As the sequester deadline looms just a few days away, there is the strong possibility that if a deal is not worked out to the liking of both sides, automatic federal spending cuts could put millions of jobs and programs across all states at risk and leave the United States militarily challenged. This seems to be the prevailing message being put out by the White House and the press corps. But this is an old message and something we were warned about three years ago by concerned Americans who turned out to vote in the midterm elections of 2010.
Back in 2010, Americans finally began to take notice of the runaway spending in Washington to the tune of a trillion dollars a year and the impact that this would have on their standard of living and that of their sons and grandkids. The fear of large tax increases and a diminishing lifestyle gave creation to the Tea Party and sent scores of newly elected congressmen to Washington to cut spending and rein in out-of-control debt. That was the people’s voice heard loud and clear. It was a mandate that asked that new school of congressman for leadership and courage to solve the nations spending problem.
Today, that dire warning from 2010 has not been heeded and instead has gone the opposite way. The spending has continued unabated, the debt continues to pile on and our president continues to tax Americans instead of keeping his promise to reduce the size of government by way of spending cuts across the board. He insisted that the BCA of 2011 included the mechanism for automatic spending cuts known as the sequester that ensure cuts were made evenly to domestic programs as well as defense and entitlement programs. The president for his part reneged on this promise and now wants hold Congress and the American people hostage for his lack of courage.
If the president had been as serious about spending as the American people were back in 2010, we would have been well on our way to a balanced budget by the year 2020. The plan back in 2010 called for trimming $1 trillion dollars annually and reducing federal spending to 18.5 percent of GDP which would have resulted in a balanced budget by 2020 without having to raise taxes on anyone. At the pace that Obama is running $1 trillion dollar deficits and with no plan to stabilize annual deficits, we will at some point become the next Greece. This is a certainty. It is a question of how soon.
There are plenty of areas to choose from and find not only $85 billion in spending but close to the $1 trillion dollars annually in spending cuts in order to get to a balanced budget by 2023. The suggestions below are based on information provided by the Cato Institute.
Military and defense - Based on a report by defense experts Christopher Preble & Benjamin Friedman, we could reduce spending by as much as $150 billion annually by implementing a strategy of restraint and reduced intervention abroad. There is no mention of furloughs or shutting down military bases in the report, just common-sense approaches to reducing a somewhat bloated military.
Education – Eliminating the Department of Education would save $94 billion annually. There should be no student aid or grants to any schools unless universities agree to reduce tuition costs. Redirect some of the federal funds to families who want to enroll their kids in charter schools or schools that perform above national guidelines. No federal funds should go toward failing school systems and teachers that underperform.
Social Security – Indexing the growth of initial benefits to prices instead of wages and slightly raising the retirement age would save about $60 billion annually. If we are to balance the budget, everyone must have some skin in the game and with people living longer this is a must in order to preserve this safety net for future generations.
Medicare and Medicaid. - No matter who you talk these days, they will point to Medicaid and Medicare as two of the top three culprits for America’s looming fiscal collapse. Yet, no one seems to dare to touch them in any meaningful way. One way to shave off $190 billion annually to this entitlement would be to provide a fixed amount of funds to each state and allow them the flexibility to tinker with the program as they see fit. This would encourage more innovation at the state level while reducing federal costs. This was the same approach used bywhen he reformed the welfare program. Obviously repealing Obamacare would shave off additional billions and streamline the process. Of course eliminating the waste and abuse and reducing the error rate on Medicare payments by 50 percent would save close to $50 billion more.
Deptartment of Agriculture – Within this department there are about $60 billion dollars that can be looked at and eliminated and were already mentioned by the president. These are cuts to farm and rural subsidies.
Other savings - Freezing federal wages for three years would save $15 billion a year. Twenty percent of federal employees already earn more than $100,000 a year, so they should not have a problem with this. If people in the private sector can endure being underemployed, so can the feds.. Reducing the federal civilian workforce by just 10 percent would save $13 billion a year. Tort reform would save another $10 billion. The money is there; the president just needs to look.
Doing away with rental assistance and public housing subsidies would save taxpayers $38 billion annually.
Cutting foreign aid by 50 percent would save about $12 billion a year.
Cuts to the EPA, reducing the Earned income Credit by 50 percent, privatizing Amtrak are other areas where waste and abuse could be targeted.
Cutting Federal spending can only be accomplished if everyone contributes. We as Americans cannot let the size of government continue to balloon to these unsustainable limits. It curtails our freedoms, makes us more vulnerable in the world and would take decades to recover from a financial collapse.
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