Things are bad, we all realize. Unemployment is on the rise, our environment is in decline, we’re drowning in deficit, our public schools are lacking, and to make matters worse, the jobs are all going overseas and higher education becomes more unaffordable each year. We also just swore in a president who has lofty goals in helping our country get us out of our many problems.
While Barack Obama is in the White House making history, I’m here in Morehead, Kentucky, playing an awesome flash game called “Budget Hero.” The game is from American Public Media, and it basically entails you controlling where all of our tax dollars go. In each department, whether it be Defense, Education, Healthcare, Social Security, Taxes, or Science, there are cards you can play (I played a total of 52, oddly enough) that either spend money or reduce the budget in that area, The figures are all researched and government and NGO sources have been attributed. You can pick three core values that are most important to you which drive you to make the choices you make. The three I chose were-
1. Barack Obama as President (You can pick John McCain, too)
2. Green (Sustainability)
3. Energy Independence (Probably the most important one)
So, that being said, here’s how I found my way out of deficit and created a $600 Billion+ surplus in ten years. I found that the budget is a delicate balance of cost- if you spend somewhere, you have to save exponentially more somewhere else. And despite all of these efforts, I only succeeded in pushing the budget bust past 2070. Whenever that happens, we’ll most likely need an entirely new way of doing things.
I’ll start with my Tax policies. I have everything segmented out by department, so you can read at your leisure. This is pretty long, but it’s worth a read. What do you think of my plan to save the USA?
Note: I'm actually sticking to some tenets of oldschool conservatism quite a bit in this outline. Some of you may be surprised.
(If you have a different plan than mine, I’d love to hear what you have to say. You can play Budget Hero here- http://marketplace.publicradio.org/features/budget_hero/ )
1. Repeal Bush Tax Cuts, Tax the Rich (10-year impact: $2.954 T gained)
In addition to repealing the Bush tax cuts, you'd create a new top bracket for income over $1 million for couples or $500,000 for single tax filers. The new top rate would be 44.6 percent after 2010, up from 35 percent during the Bush era.
The wealthy have made their money in a nation that all taxpayers help create and maintain. It's only fair that they contribute proportionately more. What's more, the divide between the rich and the poor has grown during the Bush administration. This would start closing that gap.
Impact: This doesn't raise as much cash as hiking up taxes for everyone, but it adds more to federal coffers than just bumping up rates by one percentage point for income in the top bracket (single taxpayers who make more than $357,700). You could use this money, for instance, to more than double federal spending for environmental protection or border security or, well, the IRS.
2. Cap and Limit Greenhouse Gases (10-year impact: $1.99 T gained)
This option, known as a "cap and trade" plan, would feature a government auction of credits that companies would need in order to emit carbon dioxide. Companies that don't use all of the credits they buy could sell them to companies that need more. This proposal would lower emissions to 1990 levels by 2020, and 80 percent below 1990 levels by 2050.
Beginning with the 100 million people who live within three feet of the rising sea level, climate change is the biggest threat to the survival of mankind. Let's start acting like it. You're cutting emissions deep enough to have a real impact on global warming, in a relatively business-friendly way. Yes, it will affect the economy--but global warming could devastate it.
Impact: Firms that bought credits would likely pass the costs onto their customers, in the form of higher costs. That would force consumers to weigh the costs and benefits of buying goods from businesses that emit a great deal of C02, which could in turn spark changes in behavior that would lead to lower carbon emissions.
Source(s): CBO, EPA, Obama and Clinton campaigns
3. Link AMT to Inflation (10-year impact: $1.286 T gained)
The alternative minimum tax (AMT) is a Lyndon Johnson-era tax-the-rich policy that has become a Bush era millstone for middle-class taxpayers. The problem? It was never indexed to inflation, so each year more taxpayers fall into its grip. Congress temporarily patched the problem in 2007, preventing 23 million more Americans from facing the tax. You'd solve the problem once and for all.
The AMT was never meant to ensnare upper middle-income families. Its reach has grown far beyond the relatively small amount of wealthy tax-dodgers it aimed to catch. If we don't fix this problem, a growing number of people who take deductions--such as middle-class families with a several children, people with high medical costs, and those who pay high state taxes--will have to pay higher taxes that they can't afford.
Impact: Unless Congress acts, some 26 million taxpayers, more than a quarter of the total, will get pegged by the tax in 2008, according to the Tax Policy Center in Washington, D.C. Revenues from the AMT will triple, totaling about 8 percent of the fed's intake. If nothing's done, a third of Americans will have to pay this tax by 2010. This move would dramatically reduce that number, to less than 5 percent (or about 4.6 million people).
Source(s): Tax Policy Center, CBO
4. Add 50 Cents to the Gas Tax (10-year impact: $701 B gained)
You're adding 50 cents per gallon to federal gas taxes, currently at 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel. Add in existing state and local fees, and the average per-gallon tax on would jump to about $1.
Didn't President Bush say America is addicted to oil? Raising fuel taxes will encourage us to drive less, reducing congestion, smog, greenhouse gases, and accidents. The money could go to repair and maintain the country's fast-crumbling roads: You could wrap the earth six times with U.S. highway pavement deemed "unacceptable." More than 150,000 of the nation's bridges are "structurally deficient" or "obsolete," according to the American Road and Transportation Builders Association. Meanwhile, the fund that pays for all of this (the highway trust fund) will be $19 billion short by 2010.
Impact: This will pump an average of about $70 billion a year into the federal coffers. You could use that money to pay for roughly 35,000 miles of road construction per year. Or you could spend some of it to take care of $850 billion in needed repairs to bridges identified by a 2005 congressional commission. Or to invest in renewable, non-polluting energy sources, or to help low-income people who would be disproportionately affected by rising energy and transportation costs.
Source(s): CBO, American Road and Transportation Association, American Society of Civil Engineers
5.Increase Tax Credits for College (10-year impact: $139 B spent)
You'll provide a $4,000 refundable tax credit for most American college students, which will cover two-thirds the cost of tuition at the average public college or university.
Sixty percent of college graduates leave college with loans to repay, and the average debt is more than $19,000. And the burden is getting heavier. College costs have increased nearly 40 percent over the past five years. A college degree is the surest route to a high-paying, productive job, and this credit puts that goal within reach of more Americans.
