Congress needs to read “The Federal Spending Diet Book.”

The Federal Spending Diet Book

Reducing federal spending is about responsible governance, not Republican or Democrat power. There are relatively commonsense efforts to reduce the debt. Chapters 1 through 9 are the easy steps to reduce federal spending by a trillion dollars or more annually. Chapter 10 is for those serious dieters who want to “Make America Great Again.” It sets out a tax system that transforms a federal government from one of picking winners and losers to one that simply collects taxes to pay the necessary bills of the government.

If “[The] journey of a thousand miles begins with one step,” our federal government needs to start walking.

 Chapter 1: Do not fund laws that have not been authorized.

The easiest set of budget cuts would be to refrain from funding laws that Congress has not authorized. “In FY 2021 appropriations, the Congressional Budget Office identified 1,068 authorizations of appropriations, stemming from 274 laws, tolling $432 billion, that expired before the beginning of the fiscal year 2022.” Since House Rules prohibit such appropriations, it should be an easy savings of almost one-half trillion dollars.

Chapter 2: Review and vote on every expenditure of the Judgment Fund.

The Judgment Fund is the mother of all slush funds. It is a permanent, indefinite, and unlimited congressional appropriation continuously available to pay money judgments entered against the United States and settlements of cases in or likely to be in litigation with the United States. It is an indefinite appropriation, so secret that Congress no longer even debates what the amounts are for. The amounts are appropriated, no matter what the amount. The Department of the Treasury just pays the claims upon the receipt of the paperwork. This is the fund that President Obama used to deliver $1.7 billion in cash to Iran as a bribe to sign the Iran nuclear deal. Why should our government officials have billions in a secret fund to cover up illegal activity? Having Congress approve each judgment and settlement as it did before 1956, the U.S. could save taxpayers tens of billions of dollars.

Chapter 3:  Follow and implement GAO’s Generally Accepted Accounting Principles (“GAAP”).

Congress mandates GAO to perform a GAAP analysis of federal spending and assets and provide recommendations to ensure the financial reporting by an agency is transparent and consistent. Every member of Congress should read these reports on how our money is managed and should implement its findings.  One specific GAO recommendation is for the federal government to address the government-wide improper payments, estimated to be $175 billion.

Chapter 4: Government must operate only for a public purpose.

The issue of Congress giving away our money to private entities has been debated since the founding of the Republic. Opponents of giveaways argue taxpayer money can only be spent on matters enumerated in the Constitution. The government asserts it can spend taxpayer money on anything that promotes the general welfare. Continuing this debate is irrelevant since the courts have made it clear legislatures determine what the general welfare is. To address the excesses of gifts to private individuals, Congress should stop giving money to private parties, including tax credits for fancy automobiles, horse racing, NASCAR, and short-line railroads, and finally eliminate carried interest.

Chapter 5: Members of Congress and the President should imagine their conference tables are merely kitchen tables that invite a family discussion over finances.

The amount of information available to Congress for making smart debt reduction decisions is overwhelming. It is time Congress puts these materials to use. A simple way to approach this task would be for each congressional committee to rank each program within its jurisdiction in order of priority.  The budget and appropriation committees would work with the authorizing committees to ensure the highest-priority programs receive priority funding. The appropriation committees would work down the list until the revenue raised by taxes is expended. At that point, Congress would have to cease spending money on programs for which there is no longer any revenue, e.g., studies of shrimp on a treadmill, or admit to the taxpayers it wants to borrow money to fund programs of lesser value. This kitchen-table process of spending only up to revenues received could save hundreds of billions of wasted dollars.

Chapter 6: Re-constitute the Joint Committee on Reduction of Non-Essential Federal Expenditures, which existed from 1941 to 1974.

This committee was established after World War II to recommend ways to reduce a massive federal budget.  Its goal was to identify non-essential spending. While the committee was only a study committee, requiring its recommendations to be submitted to authorizing and appropriation committees, it had a major impact on budgeting in government. With the inability of Congress to control spending or the states to force a Balanced Budget amendment to the Constitution, an alternative would be to create a similar committee to make recommendations to Congress but require its recommendations be voted on by Congress. This process creates accountability.

Chapter 7: Enact a Base Realignment and Closure Commission (“BRAC”) that applies to general appropriations.

Due to political pressure to locate the military bases in numerous congressional districts, the U.S. constructed an excess of bases but could not close unneeded ones. To address the situation, Congress established BRAC, giving the Commission power to identify unnecessary bases and to send recommendations to Congress. The key to BRAC’s recommendations to Congress is that they became law unless Congress passed a Resolution of Disapproval and the President signed it. Using the BRAC structure, Congress could apply the same concept to all recommended reductions as a means of reducing political support for unneeded programs.

Chapter 8: Establish a Budget & Waste Reduction Director in every agency to identify unnecessary expenditures.

Federal agencies have recycling and permit streamlining directors to help implement certain laws. Due to massive budget deficits, there should be a similar position to identify ways an agency can eliminate unneeded programs. The person should report directly to the head of the agency. All reports must be addressed by the head of the agency, and reasons for “No Action” must be publicly justified. Each director would recommend a 10% reduction in agency expenditures. Give the director a big bonus for meeting the target.

Chapter 9. The federal government needs to seriously re-think the massive subsidies it gives to private parties to buy green products.

In the recently enacted “Inflation Reduction Act,” Congress authorized $370 billion in new tax credits for corporations and individuals if they purchase green energy products or build green energy facilities. The tax credits are to boost sales of electric vehicles, the installation of rooftop solar panels, the development of solar power systems, heat pumps, water heaters, space heating, electric stoves, circuit breaker boxes, additional home insulation, and exterior windows, to name a few private beneficiaries. This is in addition to federal regulations imposing energy efficiency requirements on at least sixty products and $577 billion in tax credits and grants for green energy projects since 2004.

