 15-15-15 approach – 15% tax on payroll earnings (7.5% employer, 7.5% employee, like social security but no cap), 15% consumption tax on all goods and services, 15% tax on business and investment earnings. Offset taxes for lower incomes with the Boortz/Linder prebate/prefund, set at 30%. This combination, including the prebate/prefund, raises about $400 billion more than the current tax system.
2. Implement a French Bismarck universal insurance approach to health care. Give each American a basic health care plan costing in the $2500-$3000 a year range, with the option to use that amount as a voucher to apply to the cost of purchasing a more comprehensive medical insurance plan. This would cost about $900 billion per year. Pay for it by eliminating the now-redundant Medicaid, saving about $300 billion, offsetting about $150 billion of current cost for Medicare for 50 million seniors, eliminating $300 billion in welfare spending made redundant by the prebate/prefund, giving states the option to pick the programs up with the money they no longer need to spend on Medicaid, and using $150 billion of the additional revenue from 1 above, so that we are down to a net deficit reduction of $250 billion. Make the following additional changes to reduce costs:
- Adopt Swedish-style no-fault malpractice coverage
- Reverse the Obamaacare changes to Health Spending Accounts, and go further by increasing the amount that can be funded, allowing unspent balances to be carried over from year to year, and making balances inheritable upon death.
- Encourage portability of insurance across state lines and pooling of small company employees to receive better premiums.
3. Cut about $100 billion a year from military spending by keeping a larger portion of our armed forces at a lowered permanent state of readiness--bringing troops home from Japan and Europe, replacing up to 300,000 active duty slots with a larger number of cheaper reserve slots, changing procurement to a high/low mix rather than having every new ship or tank or aircraft be the newest cutting-edge technology. Now we are at a net deficit reduction of $350 billion.
4. Make social security solvent by eliminating the earnings cap on contributions (in step 1 above), raising the retirement age by one month each year until it hits 70 in 48 years, and adding a Swedish-style private investment “super 401k.” Gradually reduce the inflation impact on the top end retirement payments, so ultimately you end up with a defined benefit plan with one benefit level for all, plus a defined contribution privatized piece that will vary based on lifetime income. These steps do not impact the current year budget.
5. Privatize a number of operations—the interstate highway system (becomes a national toll road system, like Europe), Amtrak, TVA and the western water and power agencies, the post office (like New Zealand), air traffic control and TSA (like Canada, charge user fees to airlines and private aviation), GSA (all high value federal department buildings in DC vacated by eliminated agencies are leased out), Fannie/Freddie, and others. Transfer ownership to the Social Security Administration to pay off debt owed, set them up to earn target ROIs of 5%, and let the earnings pay for growth and the remainder flow to the Social Security fund to increase solvency. Transfer equity investments in automotive, banking, and other industries. Eventually let the privatized part of SS buy these enterprises from the main SS fund. This eliminates about $100 billion in annual spending from the current budget and also reduces debt service up to $200 billion. Say a net deficit reduction of $250 billion, bringing total reduction to $600 billion.
6. Now go through every department and make cuts from the top down (incorporating some comments from the OP). Focus on cutting dead wood admin costs at the top rather than benefits to the people who are supposed to benefit. Target a 50% reduction in administrative costs in every department and agency. There are 300,000 people on the federal payroll in the DC area; target cutting that number in half (and not replacing the with contractors, eliminating their functions). Put on the table all the cuts recommended by anybody who has looked seriously at the matter. Go at this with a meat cleaver, not a scalpel. Hold management accountable to meeting targets using zero-based billing exercise and replace those that cannot. Potential savings by department include:
-Agriculture $30 billion, end electrification projects, subsidies to not produce, and loan programs
- Commerce $3 billion, mostly eliminate, economic statistics stays, PTO stays, NOAA moves to DoI.
- Defense already covered
- Education $60 billion cuts to existing expenditures, implement voucher system where each student gets a $3,000 voucher to spend on education each year, initially limited to use in public schools that meet certain criteria, total cost $150 billion.
- Energy $6 billion, entirely eliminate, move the NNSA and national labs to DoD.
- HHS $30 billion, keep CDC, FDA, radically overhaul and reform FDA, including allowing consent based bypassing of approval rules for untested drugs to patients if they sign a liability waiver, recombine Education and HHS into HEW.