Impact: The Department of Education estimates that more than 3 million students are hindered from attending college due to the cost. The tax credit could remove this obstacle for many students and lead to an increased supply of skilled labor and a more vibrant economy.
Source(s): Obama Campaign, Department of Education
6. Tilt Payroll Tax Burden to the Rich (10-year impact: $77 B gained)
Taxpayers currently finance Social Security through payroll taxes of 12.4 percent, split between employees and employers. You are cutting the rate to 10.7 percent and getting rid of a ceiling that caps the amount of a person's income that is subject to Social Security taxes.
Social Security taxes are horribly regressive. The system was created to keep people out of poverty. Isn't it odd that it's being funded on the backs of the poor? Let's ask more of the wealthy, who can afford a bigger hit.
Impact: You are lowering the burden on lower- and middle-class workers at the expense of the wealthy. Someone making $50,000/year would save $425, while an individual making $200,000 would pay $833 more in taxes.
Source(s): Tax Policy Center
7. Tax Private Equity, Hedge Fund Managers (10-year impact: $26 B gained)
Managers of private equity and hedge funds only have to pay capital gains taxes (not personal income taxes) on their profits, which accounts for the lion's share of their income. Their top rates are 15 percent--a lot less than personal income tax rates of up to 35 percent. You'd be calling their profits income and make them pay the higher rates.
As none other than Warren Buffett has noted, why should multi-millionaire hedge fund managers pay a smaller proportion of their income in taxes than their secretaries do? This is a simple issue of fairness. After all, we have a progressive tax system built on the philosophy that people who earn more should contribute more.
Impact: Hedge fund titans James Simon and George Soros each earned more than $3 billion last year alone. Hike taxes on them and their cohort and you'd raise enough money each year to, for example, cover the entire annual budget of the Food and Drug Administration or pay for first-responder grants to local law enforcement, fire and emergency medical services to prepare for terrorist attacks and natural disasters.
Source(s): Joint Committee On Taxation
8. No Breaks for Extractive Industries (10-year impact: $26 B gained)
Producers of oil, natural gas and minerals currently enjoy tax incentives that few other industries enjoy, like the one that allows them to immediately deduct exploration and development costs (for drilling wells, looking for oil, etc.). You'll treat them like every other industry and require them to deduct costs slowly over time.
Why should companies that drill and extract natural resources be given advantages that other companies don't get? And as the world faces a global warming crisis, do we want to subsidize industries that take carbon from the ground and help put it in the air? The tax breaks also tilt the playing field against companies that are working to develop more sustainable ways to generate energy and new materials.
Impact: Critics of this tax break say that oil, gas and mineral companies will continue to explore when it's profitable, and that taxpayers shouldn't pay for development costs that companies would undertake anyway. Industry supporters say that this will have a chilling effect on exploration and hurt America's ability to produce its own resources.
Source(s): CBO, Joint Committee on Taxation
9. Tax Toxic Industries (10-year impact: $20 B gained)
Federal "Superfund" legislation requires known polluters to clean up toxic waste sites. But when the guilty party can't be found, the Environmental Protection Agency (EPA) foots the bill. To help the EPA pay, you'd be reinstating taxes that expired in 1995 on industries that deal in petroleum, chemicals and other potentially polluting products.
Polluters, not taxpayers, should pay for the mess they made. If we can't find the polluters, the next best option is taxing the entire industry, which could prompt companies to keep a closer watch on their own and their competitors' environmental footprint. Reinstating the tax also would stabilize Superfund funding, whose funding needs to be approved every year, making long-term planning difficult.
Impact: This tax would raise more than $1 billion in 2008 to help clean up some of the more than 600 Superfund projects that are underway. Cleanups today are often more complicated, costly and time-consuming than those that were rehabilitated soon after Superfund was created in 1980, say EPA officials.
Source(s): CBO, Congressional Quarterly
10. End Breaks for Big Oil (10-year impact: $14 B gained)
You'd be ending a tax deduction Congress passed in 2004 that added the oil and gas companies to the list of industries that could benefit from a break for manufacturers in America. You're stripping the tax break for the five biggest companies that refine oil and sell gas in the U.S.: Exxon, Chevron, BP, Shell and ConocoPhillips.
ExxonMobil is setting records with its gusher earnings--more than $40.6 billion in 2007. Why should the U.S. taxpayer be putting money into the pockets of a highly profitable, polluting industry when oil is at record highs of more than $100 a barrel, gasoline could rise to $4 a gallon this year and the planet faces a global warming crisis? You could use this money, for instance, to renew a long list of tax breaks for renewable energy that expire at the end of 2008, including a tax credit for wind, geothermal, and hydroelectric energy.
Impact: You'll be redirecting billions of dollars in federal dollars away from the oil and gas industry. Still, the Joint Economic Committee said that ending this tax break wouldn't increase prices for oil or gasoline.
Source(s): Joint Committee on Taxation
11. No State, Local Tax Deduction (10-year impact: $710 B gained)
Taxpayers can deduct state and local income or sales taxes, whichever they prefer. These deductions in turn allow states to levy higher taxes, knowing their residents can get the money back in their tax return. You'd get rid of these deductions for state and local taxes.
These deductions are a tool to promote higher taxes at the state and local level, and subsidize bigger government. This deduction unfairly benefits wealthier places, anyway, where taxes are higher and taxpayers are richer.
Impact: Deduction isn't one of the top factors that influence state or local spending, so it's unclear how much of an impact this would have on states' funding decisions. You'd raise enough money over five years to, for instance, fund the Department of Homeland Security's annual budget.
12. Reform and Hike Corporate Taxes (10-year impact: $28 B gained)
Corporations pay taxes on a graduated scale, just as individuals do. For companies, the first $50,000 of corporate taxable income is taxed at 15 percent; $50,000 to $75,000 is taxed at 25 percent, and so on to a top rate of 35 percent. You'd move instead to a 35 percent flat tax that corporations will pay on all of their income.
