The Bipartisan National Commission On Fiscal Responsibility and Reform - The Good and The Bad

I came across an article in Parade magazine this weekend on the National Commission On Fiscal Responsibility and Reform, a commission appointed by President Obama, over the wishes of the Congress. The Commission is supposed to take upwards of a year exploring potential ways to get our obscene government spending under control. While I applaud the theory of the Commission, I have a few serious problems with its implementation:

- First, as I just stated, the Commission will take up to a year to finalize its findings and report. That is another year spent with skyrocketing Federal government deficit spending, adding another $1.4 TRILLION to our national debt. I would have much preferred that recommendations come out of the Commissions sequentially, as they were finalized, rather than waiting until all of the work was done and tied up in a nice bow. Many relatively easy cuts in government spending, some of which are listed below, could begin now.
- Second, while Obama put the Commission into place, he also has decided not to do anything immediate with Federal spending, using the Commission as air cover and an excuse not to get spending and the size of government under control sooner rather than later. In the meantime, another $1.4 TRILLION will be added to the national debt.
- If Obama really believed in and trusted the Commission, he would have given it much more support, with the most obvious support being to promise to incorporate all of the Commission's bipartisan findings in his next annual budget recommendation to Congress. This would have forced the political class in Congress to react to a bipartisan set of recommendations for cutting government spending. Now, without that support, there is no teeth in the Commissions findings, unlike previous commissions like the military base closing commission or the Grace Commission, where the output from these commissions forced politicians to make a public stand. By going this route, however, Obama can again take the coward's way out saying that he did his best to cut spending but Congress stopped him.
- This cowardly approach extends to Congress also. Both Pelosi and Reid have stated that they will take up a Commission recommendation if at least 14 out of 18 members of the Commission support a recommendation. Thus, the bar is set very high for anything to be considered by Congress, since 14 out of 18 means that about 78% of the Commission's members must support a recommendation for it to even be considered by Congress. Nowhere else in government, or real life, is the bar set this high to pass a law, enact an ordinance, etc. Why have Reid and Pelosi set it this high for cutting government spending? It is pretty obvious that they do not want to cut spending and reduce their personal power. Thus, without Obama giving the commission any teeth and the head politicians in Congress setting high bars even for consideration, it becomes pretty obvious that this Commission is set up for failure by the political class.
- And it is not as if they have set the bar too high. According to the article, their objective is to reduce the deficit by $240 billion a year by 2015. If you assume they reach this goal, they would have cut almost a TRILLION out of government spending by 2015. Certainly a great accomplishment but it would still be about $400 billion short of Obama's 2010 budget deficit.

How would I cut the federal budget without destroying the country? There are plenty of people smarter than me (and we will look at some of them with the Cato Institute's "Downsizing Government" initiative in future posts) but even I can come up with some easy cuts:

