The affirmation from the Super Committee today that they will not be producing a debt proposal comes as no surprise after repeated reports that Democrats refused to agree to a deal that did not include massive tax hikes. In September, ATR offered the below suggestions to find $1.5 trillion in savings—simple solutions that would have gone beyond the $1.2 trillion debated by the committee. Democrats instead torpedoed the opportunity to enact such commonsense reforms, arguing tax hikes can fix what it is a fundamental spending problem.
First, the Committee should enact a hard, nominal discretionary spending freeze at the FY2012 levels. Savings: $971 billion.
Secondly, the following reforms offer multiple ways for the committee to find its way to $1.5 trillion in savings (calculated over ten years, unless otherwise noted):
- Revive federalism – Give states control over their Medicaid programs, remaining federal welfare programs and transportation spending.
Devolving transportation to the states:
Savings: $540 billion
Block-granting Medicaid:
Savings: $750 billion
- Decrease the regulatory burden – Regulatory budgets have grown by 72.5 percent over the past decade, which is much faster than the reported costs of regulations in the same time period. Simply freezing spending on regulatory agencies’ at its ten-year average would create real savings while stemming aggressive regulatory overreach.
Savings: $298 billion
- Eliminate costly federal labor mandates – federal labor laws inflate the cost of construction projects with arbitrary wage mandates and uncompetitive union requirements.
Repealing the Davis-Bacon Act:
Savings: $108 billion
Repealing Project Labor Agreements:
Savings: $24 billion
- Spending Reform
Stop appropriating for unauthorized programs
Power-hungry appropriators annually fund programs and agencies whose authorizations have expired.
First year savings: $290 billion (2010 CBO estimate, does not include “indefinite” appropriations)
Prohibit authorizing and appropriating in the same bill
Obamacare is a prime with examples: PPACA both authorized and appropriated the Prevention and Public Health Fund, setting up an automatic funding track in perpetuity.
Savings from deauthorizing advance appropriations: 17.75 billion. (One of 38 “indefinite” appropriations in Obamacare)
End abuse of emergency spending loopholes
What few budget constraints that exist are flouted by the use of “emergency” designations, paving the way for explosive war spending, unemployment compensation extensions and President Obama’s “stimulus” plan.
Requiring offsets for non-defense emergency spending (includes only emergency spending in supplementals): $360 billion. Offsetting the “emergency” war funding: $493 billion. Total “emergency” savings would be $853 billion
Total savings from spending reform: at least $1.2 trillion