A flat corporate tax would be more fair. Large corporations often take advantage of the tax law by sheltering some of their income or delaying payments (scheduling payments so they can avoid reporting it). Individuals in small corporations also shelter their money by keeping earnings instead of paying them out as dividends. A flat tax would reduce opportunities for savvy companies to use accounting tricks to reduce their taxes.
Impact: Companies would have a tougher time sheltering money from taxes--and companies would be far less able to exploit loopholes to hide money from the government.
13. Cut the Mortgage Interest Deduction (10-year impact: $90 B gained)
Homeowners who borrow up to $1,000,000 to buy a home can deduct the interest payments from their taxes. This option caps it at $400,000 or less.
Some blame the mortgage interest deduction for overvaluing housing, leading to the subprime bubble. You'd be helping the country wake up from its housing market-induced delusions. This deduction is supposed to encourage home, not mansion, ownership. Besides, we should not be prompting people to invest in housing, rather than stocks, bonds, and other savings.
Impact: Homeowners with mortgages between $400,000 and $1,000,000 -- about 1.2 million people in 2008 -- would face higher taxes, raising more than $4 billion in the first year and $30 billion over the first five years as the program ratchets up. You could use that money to help people ride out the housing crisis.
Source(s): CBO, IRS, National Association of Homebuilders
14. Raise Tobacco Taxes (10-year impact: $54 B gained)
You're raising the federal excise tax on cigarettes from $0.39 per pack to $1.00 per pack, and firing up taxes on other tobacco products.
This is a two-fer: You're raising revenues for the federal government and improving the health of Americans (which, incidentally, could reduce federal health care coverage costs later on, although this effect isn't easy to measure). You can use the additional $71 billion from the higher taxes to pay for additional health care coverage for children.
Impact: The increase could reduce by 1.9 million the number of people who smoke in 2017, according to the congressional Joint Committee on Taxation. Currently, about 45.4 million American residents smoke. Those smokers would cut back their use of cigarettes by 4 percent, to an average of about 400 packs a year per smoker. Some smokers may choose to buy cigarettes on the black market.
15. Raise Taxes on Multinationals (10-year impact: $40 B gained)
U.S. companies can wait to pay taxes on income earned by foreign subsidiaries until they send the money back to the mother ship. Until then, they can invest or use the money to make more money. You'd require American companies to pay U.S. taxes on all income when it is earned, regardless of where it was made.
U.S. companies are increasingly expanding their businesses overseas, meaning fewer jobs here in America. The current tax structure encourages companies to invest abroad. Taking away this advantage could potentially keep some jobs in America and increase earnings by U.S. workers. It would also simplify the tax code, and potentially lower compliance costs for U.S. businesses and enforcement costs for the U.S. government.
This could encourage companies to invest at home rather than abroad, and that could put more cash in the pockets of U.S. workers. But U.S. companies that didn't move their overseas operations back home would see costs go up, while their non-U.S. competitors wouldn't.
1. Bring Troops Home Soon (10-year impact: $1.347 T gained)
You're bringing 180,000 active duty Army, Reserve and National Guard troops home from Iraq and Afghanistan by 2011, but will leave about 30,000 soldiers behind to stabilize the region.
More than 4,000 soldiers have died in Iraq and Afghanistan in the last four years and the U.S. has expended more than $2 trillion dollars to fight those wars. A recent Rasmussen survey found 64 percent of Americans want our troops home from Iraq in a year. Pulling troops out would remove a major strain on the budget and would drastically reduce the prospect of more dead and disabled American soldiers.
Impact: More than 180,000 men and women would be able to return to their homes and get back to their lives. But the instability and uncertainty in the war zones makes it difficult to calculate long-run consequences of withdrawing troops.
Source(s): CBO, Center for Strategic and Budgetary Assessments, New America Foundation, Project for the New American Century, Center for Defense Information, Department of Defense
2. Cut Military Spending by 10 Percent (10-year impact: $541 B gained)
You would be eliminating or making cuts to several offensive-minded military programs, like fighter jets and space-based weapons, scaling back the country's missile defense program and reducing the nuclear arsenal by a factor of six.
The U.S. currently spends twice as much on its military than the next nine countries combined. The Cold War is over, and the current global landscape does not require such an extensive offensive force. It makes us look like a paranoid bully. We would be much better off increasing funding for peacekeeping efforts and bolstering homeland security.
Impact: To get a sense of the broader impact, consider the fact that 2.5 million Americans lost their jobs between 1987 and 1996, when defense spending was cut by almost a quarter. It's safe to assume that hundreds of thousands more would lose their jobs this time. To deal with these cuts, you could reduce the nation's nuclear arsenal from 6000 to 1000, cut two active Air Force divisions and one aircraft carrier group.
Source(s): Foreign Policy in Focus, Bureau of Labor Statistics
3. Replace Some Military with Civilians (10-year impact: $9 B gained)
You would be converting 90,000 military positions that don't involve combat or security operations to civilian status. Filling non-military functions with civilians would free military personnel to fulfill their primary mission of military combat.
Filling non-combat positions with civilian employees would free up military personnel to fulfill their primary mission of fighting and keeping the peace. You would avoid long-term obligations for military pensions and health care by hiring civilians. Besides, contractors can be fired at will, unlike soldiers, allowing the military to quickly ramp up and ramp down personnel as needed.
Impact: If you substituted civilian for military employees, you could give an employment boost to the general population and cut the defense budget. Salaries and benefits for civilian employees are not as generous as military pay and benefits.
Source(s): CBO, Heritage Foundation, Department of Defense, Office of Personnel Management
1. Increase Mass Transit Funding (10-year impact: $33 B spent)
Mass transit ridership is topping 50-year highs and is expected to double in the next 20 years. The federal fund to pay for the increasing number of projects is just about tapped out. You would help cities pay for new bus and train projects by spending $1.6 billion more each year for mass transit.
Nearly one-half of the transit commuters in the 50 largest urban areas work in central business districts (or downtowns). Building more roads is either not an option in many cities, or is prohibitively expensive. Mass transit is the most efficient and cheapest way to ease congestion and get people back and forth from home to work. If anything, you should spend far more to meet the expected $1.1 trillion in transit needs through 2020.