- HUD $40 billion
- Homeland Security $7 billion
- Interior $5 billion, auction off selected land holdings, particularly out west, and particularly of eliminated agencies, adopt public trust approach to land management
- Justice $5 billion
- Labor $8 billion
- State $8 billion
- Transportation $60 billion (already included in privatization)
- Other agencies and general government $23 billion
- Total savings, net of education voucher cost $75 billion, bringing total deficit reduction to $675 billion
7. Adopt GAAP accounting for all unfunded future obligations, so we know exactly how much is needed on a pay-go basis to cover such obligations. Overhaul federal retirement program to match realities of private sector. Don't interfere when state/municipalities do the same. Based on that more realistic assessment of cost, determine how many of the following are needed:
- Increase gasoline/diesel fuel tax by $2/gallon phased in $0.25/year for eight tears. Offset by adding to the prefund payment a mileage allowance for each driver in a household. Ultimate net revenues $250 billion.
- Legalize marijuana and tax it. This reduces law enforcement costs by $50 billion and could generate up to $150 billion in revenues, for a net impact of $200 billion.
- Increase excise taxes on alcohol and tobacco to cover related medical and other costs to society 100%. Calculate total costs, divide by units consumed, and that is the total tax per unit
8. Reassess our involvement in the UN. Reduce funding and program support to a per capita level consistent with the rest of the world. Demand procedural reforms as a precondition to restoring any additional funding. If the UN remains in New York, eliminate diplomatic immunity from complying with any US, NY, or NYC statutes not related to diplomatic issues and require UN to reimburse costs of any support for diplomatic movement around the city. Let a reasonably constituted UN become the focus for dealing with human rights and global development concerns, with US diplomatic policy focusing on national interest concerns.
9. Replace our current immigration disaster with a more logical approach. Greatly expand our guest worker programs. If you’re here already, you have amnesty to get a guest worker permit, but no path to citizenship. If you want a path to citizenship, you must first return home and then do the paperwork before returning. Allow 12-month period for all illegals to self-report. Deport the rest with no opportunity to legally enter the US again. Amend constitution to eliminate the "anchor-baby" approach.
10. End the federal CZAR nominations. If an agency needs a head, let them be approved through the Congressional process like other appointees.
11. Limit what Congress can do during any lame-duck period, specifically regarding items requiring funding and federal mandates.
12. Require all new administrative agency rule-making to be ratified by congress (simple majority in both houses, like reconciliation procedure in senate, to avoid unreasonable withholding of necessary rules). Require all rules to sunset on 10th anniversary unless re-ratified by congress, and every 10 years thereafter. Replace administrative hearings examiners that currently report to the executive directors of various agencies with Article III administrative law courts located in each judicial district and reporting to district/circuit courts.
13. Convert the house of representatives to a proportional representation system.
14. Adopt an “all hands on deck” approach to energy with a stated goal of energy independence within 35 years and take steps to reduce demand, increase use of alternatives, and increase domestic production from conventional sources. Expedite renewal of NRC permits and encourage growth of additional nuclear capability on existing sites with target of increasing electrical generation from nukes by 50% over 15 year period. Expand wind and solar generation of electricity as rapidly as possible. Open up imports of sugar cane ethanol from Latin America and West Africa as an interim step to reduce dependence on oil and resulting exposure tom price shocks. Increase domestic drilling under increased safety and environmental standards. Convert railroads to electric propulsion and local vehicle fleets to natural gas.
15. Pass a balanced-budget amendment to mandate the federal government act similar to state governments in controlling spending within means of available revenues. Allow variance only in times of declared wars. Prohibit congressional pay increases if budget is not balanced.
16. Reduce perks available to congress. Replace the congressional pension with a 401k. Eliminate all subsidies for congressional eating facilities, barbers, exercise facilities, and the like. Eliminate military flights for congress and staff except in special circumstances; they can fly coach just fine.
17. Reduce congressional and presidential staffs by 10%/year until overall reduction of 50% is achieved.
18. Pass a law that congress cannot exempt itself from anything legally required of ordinary citizens, nor avail itself of any privileges not available to ordinary citizens, and any provisions of existing laws which have such impact are null and void.
19. Recognize the right of same-sex couples to receive benefits previously reserved for heterosexual couples. Similarly recognize the free speech rights of those individuals opposed to same-sex relationships to express their viewpoints.
20. Strongly recognize the protections of the Second and Fourth Amendments, and impose stricter limits on the scope of the commerce clause and sovereign immunity.
21. Extensive initiative and recall procedures, along the Swiss model. No tax increase can take effect until submitted to public referendum. Other new statutes must allow reasonable time (90 days) for public protest before taking effect. If the required number of protest signatures are received during the protest period, then the statute must be ratified by a vote of the public and cannot take effect until after such ratification. Elected officials can be recalled using procedures similar to various states.
22. Limit the Fed's responsibility to controlling inflation, along the lines proposed by Milton Friedman, and reduce its powers to those needed to perform that function.
(This post was last modified: 07-31-2012 08:21 AM by Owl 69/70/75.)
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