Cutting United States Deficit Now

[Guest fiscalcommission.gov]

Reduce Congressional & White House budgets by 15 percent. Like most areas of government, the budgets for Congress and the Executive Office of the President have grown significantly in recent years. For example, legislative branch appropriations almost doubled from FY2000 through FY2010. In order to tackle our fiscal imbalance, everyone must sacrifice. That should include those at the top. This proposal would cut the budgets for Congress and the White House by 15 percent, saving about $800 million in 2015.

 

Freeze federal salaries, bonuses, and other compensation at non-defense agencies for three years. During the Great Recession, most private sector employees have seen their wages frozen, and some have even watched wages decline. In contrast, federal workers have seen their wages increase due to automatic formulas in law that provide them with step-in-grade and cost-of-living-adjustments. For example, federal civilian employees received a 2.0 percent raise in 2010, a 3.9 percent raise in 2009, and a 3.5 percent raise in 2008. This proposal would institute a three-year cross-agency freeze on federal pay, including salaries and those benefits linked to pay raises, to reflect the current economic and fiscal climate.

 

Cut the federal workforce by 10 percent (2-for-3 replacement rate)The government's civilian, nonmilitary work force peaked in the late 1960s at about 2.3 million. In the 1990s it began to drop, reaching a low of 1.778 million in 2000. Recently, however, the size of the federal workforce has climbed back over 2 million Full-Time Equivalents (FTE). This proposal would reduce the federal workforce by 200,000 by 2020.

 

Under this proposal, the government could hire two new workers for every three who leave service. Thus the bill is not a rigid hiring freeze, but a workforce reduction plan that allows the government to continue bringing in new workers at a slower pace. To decrease the impact on overall national employment levels, this proposal would not take effect until 2012. All agencies would be subject to the hiring restrictions. However the president would have discretion to exempt certain agencies if national security were impacted, as long as the overall workforce targets continued to decline and reach the target of 200,000 by 2020.

 

Eliminate 250,000 non-defense service and staff augmentee contractors. During the 1990s the total size of the federal workforce was reduced by over 402,000 full-time employees (FTE), levels not seen since the Eisenhower Administration. At the same time, there was only a marginal increase in the number of contract jobs, producing considerable savings for taxpayers. In fact, according to Paul Light of New York University, the true size of the federal government was 12,112,000 in 2002, an increase of only 107,000 from 1993, almost all contract slots.

 

Yet, from 2002 to 2005, the federal government experienced a marked increase in the number of contract positions. By the end of 2005 (according to Light’s estimates), more than 2.4 million additional contractors had been placed on the federal payroll (more than the total number of civilian employees). While contractors provide useful services – sometimes at a lower cost than the federal government – their numbers are simply too high in light of the current budget deficit.

 

Under this proposal, non-defense federal agencies would require contractors to provide a headcount of how many employees are working on federal contracts, and what specific jobs they are fulfilling. Second, upon completion of the inventory, non-defense agencies would be required to cut the number of contract slots by 250,000, specifically targeting those contractors who provide services and/or are used to augment the civilian federal workforce. This cut could be across-the-board, or it could be on an agency by agency basis. This would save about $18.4 billion in 2015.

 

Cap the number of federal political appointments at 2,000. Senators Russ Feingold (D-WI) and John McCain (R-AZ) have introduced a proposal to cut the number of political appointments from 3,000 to 2,000. Specifically, the Feingold-McCain legislation would institute a hard cap on the number of political appointments at 2,000, but the bill would give the Executive Branch the discretion to determine how to reduce the number of appointees and give it until 2012 to do so. Positions outlined in the Constitution would not be affected by the bill. This option would save about $100 million in 2015.

 

It should be noted that the number of political appointees has risen dramatically in recent years. Since 1980, the number of political appointees has shot up by nearly 28 percent. The proposal would also reduce the amount of time the Administration and Congress would have to spend wrangling over vetting and confirming appointees.

 

Cut federal travel budget. One of the first things companies cut when faced with budget problems is travel. Yet, despite our record deficits, government expenditures for travel have grown by leaps and bounds. For example, in FY2001, federal agencies spent approximately $9 billion on travel for mission-related business around the world. In FY2006, that figure reached just over $14 billion—an increase of 56 percent.

 

Some of the recent increases may be due to fluctuations in oil prices and the demands of the wars in Iraq and Afghanistan. Even so, the fact remains that year after year, agencies continue to spend more on travel than they project (both before and after 9/11). Furthermore, the fact that travel spending is rising at such a rapid pace would seem to be counterintuitive, considering that the last decade has witnessed remarkable improvements in telecommunications technology (including video conferencing, web-casting, etc.) that should have decreased the need for in person face-to-face meetings and onsite visits.

 

The Department of Energy (DOE) announced this year that it will adopt the suggestion to reduce travel costs by increasing reliance on video teleconferencing when practical. To fund the upfront capital costs associated with this effort, DOE will plan to reduce travel budgets by 5 percent versus its 2009 travel expenditures. The savings from this reduction will be used to assist the Office of the Chief Information Officer in implementing a strategy of enhanced reliance on video telecommunications to bring down travel costs in 2011 and beyond.