Impact: Mass transit could help reduce traffic congestion, which costs travelers in the largest 68 urban areas 3.7 billion hours of delay and $63 billion in lost time and fuel costs. Besides, the population will double by 2050. Sixty percent of that growth will be in metro areas. Transit is essential for many low-income households, who make up 43 percent of transit riders and most do not have cars.
Source(s): Texas Transportation Institute, OMB, Surface Transportation Policy Partnership; Heritage Foundation, U.S. Census Bureau, Reconnecting America
2. Provide Relief for States (10-year impact: $50 B spent)
You would spend $25 billion in a temporary emergency fund to help states avoid cuts in health, education and public safety, and $25 billion to help repair roads, bridges and schools.
Have you noticed the economy isn't looking so good? You would create jobs with this program. You also would prevent states from having to cut funds for schools, law enforcement, and programs that pay for sick poor children to see the doctor.
Impact: This money would provide much-needed aid to states struggling to make needed repairs to roads and bridges. More than 150,000 of the nation's bridges are "structurally deficient" or "obsolete," according to the American Road and Transportation Builders Association. Meanwhile, 20 states saw revenues fall below projections in 2008. Yet states are incapable of meeting those needs and others because of fiscal difficulties related to the nation's economic slowdown.
Source(s): U.S. Chamber of Commerce, American Road and Transportation Builders Association, Obama campaign
3. Fund Anti-Congestion Experiments (10-year impact: $10 B spent)
Two-thirds of all commuters leave for work between 6 and 9 a.m., and 90 percent use private vehicles. You'd set aside at least $1 billion a year to pay for experiments in "congestion pricing," to get more cars off the road at peak driving hours and raise revenues for transportation projects.
Congestion costs the country $50 billion a year in lost productivity and higher inventory costs. This is a small price to pay for potentially big payback. One recent example: Commuters in Orange County, California who used priced express lanes moved on average four times faster than those who didn't (60 mph vs 15 mph). Those travelling at least 10 miles each way saved as much as an hour a day--an hour they could spend working, with family or doing something more virtuous than clogging up the roads, getting stressed out and polluting the atmosphere.
Impact: In London, congestion pricing caused a 20 percent decline in auto traffic and a 30 percent decrease in congestion delays after a year. The benefits in less-densely populated cities may not be as great.
Source(s): US Department of Transportation, National Surface Transportation Policy and Revenue
4. Increase Funding for Amtrak (10-year impact: $2 B spent)
Amtrak continues to lose money--about $500 million a year--despite almost $30 billion in federal subsidies since its creation in 1971. You'll be upping funding to Amtrak to the tune of $500 million a year.
Amtrak needs a massive investment of capital to enable it to get closer to a "critical mass" that can become, if not profitable, then at least less of a current chronic money loser. Amtrak needs this capital so that it can provide services nationwide. The government gives billions in subsidies to the airlines. Why not Amtrak? Trains are less polluting than planes.
Impact: Rail travel is more energy-efficient than air travel and on short routes (under 300 miles), quicker. Amtrak could use this money to invest in additional short-distance, major city-to-city services which are profitable. For example, there's demand for a passenger rail line that makes connections between San Diego, Los Angeles, San Francisco and Sacramento.
Source(s): The Travel Insider, CBO, Amtrak, Heritage Foundation
5. Increase aviation security fees (10-year impact: $15 B spent)
Every time you buy an airline ticket, you pay $2.50 per flight to pay for anti-terror and aviation security operations. That security-related portion would increase from $2.50 for each leg of a trip to $5.
Our air travel system is essential for the national economy, both for business and shipping. Studies have shown that even your friendly local TSA agents are letting dangerous items slip through. More money would allow us to tighten the security net and make the whole security screening process smoother.
Impact: The additional money would help buy the next generation of screening equipment such as explosive-detection machines and in-line baggage screening systems. The airline industry says you would kill jobs, economic growth and jeopardize local air service to small- and medium-size communities. But beefed up security would make airline travel safer.
Source(s): CBO, GAO, Air Transport Association, Department of Justice, Department of Homeland Security
Science and Nature
1. Fund Research on Clean Energy (10-year impact: $150 B spent)
You'll spend $150 billion over 10 years to launch an aggressive research project on alternative forms of energy, new plug-in hybrid cars, more energy-efficient products and low-pollution coal-fired power plants.
Our nation is addicted to oil and we need to invest in research that would break the chokehold of foreign sources of oil over Americans. If we act boldly, we can create millions of new jobs and transform our economy from one that is dependent on oil from other nations, many of whom are hostile to us, to one that uses renewable, American-made energy.
Impact: In theory, this investment would stimulate the economy, create jobs, and help break the reliance on foreign oil. The amount of money you're spending each year is equal to more than half of the Department of Energy's budget.
Source(s): Obama campaign literature, Department of Energy
2. Double Funds for Weather Science (10-year impact: $44 B spent)
You're increasing by $4 billion the funds for the National Oceanic and Atmospheric Administration, which monitors the weather. The money will improve forecasts and warnings of events such as hurricanes, add money for satellites and other technology to monitor global warming, and improve systems to detect changes in the oceans.
This is an overlooked science and environment agency that does important work with little money, at a time when the weather is of utmost importance. One-third of the U.S. economy is sensitive to weather. Big natural disasters can cause damage of up to $25 billion. And there are about 30 million ocean-related jobs that depend on information about the seas and weather. Give this agency more money to do its work well.
Impact: Doubling the number of ocean buoys that detect hurricanes could save lives and limit damage if warnings improve. Building better satellites to measure climate change could influence the debate over greenhouse gases, which will affect our economy and quality of life. Even after doubling NOAA's funds, it would still consume less than half of what NASA does to probe outer space.
Source(s): National Oceanic and Atmospheric Administration
3. Increase EPA Budget by 50 Percent (10-year impact: $38 B spent)
You're increasing the Environmental Protection Agency's budget from $7.5 billion to $11.3 billion and keeping it at that level over the next decade. The highest funding level in the past few years was $8.4 billion in 2004.
The EPA budget has been essentially flat for the past 10 years. Meanwhile, the agency is being asked to take on more tasks, such as addressing global climate change and preparing for potential terrorist attacks in America.