1. The Obama administration admitted earlier in the year in an Associated press article that the Federal government wastes almost $100 billion a year in fraudulent or just plain wasteful spending and bill payments. If put a much stricter auditing process in place to get that waste and fraud under control, assume that you could cut that amount in half and save $5o billion a year.
2. The Citizens Against Government Waste estimate that about $20 billion a year is wasted on politicians' earmarks embedded in the Federal budget, earmarks that are nothing more than thinly disguised bribes to get campaign donations for their re-election campaigns from individuals, businesses, unions, and lobbyists. If Step 44 from "Love My Country, Loathe My Government" was in place, we as a nation would save all of this $20 billion since none of it would fulfill the criteria of Step 44, i.e. each earmark does not significantly impact the citizens of five states. Another $20 billion saved, or $70 billion total.
3. According to a February, 2010 article in the Washington Times, from 1981 to 2008, the civilian/non-military workforce of the Federal government stayed consistently between 1.1 million and 1.2 million. However, since the onset of the Obama administration, the workforce has already jumped to 1,43 million civilian workers. Given that we have previously discussed the findings from numerous Federal audits and inspector generals that proved that dozens of SEC employees spent their workday surfing the Net for pornography, many in the Interior department responsible for oil rig safety were doing the same, employees in the Energy Department's EnergyStar program gave all submissions a high EnergyStar rating regardless of how poor the design was, etc., it is pretty obvious that there is a lot of headcount cutting that could go on in this workforce. If we assume we could just get the number of employees down to the long term average, say 1.15 million, and that the average Federal employee makes $100,000 when you load in all of the related benefits, we should be able to cut 280,000 Federal employees and save $28 billion in the process. We are now up to $98 billion in savings. The article goes on to point out that 46% of the Federal workforce is over 50 years of age so it is quite possible to reduce the majority of these positions through retirement and attrition without the current workforce suffering significant cuts.
4. Many times we have discussed the obscene number of U.S. troops deployed around the world, ready to fight a Cold War battle that will never occur. The most obvious deployments are Germany (over 50,000 U.S. troops), Japan, (over 30,000 troops), South Korea (almost 30,000) troops, England and Italy (about 10,000 troops in each country) and Kuwait (over 20,000 troops). These are troop deployments, over 150,000, that are left over from another era that needs to end. If it costs a million a year to deploy one U.S. troop into a combat zone (as the Obama adminstration has estimated), if we assume it costs half of that to deploy one U.S. troop in a non-combat zone, bringing home 80% of these deployed troops, 120,000, should save about $60 billion a year, or about $158 billion in total when combined with the previous steps.
5. Now if President Obama ever lived up to the promise of Candidate Obama and brought home our 100,000 troops from Iraq, we could conservatively save another $50 billion a year, bringing our grand total from just these five ideas to $208 billion a tear.

Just these five steps, from somebody who is not steeped in Federal budgeting processes, has just saved $208 billion a year without even trying and without damaging our national security or resulting in massive layoffs of Federal employees. The politicians would not be happy since we would have deprived them of a prime source of funding for their perpetual re-election campaigns but who cares. Those who intentionally defraud the government or accept payments they should not receive due to government billing incompetencies, would also not be happy but again, who cares.

Our approach would easily get the Commission to almost 80% of the first year's $240 billion target. By following some of the steps laid out in "Love My Country, Loathe My Government," they could also realize the following significant savings (see the details for justifying each step in the book):

• Step 9 - eliminate the traditional pension benefit for all future Federal government hires. Most people in the private sector no longer can get into a traditional pension program, the same should hold true for government employees.
• Step 11 - prohibit anyone with assets worth over $3 million form drawing a Social Security check in order to help preserve the fiscal integrity of the system. Bill Gates, Warren Buffet, etc. do not need to be drawing checks from a teetering budget process.
• Step 12 - raise the retirement age to 70, with an exception if a financial hardship can be proven. We are living longer than ever and the retirement age has not taken that into account.
• Step 13 - stop funding the Democratic and Republican national conventions, make their national committees pay for everything including security.
• Step 41 - make all Congressional members whose net worth is over $3 million serve without drawing a salary. Makes no sense for very rich members of Congress, e.g. John Kerry, to draw a salary when the national debt is soaring. He and others will not miss the $170,000 or so they would have been getting.
• Step 42 - make ex-President's pay for some of their security in their retirement if their earnings or assets exceed certain thresholds.
• Step 47 - remove the Federal government from having any thing to do with subsidizing the farm industry and subsidizing any component the national transportation system, returning those responsibilities to the states or letting them fade away into oblivion. The Federal government wastes hundreds of billions a year in both areas without a discernible benefit to the vast majority of Americans

I could go on and on but you get the idea. It is not hard to reduce the size of government as long as we have the politicians in place that have the guts to do it. That is why it is so important to make the right decisions in November. Dump the incumbents should be your first choice if we ever want to get our national debt under control. It is unlikely the Commission has the power to do that, only we do.


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http://www.cato.org/
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http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/