We do need to cut the deficit. And here's how to do it.

Pab Sungenis

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Tue Nov-09-10 08:51 AM
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We do need to cut the deficit. And here's how to do it.

The deficit hawks who went into hibernation during the Presidency of George W. Bush woke up when a Democrat came back into the White House. This is slightly amusing, since the only Presidents in the past 50 years to present balanced budgets were Democrats (LBJ who presented the 1969 budget in 1968, and Clinton's surplus budgets of 1998, 1999, and 2000), but we shouldn't dismiss their arguments out of hand. The deficit does need to be cut, and here are just a few places to cut it:

Pay cuts

You might think that the salaries paid to congressmen and the executive branch are a drop in the bucket, but the salaries of just the members of the House of Representatives, the Senate, the cabinet, the Vice-President, and the President come to over $96 million each year. If all of those officials were to take a 50% across-the-board tax cut, the amount saved would be the same as all of the funding for the Congressional Budget Office or for the efforts at reducing greenhouse gases in the 2010 budget. It might be seen by some as a symbolic cut, but it would preserve funding for other areas and would show that the government is serious about cutting the fat from the budget.

End the wars now

Say what you will about Afghanistan, but there is no way you can argue that Iraq was anything but a war of choice, and it's a choice we can no longer afford. The wars in Afghanistan and Iraq are the main reason our debt shot up so much in the oughts, and the largest reason why the deficit is so high now. Pulling the rest of the way out now will save us $72 billion in Afghanistan alone in just the first year. This would fully fund the full health-care cost for every veteran in the United States, to help clean up some of the mess we made with these wars. It also won't be a long-term fix, but selling half or three quarters of the new permanent bases we built in Iraq, not to mention the Disneyland-sized embassy we built there, to the Iraqi government would provide some much needed capital right away.

Restructure the military

There are many programs in the military that are woefully out of date or useless in actual combat which should be scrapped. For example, we no longer need the large fleet of strategic bombers that we used to maintain to guard against the Soviet Union, which has been gone for nearly 20 years. Our land-based and submarine-based ICBM's are more than enough to maintain a nuclear deterrent, and could be "built down" by 75% and still remain an effective deterrent. We also need to take long hard looks at major weapons systems ordered despite the military's advice, redundant systems, and waste and pork in the "defense" budget. Not all of the money saved from these steps will go right toward the deficit, however; a portion of it needs to go to several long-neglected areas of the military. First, we need to raise the pay and family benefits for our troops. Second, we need to de-privatize the military by getting rid of outside contractors and rebuilding the Army Corps of Engineers and Quartermaster Corps, and putting our soldiers and marines back in charge of protecting our embassies and providing logistical support. Net result? We can safely cut the budget for the Department of Defense by $130 billion.

Corporate tax loopholes

On the books, our country may have some of the highest business taxes, but the actual effective tax rate for most of the largest corporations is 0 thanks to ludicrous loopholes. As an example, ExxonMobil -- the most profitable corporation in world history -- paid no federal income tax last year. Instead, it got more than a billion dollars in tax refunds and credits! Restructuring the Alternative Minimum Tax for corporations and ending most forms of Corporate Welfare can cut our budget deficit by nearly 10% off the top.

End the Bush Tax Cuts

By allowing the tax cuts on the top bracket to expire, we can cut $700 billion from the deficit over the next 10 years. This would allow the cuts on the lower and middle classes, where they will do the most good fueling the economy, to remain in place while still letting the wealthy pay less in taxes than they did in 2000, but pay a fairer share toward the deficit their tax cuts created.

Agricultural subsidies

We spend anywhere from $5 billion to $7 billion each year in ethanol subsidies for multi-billion dollar international agriconglomerates. We should immediately cut this subsidy, redirecting half of it to small family-owned farms and taking the rest to cut the deficit.

There you go. Those cuts alone will bring the deficit down by almost 20%, bringing it back down under a trillion dollars again and providing a base for additional cuts. Best of all, this 20% cut in the deficit can be done with the least inconvenience and the least hardship toward the American people, making sure that the austerity program to come has the least negative side-effects possible.