Impact: You're giving states and Native American tribes more resources to fight pollution, reduce lead exposure, clean up contaminated lakes and rivers, and treat and store waste in ecologically safe ways. You're also paying to clean up brownfields, advancing the aims of the Clean Air Act rules to cut down on "hot spot" sites for mercury, and working to reduce emissions that cause global warming.
Source(s): Office of Management and Budget
4. Increase NSF grants by 50 percent (10-year impact: $35 B spent)
You're boosting funds for the National Science Foundation, which pays for projects from astronomy to geology to zoology. Research topics include the human brain, physics, the environment, social networking, computer technology, fuel cells and energy, nanotechnology, and communications.
The United States is falling fast behind other countries when it comes to scientific and technological achievement. Giving more science grants could prevent further competitive declines. The NSF only funds about one-fourth of the project proposals that it receives each year. We should increase our commitment to science, which can solve our most pressing problems, from climate change to the global food shortage to cybersecurity concerns.
Impact: This increase would restore NSF funding to levels of 20 years ago, with modest annual increases in grants. The National Science Foundation currently funds about 20 percent of all federally supported basic research at America's colleges and universities. With the new money, that would increase to about 33 percent.
Source(s): National Science Foundation, American Institute of Physics, American Association for the Advancement of Science
5. Double Funds for Alternative Energy (10-year impact: $17 B spent)
You're doubling the funds for the Department of Energy's renewable energy programs, from $1.7 billion to $3.4 billion.
Even if you don't believe that man is causing climate change, you can't deny that the country is being held hostage by our need for foreign oil. We should long ago have set aside major funds to promote alternative energies. It's ridiculous that there are no mass-marketed cars that get 50 or 100 mpg. This money could also fuel important new green businesses that will be important players in the 21st century economy.
Impact: The Energy Department's renewable programs would rise to about one percent of the overall federal budget. The research will aim to lower the costs of producing and storing alternative energy. For example, research funds for solar technology would rise from $168 million to $336 million; hydrogen-based technology, from $211 to $422 million; wind energy, from $50 to $100 million; and cars that run on alternative energy, from $213 to $426 million.
Source(s): Department of Energy, Vice President Dick Cheney's energy task force report, Sierra Club, Center for American Progress
6. Reform and Reduce Farm Subsidies (10-year impact: $10 B gained)
You would replace crop subsidies and price supports with a subsidized insurance program that would protect farmers against a decline in farm revenue due to unavoidable natural disasters and market fluctuations.
It's time to overhaul this Depression-era program. Once it helped average farmers stay on the land. Today, $16 billion of farm payments go to big producers and millionaire hobby farmers who own just 10 percent of U.S. farms. Meanwhile food prices are going through the roof, small farmers are getting squeezed out of the business, rural areas are losing population, and the environment is increasingly stressed by industrial agriculture. This is a no-brainer.
Impact:You would phase out direct payments to farmers and replace them with an insurance program that would help all farmers manage the risks of failed crops or market volatility. Small farms would be better equipped to survive shocks to the market and remain competitive. This would help reduce overproduction, and put us in better standing with the World Trade Organization, which has already found our agricultural subsidy policy to be in violation of our trade agreements.
Source(s): American Farmland Trust, Heritage Foundation, Cato Institute, Center for Trade Policy Studies
7. Give Prize for Cheaper Car Battery (10-year impact: $300 M spent)
You're giving $300 million to the first person or company who can produce a cheap, commercially viable car battery to run plug-in hybrids or electric cars that are as powerful as our current vehicles. The battery should be available at 30 percent of current costs.
At $300 million, the prize is one dollar for every person in this country - and a small price to pay for breaking our dependence on oil. The best way to encourage changes in technology is to incentivize it.
Impact: It's hard to gauge whether this will spur faster innovation. The United States does have the largest passenger vehicle market of any country in the world, with more than 250 million vehicles driven by U.S. consumers. If those cars could be replaced with more efficient cars that run largely on electricity, the nation's dependence on foreign oil would decline. But that would require major changes in consumer behavior.
Source(s): McCain campaign literature
Schools and Kids
1. Spend to Educate Disabled Children (10-year impact: $162 B spent)
You'd be meeting a federal goal and paying for 40 percent of the additional cost states pay to educate disabled children--more than doubling the per-child funding to $3,500 from $1,550. In exchange for this money, states must provide a "free and appropriate education" designed to meet students needs.
The federal government has committed to funding 40 percent of the cost of educating disabled children. Educating children with disabilities is much more costly than teaching other students. The federal government should meet its legislative commitment to states, which are obliged to provide all children with a free and appropriate education.
Impact: You would increase educational opportunities for 6.8 million children with disabilities, and help schools make progress towards the main goal of No Child Left Behind legislation: making all students proficient in math and reading by the 2013-2014 school year.
2. End No Child Left Behind (10-year impact: $110 B gained)
You're getting rid of the requirements--and many of the funds--provided under the 2001 No Child Left Behind law. You'll keep funds for special education and grants for low-income children, two programs that received a large amount of funding before NCLB.
No more teaching to the test. The No Child Left Behind Act is a one-size-fits-all nightmare for schools that does nothing to improve learning. Several states say that despite the higher federal spending under the law, NCLB actually costs states more than previous policies. The federal government should keep its nose out of education. Leave it to the state and local authorities.
Impact: Federal spending on K-12 education would drop to 2001 levels, but states would have more flexibility to spend the money as they liked. In the 1990s, before the law passed, the federal government provided about six percent of all funding for K-12 education. Now, the government provides about 8.5 percent of all spending on education.
Source(s): American Federation of Teachers, National Education Association, Department of Education, House Committee on Education and Labor
3. Educate Disadvantaged Children (10-year impact: $124 B spent)
You would boost funding for kids who come to school needing more help with learning because of poverty, unstable families, and limited language and social skills.
New rules require faster progress in reading and math by children who are farther behind standards. For disadvantaged children to catch up, you will need to dramatically increase quality and intensity of education, which requires more resources.
Impact: This money will provide significant new resources to the roughly 50,000 public schools that have a high percentage of disadvantaged children. This money will help those schools offer more intensive academic support to help under-achieving kids meet state standards in major academic subjects like reading and math.
