Today's cuts come from a very comprehensive Congressional Budget Office (CBO) Report that was developed a couple of years ago. It went through many facets of the Federal government and put together a 284 page report highlighting where budget cuts in spending were possible and reasonable and where tax increases were also possible and reasonable. They highlighted the reasons and justifications for cutting an expense or increasing a tax and what the negative ramifications, if any, might be if the expense was cut or the tax raised. It is a thorough and worthy analysis.
I will not go through all 284 pages and the details of every conclusion. The following summarizes the results from well over a hundred Federal programs and organizations. While their 284 page is extensive and detailed, it does not come close to covering all of the different Federal functions so the following debt reductions are only a subset of all that is possible:
- The analysis did not look at military strategy, only military discretionary spending programs. Thus, it does not estimate how much money could be saved by bringing home the almost 200,000 troops that are needlessly deployed around the world. It does not include the waste of money, and lives, we are expending in Afghanistan following a strategy that has little chance of succeeding.
However, just by terminating failed military hardware programs, making operations more efficient, canceling weapons systems that are not needed, and taking other common sense actions, the CBO team found discretionary military budget expense savings of over $220 billion over the next ten years.
- The analysis identified $22.4 billion from the Department of Energy that could be realized over the next ten years, primarily by getting the government out of energy research initiatives that have never created anything worthwhile over the whole history of the Department.
- Science, Space and Technology savings over ten years - $25.26 billion
- International Affairs - Ten years savings of $421 million, all from terminating a marketing and advertising program for American companies that should be paid for by the companies themselves, not the American taxpayer. It does not include savings from trimming unnecessary and wasted foreign aid to dictators around the world.
- Agriculture savings over ten years - $3.87 billion. This does not include the termination of unneeded ethanol subsidies and other farm support programs that are no longer needed, given how well the American farming industry is dong today.
- Natural Resources and Environment savings over ten years - $32.23 billion. These savings are mostly concentrated in programs that support corporations, not endangering basic government environmental programs.
- Commerce and Housing savings over ten years - $5.42 billion. This does not include the savings that could be found by cutting back on the widespread fraud and mismanagement in government housing programs.
- Transportation savings over ten years - $141.64 billion
- Community and Regional Development savings over ten years - $21.94 billion
- Education, Training, Employment, and Social Services savings over ten years - $45.42 billion
- Income Security savings over ten years - $68.83 billion
- Veterans Benefits and Services savings over ten years - $21.50 billion
- Allowances savings over ten years - $2.54 billion
- Administrative of Justice savings over ten years - $10.26 billion
- Social Security savings over ten years - $388.52 billion. Part of these savings are compatible with the recommendation from "Love My Country, Loathe My Government" which was to raise the retirement age to 70. Not included the $388 billion is another step from "Love my Country,Loathe My Government," which was to uncap the total amount of earnings subject to Social Security tax. The CBO estimates that raising the cap amount the way they want to would provide an additional revenue of $503.4 billion to the Social Security finances over ten years.
This estimate also does not include the final "Love My Country, Loathe My Government" Social Security recommendation which was to terminate Security payments to anyone whose net worth is over $3 million in assets, i.e. people like Donald Trump, Warrren Buffet and Bill Gates who do not need the checks to live comfortably will not get them.
And finally, these savings do not include the hundreds of billions of dollars that need to be recovered from fraud in Social Security and the Medicare/Medicaid programs.
- General Government expense savings over ten years - $5.21 billion
If I added these proposed expense savings correctly, then the CBO analysts have identified over $1 TRILLION in ten years of expense savings. These savings would have minimal negative to the government operations since:
- The cuts include programs that are redundant with other government programs and thus, are not necessary.
- The cuts include programs that are either obsolete or no longer unneeded.
- The cuts include programs that should be paid for by the private sector of the economy and not the American taxpayer.
- The cuts include programs that have been unsuccessful relative to their objectives or charter so canceling them will have no impact on Americans since they never had any impact on Americans in the first place.
While most Americans would be unaffected by the CBO cuts, that does not mean some people or organizations would not be negatively affected. These include military contractors that live off of the waste in the Pentagon's budget, the corporations that had successfully moved their company expenses onto the American taxpayer, and government employees who might lose their jobs as a result of the cuts. These CBO cuts are the right medicine, it is now a question of whether the political class has the courage and smarts to write the prescription.
And the political class should not stop here. The $1 TRILLION of expense reductions does not include other major other cuts:
- Bring home thousands of U.S. troops unnecessarily deployed around the world.
- Terminate more unneeded military hardware programs that were not covered by the CBO analysis.
- Terminate the Department of Education and the rest of the Department of Energy, beyond what the CBO identified, since neither Department has ever been effective or efficient in carrying out their objectives.
- Eliminate Congressional earmarks that serve only as a disguised way for incumbent politicians to raise money for their reelection campaigns.
- The CBO analysis apparently did not address several Cabinet level organizations including Health and Human Services, the Treasury Department, the Labor Department, the EPA and other Federal government functions that would probably all contribute significant additional cost savings.
- The analysis does not include the tens of thousands of buildings and properties around the world that the Federal government owns but does not use but which could be sold off to offset the national debt.
The CBO analysis also included a whole series of tax adjustments to raise money for the government. I will not go into them here for three reasons:
- I believe that the national debt crisis is primarily a spending problem, not a tax/revenue problem for government.
- Given the disgraceful history of wasting taxpayer wealth, I would not allow the political class to get its hands on any more of our wealth until they prove they will not waste it.
- The correct approach is to overhaul the entire U.S. tax code to increase fairness and encourage economic growth whereas the CBO tax adjustment section was a very tactical, piece meal approach.
However, given the above objections, there a were some worthwhile and fair changes to the tax code that could be applied to reducing our national debt:
- Cap state and local government taxes on Americans Federal income tax returns at 2% of income, generating $625.7 billion in additional tax revenue over ten years, according to the CBO analysis.
- Limit the Federal tax benefit of itemizing to no more than 15% of adjusted gross income, generating $1.3 TRILLION in additional tax collections.
- Curtail charitable giving itemization, generating $221.5 billion over ten years.
- Eliminate tax exclusion for companies providing life insurance coverage for their employees, generating $23.3 billion over ten years.
- Tax foreign income on U.S. tax returns, encouraging citizens to not send their money overseas and avoid taxation, generating $71.2 billion over ten years.
In all of these examples, no poor kids went hungry and needy elderly citizens did not lose their Social Security benefits. It is not hard, if you tally how much of the work has already been done at getting government spending and debt under control:
- Our analysis earlier this month found over $6 TRILLION in savings.
- The Bipartisan Policy Center found over $6 TRILLION in debt reduction actions.
- The President's debt reduction commission found over $4 TRILLION in debt reduction actions.
- The CBO found over a TRILLION dollars in expense reductions and over two TRILLION dollars in tax increases by looking at only parts of the Federal government.
- The Cato Institute is going through the Federal government line-by-line and has identified hundreds of billions of dollars in expense reductions from unnecessary government functions.
- The National Taxpayer Union has done analysis that identified $600 billion in expense savings over just the next four years.
Let's hope the political class does not degenerate into their typical fear mongering and demagoguery since if done correctly, no animals will be harmed, no poor kids will go hungry, and needy Social Security recipients will still get their checks. The bigger challenge is if the political class does not step up and perform, needy kids will go hungry and the needy will not get their Social Security checks since the economy will eventually crash under the weight of its debt, taking all worthy government programs with it.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available, at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
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