 

By increasing reliance on computer web cameras and other video teleconferencing equipment, including instant chatting, the Department will reduce the need for some business travel. This will yield savings not only in terms of travel dollars, but also in travel time for federal workers and contractors, as well as positive externalities of increased safety from eliminating unnecessary travel and reduced greenhouse gas emissions. DOE estimates this policy change will save $3 million in FY 2011. Applying DOE’s policy to all federal agencies (excluding the Postal Service) would save $4.22 billion over ten years.

 

http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/Illustrative_List_11.10.2010.pdf

[Guest LAW]

U.S. Sen. Bernie Sanders (I-Vt.) today issued the following statement in response to a proposal by the co-chairmen of a White House deficit commission, Erskine Bowles and former Sen. Alan Simpson:

 

“The Simpson-Bowles deficit reduction plan is extremely disappointing and something that should be vigorously opposed by the American people. The huge increase in the national debt in recent years was caused by two unpaid wars, tax breaks for the wealthy, a Medicare prescription drug bill written by the pharmaceutical industry, and the Wall Street bailout. Unlike Social Security, none of these proposals were paid for. Not only has Social Security not contributed a dime to the deficit, it has a $2.6 trillion surplus.

 

“It is reprehensible to ask working people, including many who do physically-demanding labor, to work until they are 69 years of age. It also is totally impractical. As they compete for jobs with 25-year-olds, many older workers will go unemployed and have virtually no income. Frankly, there will not be too much demand within the construction industry for 69-year-old bricklayers.

 

“Despite all of the right-wing rhetoric, Social Security is not going bankrupt. According to the Congressional Budget Office, Social Security can pay every nickel owed to every eligible American for the next 29 years and after that about 80 percent of benefits.

 

“If we are serious about making Social Security strong and solvent for the next 75 years, President Obama has the right solution. On October 14, 2010, he restated a long-held position that the cap on income subject to Social Security payroll taxes, now at $106,800, should be raised. As the president has long stated, it is absurd that billionaires pay the same amount into the system as someone who earns $106,800.

 

“With the richest people in this country getting richer and the middle class in decline, it is absurd that billionaires pay the same amount into the Social Security system as someone who earns $106,800.”

[Guest LAW]

CBO estimates that the federal budget deficit was slightly less than $1.3 trillion in fiscal year 2010 and $125 billion less than the shortfall recorded in 2009. The 2010 deficit was equal to 8.9 percent of gross domestic product (GDP), CBO estimates, down from 10.0 percent in 2009 (based on the most current estimate of GDP). The 2010 deficit was the second-highest shortfall—and 2009 the highest—since 1945, relative to the size of the economy. CBO’s deficit estimate is based on data from the Daily Treasury Statements and CBO’s projections; the Treasury Department will report the actual deficit for fiscal year 2010 later this month.

 

The Treasury recorded a deficit of $91 billion for August, about $5 billion less than CBO had projected on the basis of the Daily Treasury Statements. That difference occurred largely because spending for defense and education was lower than expected.

 

The deficit in September 2010 was $32 billion, CBO estimates, $14 billion less than the shortfall recorded a year ago. Quarterly payments of estimated individual and corporate income taxes typically result in a surplus for September; however, revenues remain relatively low

and spending was relatively high, resulting in the 24th consecutive month of budget deficits.

 

CBO estimates that receipts in September were about $26 billion (or 12 percent) higher than receipts in September 2009. Corporate income tax receipts, which rose by about $20 billion, account for most of the increase; gross corporate income tax receipts grew by $17 billion (or 45 percent), and corporate refunds fell by $4 billion (or 44 percent). Withholding for income and payroll taxes increased by $6 billion (or 5 percent). Nonwithheld individual income and payroll taxes, mainly from quarterly estimated payments of 2010 income taxes, rose by $2 billion (or 3 percent). Other receipts fell by $2 billion, on net.

 

Outlays were $13 billion (or 5 percent) higher in September than in the same month last year, CBO estimates. The estimated net cost of the Troubled Asset Relief Program (TARP) was about $13 billion higher this September than last September; that difference occurred almost entirely because a reduction in the previously estimated subsidy costs for the program was

recorded in September 2009. Spending for the Department of Education was up by $8 billion from last September. Expenditures for the Federal Deposit Insurance Corporation and net interest on the public debt rose by $3 billion each, and spending for Social Security and Medicaid increased by $2 billion each. Those increases were partially offset by a $9 billion reduction in net payments to Fannie Mae and FreddieMac and by an increase of $9 billion in the Treasury’s interest earnings from credit programs.

 

CBO estimates that the federal deficit was slightly less than $1.3 trillion in 2010, down from slightly more than $1.4 trillion in 2009. Outlays declined by $67 billion, and revenues increased by $57 billion. The estimated deficit is about $51 billion lower than CBO projected in

August. Outlays were lower and revenues were higher than previously expected.