4. More Help to Needy College Students (10-year impact: $41 B spent)
This option continues the trend of helping more poor students attend college. Pell grants increased by an inflation-adjusted 80 percent in the past 10 years. Roughly 5.4 million students (27 percent of undergrads) received Pell Grants in 2007.
Students received about $13.7 billion in Pell Grants in 2007. Most Pell Grants go to the poor, but one quarter went to undergraduates from families with incomes over $100,000. You would phase out subsidies to middle-class and wealthy Americans and target the needy. Some students might be able to give up jobs and focus more on their studies.
Impact: This option continues the trend of helping more poor students attend college. Pell grants increased by an inflation-adjusted 80 percent in the past 10 years. Roughly 5.4 million students (27 percent of undergrads) received Pell Grants in 2007.
Source(s): National Association of Student Financial Aid Administrators, OMB, Department of Education, Census Bureau
5. More for After-School Learning (10-year impact: $11 B spent)
You're adding $1 billion a year to support more 21st Century Community Learning Centers. These Centers are federally financed and offer kids academic help as well as a safe place to go after school.
Great investment. You're keeping kids out of trouble and helping them learn. A better-educated generation of kids will keep America competitive in the future. Parents, particularly moms, have less time today than in the past to watch their kids because of heavy work schedules. It's good for individual families and society at large to support them with more resources for this program.
Impact: About 8 million "latchkey" children in America are left alone each day after school. With these new funds, one million more mostly low-income kids will be able to get supervised, structured help with homework. The program helps students meet standards in core academic subjects, such as reading and math.
Source(s): Departent of Education, Obama Campaign
6. More Funding for Arts in Schools (10-year impact: $0.53 B spent)
You would support arts with more funding for training teachers to ensure that art, dance, music, and theatre are as much a part of education as reading, math and science.
Students with an education rich in the arts have better grade point averages in core academic subjects, score better on standardized tests, and have lower drop-out rates than students without arts education. This is the least you could do to start repairing the damage No Child Left Behind did to arts education.
Impact: The Center for Education Policy found that instructional time for arts education has dropped by 35 percent since federal No Child Left Behind legislation took effect in 2002. In California, enrollment in arts courses dropped by a quarter from 1999 to 2004, or more than 450,000 students. Studies indicate that students who participate in the arts are more likely to participate in a math and science fair, and out-perform their peers on the SAT's by an average of 87 points.
Source(s): Music for All Foundation, Center for Education Policy
Housing and Living
1. More Rental Assistance for Poor (10-year impact: $4 B spent)
You would increase funding to help an estimated two million American families afford a home by providing $336 million a year in new funding.
The additional funding will provide more housing vouchers, especially to homeless families and those who spend more than half of their income for rent or are involuntarily displaced. In 2005, almost nine million low- and moderate-income renter households spent over half of their earnings on housing, a record high. This is especially important now as the economy slows and millions of people are facing foreclosure and mortgage problems and will be looking for affordable rental housing.
Impact: You would be providing essential rental assistance, or "vouchers," to low- income Americans who may not be ready to buy homes or don't want to own one. Studies show vouchers sharply reduce homelessness and housing instability--both of which have been linked to a variety of developmental and health problems in children. They also help families move to lower-poverty neighborhoods with better schools and higher rates of employment.
Source(s): Harvard University Joint Center for Housing Studies, Department of Housing and Urban Development, National Low-Income Housing Coalition, Center on Budget and Policy Priorities
2. Cut Food Stamp Benefits (10-year impact: $0.70 B gained)
Poor households that make less than $26,000 a year can qualify for monthly food stamps. You would eliminate food stamps for households that get less than $10 per month.
Poor households can qualify for monthly food stamps if their income is below a certain level. This option would eliminate food stamps for households with a calculated benefit of less than $10 a month. This option would not put much of a dent in a household food budget and it would reserve food stamps for the neediest.
Impact: You'll be eliminating food stamp benefits for 700,000 households (6 percent of the total) that receive $10 or less a month in food stamps.
3. Tax break for first-time homebuyers (10-year impact: $4 B spent)
Anyone buying a home for the first time would get a refundable tax credit of 10 percent of the cost of the home, up to $7,500. Taxpayers would repay the money, interest-free, over 15 years. Singles earning above $90,000 and couples earning above $130,000 wouldn't be eligible.
The housing market needs a boost and homebuyers need a hand. You'll help both. This is one of the few proposals being debated in Washington that would directly assist homebuyers instead of lenders or others involved in the business. This also improves access to housing among low-income buyers, who have been hardest hit by the meltdown in the housing market.
Impact: About 1.25 million people would likely take advantage of the credit, potentially providing a new infusion of activity in the sluggish housing market.
Source(s): Joint Committee on Taxation
1. Offer Government Health Plan to All (10-year impact: $650 B spent)
Nearly 47 million Americans--including 9 million kids--don't have health coverage. You will cover the uninsured with a plan similar to the one the government gives its workers.
Health coverage is a basic human right: People can die when they don't get the medical care they need. It's ridiculous that one in seven citizens of the richest country in the world doesn't have health coverage. It's even more ridiculous when you consider that 80 percent of the uninsured are in working families, but either their employers don't offer coverage or they can't afford it.
Impact: This proposal would fundamentally change health care in America and give the government a bigger role in paying for it. Taxpayers who already have insurance would be subsidizing those who don't. The public plan would be available to anyone without insurance, regardless of pre-existing conditions. As time goes on, more people with private insurance may choose the public plan. Parents would be required to cover children, employers would have to insure workers or pay into the public plan. People who join would pay fees such as premiums and copays, but the working class would get subsidies.
Source(s): Obama Campaign, The Commonwealth Fund
2. Computerize Health Information (10-year impact: $70 B spent)
Republicans and Democrats agree electronic records would improve efficiency, but high costs and the absence of a standard system have slowed adoption. You'd pay to create uniform standards and give doctors incentives to change to electronic records.
Why can we pay bills, order food, and send messages electronically but we don't have national standards for digitizing medical records? Electronic records can reduce unnecessary health care spending caused by preventable mistakes, duplicate tests and inefficient paper billing systems. Processing paper claims costs almost twice as much as processing electronic claims. It's about time to adopt this technology, which would save the health system tens of billions of dollars per year.
