February 5, 2015
Column #1,745
Give People A Voice on the Budget
By Mike McManus

It is time to give the people a voice on the federal budget.

It would be an alternative to years of gridlock visible when President Obama released his $4 trillion budget this week, and was met with tart Republican reactions:

House Speaker John Boehner labeled Obama’s proposal as “a plan for more taxes, more spending and more of the Washington gridlock that has failed middle-class families.”

Obama described his goal Monday: “I want to work with Congress to replace mindless austerity with smart investments that strengthen America.”

How could people be given a voice amidst this din of rhetoric? My answer is to create “American Town Meetings” with the help of the news media. Imagine this on a weekend in the spring:

USA Today or TIME magazine’s cover story presents “10 Choices to Cut Federal Spending.” NBC or CBS airs a two-hour special with the same “10 Choices to Cut Federal Spending.” However, each has done its own reporting on the pros and cons of the options.

The public is invited to study the Choices, and to register their opinions on the options via Facebook or Twitter.

What might some of the choices be and their savings over a decade?

1. Should the age of retirement be raised to 70, since people live and work longer? Savings: $80 billion.

2. Repeal the “individual mandate” of Obamacare forcing the uninsured to buy health insurance, saving $550 billion.

3. Use a more accurate measure of inflation for Cost of Living Adjustments, saving $150 billion.

4. Reduce foreign aid by 25% saving $150 billion.

5. Block grant food stamps and reduce it to 2008 levels, saving $140 billion.

Census reported last week that the number of children with married parents who
received food stamps doubled since the bottom of the recession from 9 million to 16 million in 2014 (a fifth of all children) – though unemployment has fallen from 10% to 5.6% in those years. Why? The rules changed so that if parent got a job, it did not need to be revealed to food stamp bureaucrats. This is the kind of reporting that the news media would give on each choice.

Two weeks later there would be an American Town Meeting on Tax Reform, with 10 more choices like these, raising these sums over a decade:

1. Impose a 5.4% surtax on income above $1 million, raising $550 billion.

2. Gradually phase out mortgage interest deduction, raising $510 billion.

3. Eliminate state and local tax deduction, raising $970 billion.

4. Close oil and gas loopholes, raising $170 billion.

5. Raise Social Security payroll tax cap from $117,000 to $200,000, raising $550 billion.

The President proposed $1.5 trillion in tax increases to cover his spending hikes for such
proposals as universal preschool and free community colleges. Even if enacted, the total federal debt would grow from $18 trillion to $26 trillion. Interest on the federal debt would soar more than three-fold from about $230 billion now to $800 billion a year.

This is unsustainable. It would put an unconscionable debt burden on our children and grandchildren. The baby boom generation born 1946-64 is only beginning to retire. Think of the cost of adding another 70 million to Social Security and Medicare rolls. Those cost increases are unavoidable.

Declining infrastructure also needs to be rebuilt. New York airports are still using vacuum tubes to land planes. With modern computers twice as many planes could land in an hour.

Therefore, it is essential to cut federal spending on popular programs like Veteran benefits, federal aid to education and Medicare. Since Medicare was passed in 1965, Americans are living five years longer. Yet the age when Medicare is given has not risen. Tax increases will also be needed far beyond Obama’s proposed hikes on the rich and corporations.

Therefore, it is essential for America to have a big debate on federal spending and taxes.

I ran five TV Town Meetings in Metro New York in 1973 that involved 18 TV stations and 23 daily newspapers. Some 133,000 ballots were mailed in. People voted decisively. Asked what should be done to raise the income of the working poor: nothing; raise minimum wages; or support low wages with federal cash supplements, 76% favored options two or three.

Result: all six area U.S. Senators introduced a bill that became the Earned Income Tax Credit.

Two American Town Meetings would educate the public on the depth of the issues, and give people a voice on real choices for reducing America’s huge deficit.

A consensus will emerge on many issues nudging Washington to pass needed laws.