 

CBO estimates that total receipts rose by 3 percent in 2010, following declines in each of the prior two years. Growth in receipts of corporate income taxes and remittances from the Federal Reserve more than offset reduced collections of individual income and payroll taxes in 2010.

 

Corporate income tax receipts rose by $53 billion (or 39 percent) in 2010; improved economic conditions and the expiration of legislation that allowed taxpayers to take higher depreciation charges in 2009 has resulted in higher taxable profits in 2010. (The Small Business Jobs Act of 2010, which became law in late September, extended through tax year 2010 the allowance for higher depreciation charges; that retroactive change will reduce revenues in fiscal year 2011.) Receipts from the Federal Reserve increased by $42 billion this year, to more than double the amount received in 2009. The central bank’s increased profits resulted from an enlarged portfolio and a shift to riskier and thus higher-yielding investments in support of the housing market and the broader economy.

 

Those increases were partially offset by a drop in the total of individual income and payroll taxes, which were about $43 billion (or 2 percent) lower than those receipts in 2009. Withheld income and payroll taxes declined by about $13 billion (or 1 percent), and nonwithheld receipts fell by about $35 billion (or 10 percent). In both instances, the declines occurred early in the fiscal year and were largely attributable to lower collections of tax liabilities incurred in 2009. In the past five months, collections of withheld and nonwithheld taxes, which were based on income in 2010, were 4 percent higher than in the same period last year. The overall reduction in withheld and nonwithheld receipts was partially offset by a $7 billion increase in collections of unemployment insurance taxes, resulting primarily from the efforts of states to replenish their unemployment trust funds. Other tax receipts rose by $4 billion, on net, compared with such revenues last year.

 

Outlays ended the year about 2 percent below those in 2009, CBO estimates. That decline resulted primarily from a net reduction in outlays for three items related to the financial crisis: the costs of the TARP ($262 billion lower than in 2009), payments to Fannie Mae and Freddie Mac ($51 billion lower), and federal deposit insurance ($55 billion lower). Excluding those three programs, spending rose by about 9 percent in 2010,somewhat faster than in recent years.

 

Payments for unemployment benefits rose by 34 percent in 2010 because of high unemployment and increased benefits provided by various laws, including the American Recovery and Reinvestment Act (ARRA). Other ARRA provisions led to double-digit growth in spending for programs in the “Other Activities” category—particularly the State Fiscal Stabilization Fund, refundable tax credits, and certain education programs. Apart from deposit insurance, outlays for that broad category were 13 percent higher than in 2009.

 

In contrast, defense spending grew more slowly than in recent years, increasing by about 5 percent in 2010 after rising by an average of 8 percent annually from 2005 through 2009. Medicare and Social Security outlays rose by about 5 percent this year, somewhat less than in most recent years. The 9 percent increase in Medicaid outlays partly reflects a temporary increase in the federal share of Medicaid assistance authorized in ARRA; excluding ARRA-related expenditures, Medicaid outlays rose by about 6 percent.

[Guest HUMAN]

Here is A department to cut http://usvs.info/ .

 

Can some one tell me what the hell that web site is about? Because I am totally stumped.

 

<It makes no sense>

[Guest Shane]

Funny. The U.S. Vampire Service, looks to be a satire web site to promote a book by Othniel O'Connor. He theorizes that vampires like to eat steak rather than being staked.

[Guest human]

Okay!! thanks :) . It was on a government web site and it just threw me off. I just could not understand why it was on a government web site.

 

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Funny. The U.S. Vampire Service, looks to be a satire web site to promote a book by Othniel O'Connor. He theorizes that vampires like to eat steak rather than being staked.

[Guest Fedup]

I am sure their is alot of bullcrap programs that should be axed. Everyone agrees we should do something, but now I am hearing that nothing will be done until 2012. Let me state that again. NOTHING WILL BE DONE UNTIL 2012.

 

[Guest Tracy Thorleifson]

Check out usgovernmentspending.com. We are currently spending on welfare to the tune of about 3/4 of a trillion dollars per year. Coincidentally (or not), this is about the same amount that the Idiot-in-Chief expects to add in tax revenues by not extending the Bush tax cuts. Hmmm. I suspect that most of the folks on our welfare roles are actually able-bodied, able-minded human beings. Maybe, instead of raising taxes, it's time to stop conditioning these folks to sloth, indolence and ignorance, and let them shift for themselves...

[Guest human]

Sadly you could be right. If the democrats in the lame duck session pass a continuing budget resolution for 2011 and not leave it for the next congress then your argument will hold water.

 

The budget will be locked in place and that is that. If the democrats do it?

 

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I am sure their is alot of bullcrap programs that should be axed. Everyone agrees we should do something, but now I am hearing that nothing will be done until 2012. Let me state that again. NOTHING WILL BE DONE UNTIL 2012.