Impact: As many as 98,000 patients die every year from preventable medical mistakes by doctors and other health professionals. Electronic records could reduce some of the errors caused by hard-to-read, missing or disorganized paper records. The Rand Corporation estimates that electronic records could save the health care system up to $77 billion per year by avoiding duplicative tests, problems with drug interactions, and other inefficiencies that can hurt patients.
Source(s): Rand Corporation, Commonwealth Fund, MedPAC, Institute of Medicine, Obama and Clinton campaigns
3. Simplify and Raise Medicare Fees (10-year impact: $31 B gained)
Medicare patients pay separately for care received in the hospital or as an "outpatient." For instance, seniors who were hospitalized in 2007 had to pay a deductible of $992 for every hospital stay, plus $131 more for doctors' visits and other outpatient care. You are creating one system with a single deductible of $500 per year, and capping out-of-pocket costs at $5,000.
Ah, isn't this easier? The new system will be much simpler for the average senior to follow. The $5,000 cap also would protect the sickest seniors with the highest medical costs. You'll also charge 20 percent copays for all services, instead of fees that vary depending on the type of treatment. The uniform copays will allow seniors to compare their treatment options without being swayed by how much they'd have to pay out of their pockets. The new system also will cut monthly premiums.
Impact: In the year after this policy takes effect, about three-fourths of seniors would pay modestly higher costs, $500 on average. Fifteen percent would see no change in their costs, while the sickest 10 percent would get a big break, seeing their copays drop by an average of $4,000.
4. Raise Medicare eligibility to 67 (10-year impact: $24 B gained)
Americans get access to federally-funded health insurance, Medicare, starting at age 65. And if we make it to 65, actuarial tables show we'll probably live into our early 80's. Under this policy, you would leave the status quo until 2017, and then you would gradually push back the age when Americans get Medicare from 65 to 67. The ten-year savings are just $24 billion, but the twenty-year savings are estimated to be $513 billion.
You would ease mounting pressures by encouraging more people to delay retirement. Phasing in the change over 20 years will give people time to prepare. This option also would make Medicare consistent with Social Security's full retirement age. That's only fair.
Impact: Americans born in 1952 or after would be affected as the Medicare age rises slowly starting in 2017. By 2028, everyone would get Medicare at age 67. Seniors who retire earlier than 67 would have to buy their own health insurance or some might choose to continue working until 67. However, some of the estimated half a trillion dollars in savings by 2028 might be offset by added government costs, such as more seniors applying for government disability benefits if they can't work until age 67.
Source(s): CBO, Social Security Administration Actuarial Tables
5. Increase Medicare costs for wealthy (10-year impact: $10 B gained)
All but the poorest seniors who get Medicare drug coverage pay the same share of monthly premium costs, as a proportion of their income (the poorest get subsidies to help). You'd start charging seniors who earned more than $80,000 or couples who earned more than All but the poorest seniors who get Medicare drug coverage pay the same share of monthly premium costs, as a proportion of their income (the poorest get subsidies to help). You'd start charging seniors who earned more than $80,000 or couples who earned more than $160,000 in 2007 as much as $80 more per month, on top of the $35 drug premium they already pay.
Medicare accounts for around one of every eight dollars in government spending, and that's going up fast. We have to stop this, or else make drastic cuts to non-entitlement programs such as roads or schools. This doesn't solve the whole problem, but when combined with other changes it could make a difference. It also sets the stage for more cost increases for wealthy seniors in the future. They can afford to help lift the burden from younger generations.
Impact: About 5 percent of Medicare's seniors--or 2 million people--would have to pay more. The Congressional Budget Office projected that about 1 percent of seniors would delay their enrollment or decide not to enroll at all because of the higher premiums.
Source(s): CBO, OMB, National Committee to Preserve Social Security and Medicare, Department of Health and Human Services
1. More Help for Widows and Widowers (10-year impact: $275 B spent)
Widows and widowers receive between 50 and 67 percent of the Social Security benefits that the couple would have received if the spouse were still alive. This would raise the benefit to at least 75 percent of what the couple would have received.
You'd be making the system fairer. Widows and widowers from single-income families get more in Social Security than those where both worked. This would even the scales.
Impact: This option could raise payments for the 5 million widowed people who get Social Security benefits based on their deceased spouse's earnings. Almost 15 percent of elderly widows and widowers are poor, compared to roughly 5 percent of seniors with spouses. Some studies show that surviving spouses need about 75 percent of their previous household income to maintain the same standard of living.
2. More Low-Income Worker Benefits (10-year impact: $140 B spent)
Social Security gives workers who consistently received low incomes for more than 20 years a minimum benefit. But the benefit has shrunk over time because of how its annual growth is calculated. Now, fewer than one percent of retirees get it, and no one will get it after 2010. You'd be adjusting this benefit for inflation, and boosting benefits for longtime, low-income workers.
People should have more control over their retirement benefits. The government is currently investing Social Security surpluses in low-yielding Treasury bonds. Let taxpayers put some of their contributions into personal accounts, and they'll be able to get better returns than the government does now. This proposal also helps ensure that Social Security funds go to Social Security, instead of other government programs.
Impact: would add two years of life to the system's trust fund, which is projected to run out in 2041. But it would increase federal debt by more than $1 trillion in the first decade. For workers, it could be a good deal--but unlike the current benefit, there's no guarantee. An average-salary worker born in 1985 who retired at 65 might get a monthly payment of $126 if she invests wisely, which is more than twice what she'd get under the current system.
Source(s): CBO, Social Security Administration
3. Raise the Social Security Age (10-year impact: $108 B gained)
Currently, people qualify for full Social Security benefits at 66, soon to be 67. But the average American is living to 78, and counting. You'd be speeding up the increase to 67 and then gradually moving it up: Generation X'ers born in 1969 wouldn't qualify until they turned 70.
