Posted by Shyam Moondra
Now that the battle has been joined between Republicans and Democrats on how to reduce the budget deficit and national debt, here is my list of what we can do:
· President George W. Bush is responsible for most of the budget deficit and ballooning national debt, so why don't we undo what he did. Stop the wars in Afghanistan and Iraq, let the Bush income tax cuts expire next year, especially for those who are making $250,000 or more a year, repeal corporate tax subsidies (e.g., to oil companies), and close the corporate tax loopholes that enable the corporations to pay very little income tax (e.g., recently, GE paid zero taxes and Google paid only 2% in taxes).
· Following the lead of the private sector and some of the state governments (e.g., New Jersey), the federal government should also cut salaries and benefits of the members of Congress. They should pay higher insurance premiums, deductibles, and co-pay for their government provided gold-plated health care plan. Their overly generous pension benefits should also be slashed.
· The Pentagon is a wasteland of tax-dollars. We spend in excess of 4.7% of our GDP on defense (up from 3.1% in 2001). The more military power we have, the more eager we seem to become to use it. Republicans are haggling over a few billions of dollars for children's programs at home while they have no qualm against spending billions of dollars in Libya, even though Libya is not a security threat to the United States.
Having enormous military assets means we are the de facto world police. The history has clearly demonstrated that our military involvement in Korea, Vietnam, Iraq, Afghanistan, and now Libya may have cost us trillions of dollars but it has not really made us more secured. Knowing that we have the most powerful military in the world has led us to erroneously believe that we have the right to intervene militarily anywhere and everywhere at whim. In many cases, even though other countries can deal with the crises, they just find it convenient and less costly to let the well-armed (and always eager to oblige) Yankees do it. There is so much money lying around at the Pentagon that they don't care if they paid $500 for toilet seats or $100 for hammers. During the Iraq war, billions of dollars of cash simply vanished in thin air (even today, it's unaccounted for) or paid to the contractors without any proper paperwork (so nobody can tell what services were provided by those contractors). I think we need a debate in this country on what should be the mission of our ever-growing military? Is it to defend our borders or to have a global presence so that we can intervene in any conflict anywhere in the world (even if our security is not threatened)? Once we know the answer to that question, then we will know what is the right budget for the Pentagon. Regardless, President Obama's suggestion to reduce the Pentagon budget by over $100 billion is nowhere near what it could be.
· Social Security: Increase the income limit for Social Security tax from $106,800 to $150,000, but keep the full retirement age at 66, as it is now.
· Medicare: Increase the income limit for Medicare tax from $106,800 to $150,000, increase the Medicare tax rate from the current 1.45% to at least 3%, increase the annual out-of-pocket deductibles, impose limits on annual and life-time benefits, strengthen the provisions that would give Medicare a free hand to negotiate lower rates for hospital stays, drugs, and doctor's services, and allocate more funds for investigating and prosecuting Medicare related fraud.
· Medicaid: Cut the overall budget by 30% - Cover only serious illnesses (for routine care, the patients will be on their own except for children), impose limits on annual and lifetime benefits, and allocate more funds for investigating and prosecuting Medicaid related fraud.
· Reduce the federal bureaucracy by reorganizing the federal government structure. Here are some examples: Combine Commerce and Labor Departments covering the issues related to business and labor; combine Interior, EPA, and Energy Departments into a single Department; close-down HUD, etc.
· Financial and military foreign aid programs should be reformed. We should cut back on who receives such aid and for how long (aid to Pakistan is a sheer waste of tax dollars and Israel has become a permanent recipient even though Israelis' living standard has vastly improved in recent years). A chunk of this aid ends up in secret Swiss bank accounts of the leaders of these countries. Rather than giving cash, we should give them material and provide services procured from American companies that will minimize the opportunity for the leaders of the receiving countries to embezzle the aid money; also, this approach will also help American businesses and possibly help create more jobs for Americans.
· The budget should be thoroughly reviewed and all programs that are deemed ineffective should be eliminated altogether. When Congress approves a new program, the legislation should also require periodic mandatory evaluations and specify under what conditions the newly enacted programs could be phased out.
