Let ME Balance the Budget

Not long ago, the New York Times published an interactive piece allowing readers to choose from a menu of options to reduce the deficit and balance the budget.  I wasn't the only one who walked away from the exercise thinking balancing today's budget shouldn't be so hard.  Granted, there are legions of special interests to contend with.  But that's only in DC, not in my living room.

So if balancing the budget with fairness and commitment to values matters, it can be done.  We need to cut $400 billion by 2015.  Here is how I would do it.

Entitlement Programs

• $100 Billion:      End the cap on Social Security contributions, currently at $106,000.  It's 6.2% for me (I don't make that much).  It should be the same rate for you.
• $36 Billion:    Tighten eligibility for Social Security Disability benefits.  I personally know many who are collecting these benefits unduly.  This would cut 20% and could be phased in, after an initial spending increase to reevaluate current claims.
• $10 Billion:   Negotiate drug prices with pharmaceutical companies as part of the Medicare prescription drug program (at about $61 Billion per year).  This presumes a 16% savings on Medicare drug purchases.

Military and Defense

• $117 Billion:   Begin drawing down forces in Afghanistan.  This is already America's longest war -- ever -- with no end in sight.  At $117 Billion per year, we should be completely out in 6 months.
• $50 Billion:   Complete pull-out from Iraq.  The combined cost of these two unnecessary wars has exceeded $1 Trillion.  Wonder why we have this deficit?
• $20 Billion:    Cut recruitment costs in half.  This number is based on Army figures ($20b) and presumes an equal amount for the other branches combined.  The increased signing and retention bonuses should phase out with the wars and the absurd wealth of trinkets and gimmicks to recruit high school students need to be replaced with the sort of professional recruitment every other industry uses.
• $100 Million:   Eliminate drone strikes.  These are assassination tools and crude ones at that.  They are losing the "hearts and minds" of victim populations, not to mention the nasty business of political assassination.  I couldn't find an actual annual cost, but at $4.5 Million each and 166 strikes just last year, this seemed a VERY conservative estimate.

Discretionary Programs 

• $31 Billion:   End ethanol subsidies.  This is what we are paying oil companies to add ethanol (and give us less gasoline).  There is no environmental or energy policy reason for continuing.  If the 10% ethanol content in your winter gasoline reduces your mileage by 10%, why not just give you less gasoline and skip the ethanol entirely?
• $15 Billion:  End subsidies to the "big five" crops:  corn, wheat, soy, cotton and rice.  These subsidies are making our diets worse and concentrating agricultural power in just a few large grain producer hands.  If we want to subsidize food, let's look at fruits and vegetables and reinvigorating family farms.  In fact, the elimination of these subsidies may just free up some corporate land for those family truck farms.
• $0 Billion:  Shift 20% of the $42 Billion we spend on highways every year to develop high speed rail and other public transportation systems.  Not a short term deficit reduction but a long term investment.
• $14 Billion:  Eliminate earmarks for pet projects of particular Congressmen.

Taxation

• $50 Billion:   Restore the estate tax to Clinton era levels, in line with taxation on earnings.
• $226 Billion:   Eliminate all of the Bush tax cuts.  Restore income taxes to Clinton era levels.
• $34 Billion:  Tax capital gains and dividends at the same rate as wages.  I see no reason why those of us who work should pay twice the taxes of those who make their money from day trading.  This number is based on the Obama estimate of $11.3b for raising from 15% to 20%, multiplied times three (for an average rate of 30%).  Actually would be still higher for upper income taxpayers.  (See The Truth about Taxes)

Total Impact on Deficit in 2015:  $703.1 Billion

Since my proposals nearly double what we need to balance the budget, throw some towards paying down the national debt, some towards your favorite programs and don't do one or two of my suggestions.

How about you?  How would you balance the budget?

See Also:  That Terrible Inefficient Boondoggle Government Post Office

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