Americans live--and collect Social Security benefits--for longer periods than when Social Security was created in 1935. Today, people who are 65 have an average life expectancy of 18 more years, and that is likely to continue to rise. Seniors today are more healthy and active than ever. We need to adjust our expectations to the times and recognize that we all have to work a few more years before retirement. That's the only way we can save social security and make sure it is available for us when we really need it.
Impact: Under this plan, the Social Security trust would increase by about $2.3 trillion in 2029. That's enough to close at least 20 percent of the Social Security program's long-range funding gap, according to the AARP Public Policy Institute.
Source(s): Office of the Actuary at the Social Security Administration, CBO
4. Slow Social Security Benefit Rise (10-year impact: $7 B gained)
You'd slow increases in Social Security benefits by tying them to consumer prices, instead of wages. Economists say tying benefits to wages gives more of a boost than linking them to consumer prices, which tend to rise more slowly. This change wouldn't kick in until 2016, so the 10-year savings would only be about $7 billion, but the 20-year savings would be close to $450 billion.
Increases in Social Security spending will bust the federal budget if nothing is done to slow them. This is a smart way to get a handle on runaway costs and put the federal budget on firmer footings. Plus, if people continue to live longer, you'd still be giving future seniors a bigger total benefit over their lives than what seniors in the recent past got. And you're giving younger people, who'd be affected the most, time to adjust and save more for retirement.
Impact: Workers who started getting benefits in 2030 would get about a quarter less than under the current system. Those who qualify in 2050 would get about 40 percent less. But Social Security would get new life as a result. By 2050, you'll save about a third of the system's costs.
Source(s): Office of the Actuary at the Social Security Administration,CBO
1. Cut Discretionary Spending (10-year impact: $265 B gained)
You'll cut discretionary spending by 5 percent for domestic agencies. That includes all domestic spending that Congress controls but not mandatory spending such as Social Security or discretionary spending for international affairs and the Department of Defense.
What taxpaying American family couldn't reduce its budget by 5 percent? Why should it be so hard for the government to do the same? And you're not even talking about 5 percent of the entire budget. This would force agencies to spend taxpayers' money more carefully and efficiently. They could get by with fewer bureaucrats, less travel and more partnering with the private sector. This won't close the federal deficit gap, but every cut helps.
Impact: The programs affected by this cap account for about $500 billion or 15 percent of the federal budget. The cuts themselves -- about $25 billion -- would reduce the overall budget by about 1 percent.
Source(s): Department of Justice, White House, Senate Budget Committee
2. Eliminate "Pork Barrel" Projects (10-year impact: $242 B gained)
Remember the $2 billion "bridge to nowhere" that benefited only a small number of Alaskan villagers? Every year, Congress adds thousands of projects that are not called for in federal law, not requested by the president, not vetted in congressional hearings and not intended to serve anyone but a small group or local interest. In this year's budget, the watchdog group Taxpayers for Common Sense found 12,881 earmarks worth $18.3 billion, which was 23 percent lower than the 2005 number, but still more than congressional leaders promised. You're channeling Republican presidential contender John McCain and killing all earmarks.
Taxpayers work hard for their money and deserve a close watch on the federal purse. If you eliminate wasteful spending, you can fund a lot more priorities that benefit all Americans--or send the money back through lower taxes. Plus, earmarks are the easiest method for nefarious influence-peddlers to get their legislators to do their bidding.
Impact: Earmarks make up less than 1 percent of the federal budget, but they fund remote airports, community action programs and myriad other projects that may not survive without federal help.
Source(s): Citizens Against Government Waste, Taxpayers for Common Sense, Senator John McCain
3. Double FDA Funding (10-year impact: $18 B spent)
Currently, the average American pays about 2 cents per day to fund the FDA, which oversees about one-quarter of the economy's products. Doubling that amount would provide additional food inspections, better tracking of the safety of drugs and closer monitoring of medical devices, among other things.
Considering how vital the FDA is to the health of Americans, it's ridiculous that it gets such little money. The FDA gets only $1 for every $200 that's spent on Medicare, for instance, or every $100 for Medicaid. Even the research at the National Institutes of Health outguns the FDA by 15-to-1. Sure, it's important to pay for medical coverage or cancer research, but isn't it also important to know whether the drugs or devices Americans use are killing them?
Impact: The FDA could inspect 10 times as much imported food from China (currently only 1 percent is inspected). In the U.S., you could inspect 20,000 high-risk food processors every year, 80,000 lower-risk processors every two years, whereas now the FDA now inspects U.S. food processors only once per decade. And you'd increase drug safety testing: About 80 percent of U.S. drugs come form abroad, but the FDA has inspected only 431 of the 7,000 foreign drug makers. The FDA could inspect more than 1,700 firms each year and every firm each four years.
Source(s): OMB, Coalition for a Stronger FDA
4. Tighten Product Oversight (10-year impact: $1 B spent)
Staff and funding at the Consumer Safety Product Commission are far below levels of a decade ago, when there were fewer imports. You'll increase its budget by more than a third, to $110 million, and hike the maximum fine for violating safety standards from $1.8 million per violation in 2007 to $100 million.
The public's health is at stake. Give the commission more resources and it'll do a better job of ferreting out problems. Last year, 29 million toys were recalled--many after consumers or companies--not the commission--found safety problems. Can you imagine how many more dangerous products would be kept out of the hands of Americans if we had a commission that actually had some resources to do its job?
Impact: The commission has an average of one inspector for about every 1,000 types of products the panel oversees. One inspector oversees all the toys sold in America. The entire staff is about 420 people, half its size in the 1980s. Your money will upgrade facilities and hire 100 full-time workers, almost a 25 percent increase.
Source(s): CBO, Consumer Safety Product Commission
If these proposals all went through uninhibited, our debt would be reduced from 49.9% of the GDP in 2009 (11.2 Trillion) to 17.3% of the GDP ($3.8 Trillion) in 2019. This would postpone the budget bust until after 2070 (right now it’s estimated for 2031). And despite my being called a big-government liberal, these proposals would actually reduce the size of government from 21.4% of the GDP in 2009 ($4.8 Trillion) to 19.3% of the GDP ($4.3 Trillion) in 2019.
So there you have it. If I were Barack Obama, these would be the proposals I would make to the legislators and the American People. Any thoughts and/or opinions?
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8 years ago