September 10, 2015
Column #1,776
How To Cut the Deficit II
(Second of a two-part series)
By Mike McManus

America's federal deficit is $474 billion, but will rise to $1 trillion by 2024 without new cuts. The Baby Boom Generation has only begun to retire, so costs will soar for Social Security and Medicare, and those working to pay the tax bill are shrinking.

The Concord Coalition Budget Game gives taxpayers a variety of ways that the deficit could be cut over the next decade. Each option offers pro and con arguments, the estimated savings and the percentage of people who have favored each option.

For example, if NASA cut space exploration, taxpayers would save $77 billion over a decade. Half of participants agreed with that.

By contrast, gradually raising the age when Social Security is given to 70 by 2038 would save only $35 billion, and is opposed by 81% of voters.

Here are some possible spending cuts, the 10-year savings and public support according to Concord Coalition. Which do you favor or oppose?

1. Freeze federal discretionary spending: $929 billion 76%

2. Cut the federal workforce by attrition: $49 billion 43%

3. Eliminate development of a new bomber: $26 billion 68%

4. Limit Medicare premiums for Part B to 35% of cost: $299 billion 34%

5. Limit Affordable Care subsidy to 300% of poverty $109 billion 19%

6. Limit punitive damages for Medicare lawsuits: $60 billion 23%

7. Increase maximum earnings cap for Social Security: $672 billion 76%

8. Comprehensive tax reform, without lower rates: $1.2 TRILLION 4%

The Committee for a Responsible Federal Budget has a similar "game" which gives readers a way to consider various options for closing the Social Security funding gap. To see "The Reformer," see http://crfb.org/socialsecurityreformer

For example, I favored slowing the benefit growth for the top 70% of wage earners, increasing the retirement age to 69 and then indexing it to longevity, reducing the cost of living adjustment, subjecting all wages to the Social Security payroll tax, requiring newly-hired state and municipal workers to pay for Social Security.

The result? My proposals would save about $1.6 trillion by 2075 and reduce the funding gap by 106% "but not quickly enough."

The Committee had a more comprehensive package of reforms to stabilize the debt. See http://crfb.org/stabilizethedebt.

I believe the nation needs to have this kind of a debate – not just the handful of people who will go online to the Concord Coalition.

I propose that either or both of these organizations approach TIME, the Associated Press, NBC, CBS or ABC, plus PBS and ask that they offer options like those outlined above in a coordinated effort that I call an "American Town Meeting."

One would be an American Town Meeting To Cut Federal Spending. On a given weekend, TIME, AP, NBC and PBS would frame ten ways that federal spending might be reduced. The same choices would be presented on all media, but each would have the freedom to present the pros and cons of options. The public would be encouraged to respond with their choices via Facebook or Twitter.

Two weeks later a second American Town Meeting on Tax Reform would offer various ways to cut the deficit by reducing loopholes in the present tax law. For example, viewers could vote for or against raising tax rates for stock sales and options might be offered on mortgage interest rates. For example, deductions for mortgage interest might be limited to mortgages of $500,000 or less and to one house, not for vacation houses as well – or they might be eliminated altogether.

Each proposed cut of federal spending or increase in tax rates would outline how much they would reduce the federal deficit. The news media would interview people who would be impacted by these changes.

The Associated Press would offer stories that would be picked up by more than 1,000 daily newspapers in the country. TIME has a circulation of more than 3 million. A network Special might be seen by 10 million people.

The Concord Coalition or the Committee for a Responsible Federal Budget could publish a paperback book, with details on pros/cons of various options.

I ran a project like this in Metro New York that involved all 18 TV stations, (two in Spanish), 28 daily newspapers, and a paperback book that sold 100,000 copies. More than 120,000 "ballots" were mailed in. One result is that the six U.S. Senators from New York, New Jersey and Connecticut pushed for passage of the Earned Income Tax Credit that became law.

Why not create two American Town Meetings?