The Ideal Budget

Congress is riddled with gridlock, and there is no bipartisanship. The Fiscal Cliff is soon to come (And I use this term loosely), and it would represent a standstill of the government. You will still be able to go to the Smithsonian, there just won’t be any money in the treasury. We have spent ourselves to this point, reaching $16 Trillion dollars in debt. We must come up with a solution to our financial troubles.

The Republican Party argues that the problem is a spending problem, and not a tax problem. Therefore, we should only cut spending and all new revenues should be through non-tax revenues. Since we don’t have a tax problem, we shouldn’t increase our taxes to solve the Fiscal Cliff. This approach has allowed the Republican Party to build a comprehensive budget reform plan, which would allow $800 Billion in non-tax revenues, along with $1.4 Trillion in savings through reform to health care programs, $300 billion in cuts to mandatory programs, $200 billion in changes to the method the consumer price index is used by the federal government to set salaries and benefits, and $300 billion in further discretionary spending cuts.

The Democratic Party argues that the tax code favors the wealthy, and therefore taxes are unbalanced and must coercively rise to escape the Fiscal Cliff. The Democratic Plan calls for $1.6 Trillion in tax increases, and very small cuts to the budget. This plan is ironically almost identical to President Obama’s prior budgets, all of which had been unanimously voted down in Congress. The voting record for Obama’s budgets are as such: 99-0, 97-0, and 414-0.

A budget deal must be made if we wish to not go into another recession. It is expected, that if a deal is not reached, that the unemployment rate will top 9%, and the debt will continue to grow. Both parties have presented their representative plans, but neither are willing to move on them. Therefore, I present my plan for the budget, of which I would attempt to gain passage of pending my admission to Congress.

I would support all existing cuts on the Republican plan, totaling $2.2 Trillion in cuts. I would also support the $800 Billion in non-tax revenue, and I would support a modest $200 Billion in tax increases. Why $200 Billion? It’s enough to make a dent in the budget deficit, but it’s not enough to backfire on the economy (Like any large tax increase does). It would also secure some key Democratic votes for my budget, and it’s not a budget if it doesn’t pass.

There is a projected $750 Billion in wasteful and fraudulent spending. By wasteful spending, I mean the $25 Billion Washington spends annually to maintain vacant federal buildings. By fraudulent spending, I am talking about the Medicare fraud and federal insurance frauds across the nation. This is something that should be completely bipartisan- this $750 Billion should absolutely be first thing addressed, and it’s not on either party’s ‘Do Not Touch’ agenda.

Something else that is not on either party’s agenda are the uncollected taxes. Multiple reports show that there are hundreds of billions of dollars in uncollected taxes, with a report from the Government Accountability Office showing as much as $330 Billion in uncollected taxes. Legislation to require this collection must also be included in this budget, as this would bring in an additional non-tax revenue.

Another issue is the overpayment of Government funds. Multiple reports show as much as $47 Billion in Government Overpayments for things like salaries, equipment, and unemployment insurance, as well as medicare reimbursements to hospitals. $14 Billion of these overpayments were among unemployment insurance- totally 11% of all unemployment insurance payments. This is another important approach to eliminating the debt and deficits that plague our society.

So right now, the count is $47 Billion in overpayments, $330 Billion in uncollected taxes, $750 Billion in waste and fraud, $2.2 Trillion in spending cuts, $800 Billion in non-tax revenue increases, and $200 Billion in tax increases, totaling $4.327 Trillion in cuts to the deficit over the decade.

But let’s not forget about entitlement reform. With entitlements consuming well over half of the budget, there must be some reform to these programs. We aught to drug test welfare recipients, which could easily preserve a quarter of the welfare budget. Opponents to this suggest that (according to a Florida State Government tests on Welfare recipients) only 1% of the recipients actually tested positive for drugs. But 25% of those asked to take the free test outright refused, which suggests that they were drug users. The same program must occur in Medicaid, Food Stamps, and Subsidized housing.

We must also filter out the massive fraud in Medicare and Medicaid, along with the Food Stamp programs. These programs are necessary, but are littered throughout with fraud and scandal. We need to enroll employment and re-education programs into these entitlement fund, along with the massive purge of fraudulent spending from the funds.

Obviously, these changes to the entitlements programs are not bipartisan, and if included in a debt deal, it won’t pass. These must be included in separate legislation, in which the budget will require forced future discussions over. If an entitlement deal is not reached in the future, automatic spending cuts to the entitlement programs and the military must take place to ensure that bipartisanship occurs and that a deal is reached on entitlements. I suggest using the military and entitlements as these are two places both parties won’t move on.

This requirement of talks or future cuts is the most important part of the budget, as this would force a deal to take place regarding the entitlement system. This would promote bipartisanship throughout, and would establish changes to the programs throughout.

In addition to this entitlement program talks requirement, we must also do bipartisan reform on healthcare. Defensive medicine (The practice physician take to ensure that they aren’t sued, such as performing advanced lab work for legal protections) accounts for nearly $200 Billion dollars, and if we established medical malpractice caps and reforms, defensive medicine would not take place anymore. We must reform our hospital structures to ensure that patients don’t automatically go to the Emergency Departments for smaller issues (Which drives up government costs for the uninsured), and go directly to a general practitioner.

Physicians also have a pressure to admit patients, which drives up the number of medicare and medicaid reimbursements to hospitals. This can be seen here, in White Coat’s blog at the Emergency Physicians Monthly Journal. There is healthcare fraud throughout, which can also be found here, here, and here. White Coat reports healthcare fraud and healthcare politics with his healthcare updates, which I encourage all of my readers to read.

An entire budget agreement could be the elimination of the waste, fraud, and abuse. This would easily pass as a bipartisan piece of legislation, and combined with the uncollected taxes and collection of Government overpayments, this would easily establish a budget for the next year, before we reach that fiscal cliff. Combined with the Republican spending cuts and non-tax revenue increases, and a few of the Democratic tax increases, we would have a strong, strong budget with long-term deficit reduction prospects. Add entitlement and healthcare reform, and we’re out of the hole.




  1. You’ve made a number of good suggestions of how to target fraud and waste, but you’ve forgotten something important about political will. Many legislators do not want to eliminate or even closely examine waste and fraud if it occurs in the industries that were major contributors to their campaigns. Some are beholden to big pharma, some to the insurance industry, some to trial lawyers groups etc. They will not act to hurt their backers. It would be cutting their own throats.

  2. For the most part, it was a good article with some good ideas. Could unemployment go up to 9% if we go over the fiscal cliff – quite possible. Unfortunately, there are several indicators that we are already in a recession (starting last July). This would mean that unemployment could still go up to 9% next year even if we do not go over the fiscal cliff. Some the waste, like maintaining empty buildings, is still necessary (if you own it, you got to maintain it). Collecting unpaid taxes and prosecuting fraud is also very expensive – although I am sure that, even though it would reduce the total impact of nontax income, it would help.

  3. [...] can see my proposed budget and solution to the Fiscal Cliff on my blog, in a post entitled ‘The Ideal Budget.’ Ryan’s biography can be found at the bottom of this page: About [...]

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