Putting Taxpayers First: A Federal Budget Plan to Benefit the Next Generation of American Taxpayers
by Stephen Moore on 01/13/2004
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If there is any overriding theme of the economic and fiscal policy making scene in Washington over the past two decades, it might be this: we fought a war against big government, and big government won. In just the past three years the federal budget has exploded in size by more than one half trillion dollars.
The sudden spurt of government spending and the resulting mountainous budget deficits are all the most unexpected given that they have occurred under a Republican Congress and a Republican president. After seven budgets designed by the Republican majorities in the House and Senate, the budget is bulkier than ever before. The 108th Congress is spending at a faster pace than any Congress since before Woodstock.
Starting in the mid-1980s, America’s private industries restructured themselves, sweated out inefficiencies, cut costs, and raised productivity levels. The only industry that has been immune from this productivity revolution has been government itself.
By two-to-one margins Americans still say they prefer less government services and lower taxes to more government and higher taxes. Two-thirds of voters consistently say they think their taxes are too high, not too low. The goal of government downsizing is not flawed, but the game plan has been. For one thing, budget cutters have not made an effort to garner bipartisan support. Furthermore, they have failed to convince the public that there is a financial and freedom dividend from smaller government.
This study argues for linking the crusade for a streamlined government with pro-growth tax cuts and debt retirement to benefit future generations. It prescribes commonsense budget reforms that hopefully will appeal to both fiscally conservative Republicans and Democrats, to the extent they exist anymore in Washington. The plan would reduce the size of government by more than two-fifths over the next 10 years. Instead of the budget growing to $2.6 trillion by 2011 as scheduled, it would cost $1.5 trillion.
This comprehensive fiscal plan involves nine commonsense steps to shrinking the size of government:
- eliminate numerous programs that have either outlived their usefulness or proven their uselessness
- privatize federal assets that belong in the private sector and use the proceeds to retire the national debt
- devolve transportation, education, housing, and economic development programs to the state and local level
- replace all federal welfare programs with a generous earned income credit that ties public assistance directly to work
- restructure federal entitlement programs ways that will promote cost saving, better performance, and greater reliance on market principles
- abolish all corporate welfare in order to save $100 billion a year
- end welfare for the affluent by eliminating all federal payments to Americans with net assets or incomes of more than $1 million a year
- reform the federal budget rule-making process to eliminate the pro-tax and spend bias in Congress
- tie tax cuts to federal spending reductions to build political constituencies for smaller government.
The payoff would be huge: A freer and more prosperous America in this new century for our children and grandchildren.
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