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Dear Mr. President, Since You Asked...


Editorials

DEAR MR. PRESIDENT, SINCE YOU ASKED...

Your economic address played beyond your wildest dreams in its first week. But the raves are already being tempered, as they should be. The reason? your economic program loaded up on new taxes and went lightly on cutting government spending. It didn't even come close to meeting Budget Director Leon E. Panetta's original goal of cutting $2 in spending for every $1 in tax hikes. Moderate Democrats and Republicans--and just about everybody made suspicious by years of undisciplined congressional spending--are concerned, even while commending your attack on the $300 billion annual federal deficit.

You did show great courage in putting forth proposals that would curb the growth in medicare and medicaid spending. You did suggest deeper cutbacks on defense and even said that taxes on Social Security should go up for upper-in-come folks. So you chopped into the three categories that, together with interest on the debt, add up to two-thirds of the budget. Then you went further, nicking a budget item here, cutting another there. you even stood tall against the beekeepers, eliminating the government subsidy for honey.

All of this was splended work. But it's not nearly enough. Your spinmeisters have been busy explaining all the political compromises you had to accept so that Congress wouldn't kill your plan altogether. They suggested you couldn't go very far in curbing spending on the pet projects of powerful barons of immportant congressional committees--nearly all of them your fellow Democrats, by the way. Congress is a major problem, we agree, precisely because it is so beholden to special interests and so dependent on private money to finance reelection campaigns. Fair enough. But you also asked everyone to suggest further spending cuts. Your political adviser Paul Begala said tauntinlgy: "Put up or shut up,"

We're putting up. Here a program of spending cuts that over five years will save an additional $75.5 billion and give you an extra $55.2 billion in revenues if tax subsidies are ended. They won't put the government on a starvation diet; in fact, they are just as reasonable as the cuts you propose. In may cases, we're asking you simply to go one step further in cutting programs you've already hit, such as the pork-ridden highway demonstation projects. In others, we're asking you to be as brave against the goaterers as you were against the beekeepers. No one can figure out why the nation needs a Helium Reserve, so that's one we think ought to go. Reorganizating the Veterans Affairs hospital would do a service to all our veterans as well as save money. Dumping the $25,000 passive real estate losss exemption, instead of expanding it, could generate $30 billion over five years, more than enough to replace the increase in the antigrowth corporation income tax. None of these suggestions is especially tough politically, except perhaps the tax bit on home mortgages over $300,000. But how many middle-class people can afford to have those mortgages? All we ask is that these extra savings be used in lieu of raising income-tax rates on people and companies. So here we go:

ADDITIONAL SPENDING CUTS

1994-98

Billions of dollars

End federal subsidies to airports.................$6.7

Charge user fees for air-traffic control...........6.8

End highway demonstration projects (lots of pork)..4.3

Eliminate EPA wastewater-treatment grants

(more pork)....................................6.3

End below-market use of federal lands..............1.9

Stop filling the Strategic Petroleum Reserve.......1.0

Sell the Helium Reserve (what's it for, anyway?)...1.0

Dump the Supercollider (Really a jobs

program for Texas)..............................3.2

Stop the space station (it's of litle use

commercially)..................................10.4

Squeeze more out of farm supports.................11.2

End subsidies for wool and mohair..................0.7

Reform verterans' disability benefits.............10.7

Reorganize the VA hospitals........................3.4

Take an additional 100,000 out of the 2.9 million

federal work force..............................7.9

$75.5

NEW SAVINGS FROM CURBING TAX SUBSIDIES

Revenue generated

Don't expand the $25,000 passive real estate loss exemption-dump it...$30.0

End the interest deducation on that part of home mortgages over

$300,000 (after Social Security, the home mortgages is America's

most popular entitlement............................................12.5

Tax 10% of employer-paid health benefits over $400-a-month per family..11.5

Eliminate child-care credits for high-income individuals................1.2

$55.2

Total savings $130.7 billion


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