The IRA was passed only a week after Congress authorized $280 billion to incentivize the semiconductor industry to build plants in the U.S. The semiconductor industry is a very profitable $573 billion industry that is expected to grow to $1.4 trillion by 2029 due to high demand for its products.

Chapter 10: Enact a fair, simple tax code that raises money to operate the government rather than legislating personal behavior.

For those in Congress and presidents serious about the future of the United States, its time for Congress to stop using the tax code to pick winners and losers and to let the market allocate the goods and services wanted by consumers.

This simple solution is to repeal the 8-million-word tax code and replace it with the 1913- four-page Form 1040. Few deductions and low rates, but requiring everyone to pay some tax, including the wealthiest. Another benefit of this simple approach is it captures a greater amount of tax owed by closing the Tax Gap.  The IRS defines the tax gap as the difference between true taxes owed for a given tax year and the amount that is paid. The gap is caused by the under-reporting of income, non-filing, and tax evasion. While the exact amount is unknown, the IRS estimates it to range from $574 to $700 billion annually. A complex tax code invites under-reporting and manipulation, whereas a simple tax code fosters greater participation and prevents large-scale manipulation encouraged by complexity.

Starting a diet requires acknowledgment of being overweight and the desire to lose weight. The same is true with overspending. It cannot continue for the health of the nation. If overspending continues, the long-term consequences will be extremely harmful to the nation, especially future generations. While not every step in the diet book needs to be followed, if, however, the federal government implements four or five of the steps, it is guaranteed to reduce spending by a trillion dollars.

The post Shrink Your Bloated Government With This One Easy Trick appeared first on The Libertarian Republic.

Congress pontificates about reducing its massive national debt of $30 trillion, but each year it gets bigger. Diet books don’t help one lose weight. Only by reducing food intake can weight be lost. The same is true for budgets. Bloviating about the national debt on cable TV will not reduce the debt. Only by cutting programs and reducing laws can Congress reduce the national debt.

In 2021, our federal government spent $6.82 trillion in a $22.4 trillion economy. Simply, 30% of all economic activity in the U.S. is federal spending.  Another $3.3 trillion was spent by state and local governments. Forty-five percent of our entire economy is government spending. The Government Accountability Office (“GAO”) informed Congress that the growth of the national debt is unsustainable and a risk to our future. It’s now time to stop spending and start reducing the nation’s debt to ensure a sustainable nation for our children.

A diet that takes trillions off the federal spending scale without disrupting a lifestyle.

The nation’s goal should be to reduce the national debt with as little disruption as possible. Starvation diets don’t work. The nation just needs to cut out the junk food but keep a good helping of vegetables on our plate. This is doable by recognizing we don’t need to eat every time we see food. Likewise, Congress does not need to spend money every time it sees a perceived “problem.”

Once in this mindset, Congress needs to identify what the American people do not need. Five categories of spending literally jump off the plate.

1. Do not fund laws that have not been authorized. The easiest set of budget cuts would be to refrain from funding laws that Congress has not authorized. “In FY 2021 appropriations, the Congressional Budget Office identified 1,068 authorizations of appropriations, stemming from 274 laws, tolling $432 billion, that expired before the beginning of the fiscal year 2022.” Since House Rules prohibit appropriations to fund laws not authorized by Congress, just letting those unauthorized laws expire is an easy savings of almost one-half trillion dollars. If Congress is so unwilling to perform oversight on expired laws or the public has so little interest in a law being reauthorized, Congress should follow House rules and not fund the expired laws.
2. Review and vote on every expenditure in the Judgment Fund. The Judgment Fund is the mother of all slush funds. It is a permanent, indefinite, and unlimited congressional appropriation continuously available to pay money judgments entered against the United States and settlements of cases in or likely to be in litigation with the United States. It is so secret that Congress no longer even debates what the amounts are for as an indefinite appropriation. The amounts are appropriated, no matter what the amount. The Department of the Treasury just pays the claims upon the receipt of completed forms.This is the fund that President Obama used to deliver $1.7 billion in cash to Iran as a bribe to sign the Iran nuclear deal. Why should our government officials have billions in a secret fund to cover up illegal activity or to held terrorists? Having Congress approve each judgment and settlement as it did before 1956, the U.S. could save taxpayers tens of billions of dollars by rejecting settlements the executive branch makes with its friends that bring suit against the government knowing of a friendly settlement or with terrorists.
3. Enact a fair, simple, tax code that focuses on raising money not legislating behavior. Another easy way to reduce the deficit is to get rid of the 8-million-word tax code and replace it with the 1913- four-page Form 1040. Few deductions and low rates, but everyone pays something, including the wealthiest. The benefit of this simple approach is it captures a greater amount of tax owed by closing the “tax gap.”  The IRS defines the tax gap as the difference between true taxes owed for a given tax year and the amount that is paid. The gap is caused by the under-reporting of income, non-filing, and tax evasion. While the exact amount is unknown, the IRS estimates it to range from $574 to $700 billion, annually. A complex tax code invites under-reporting and manipulation, whereas failing to pay taxes in a simple system, could easily place one in a position of defending a fraud or tax evasion charge.
4. Follow and implement GAO’s Generally Accepted Accounting Principles (“GAAP”). Congress mandates GAO to perform a GAAP analysis of federal spending and assets and provide recommendations to ensure the financial reporting by the agency is transparent and consistent. Every member of Congress should read these reports on how our money is managed and should implement its findings when mismanagement is identified. One specific GAO recommendation is for the federal government to address the government-wide improper payments, estimated to be $175 billion.
5. Congress should make a kitchen-table list of what programs are most important to our Republic. The amount of information available to Congress for making smart debt reduction decisions is overwhelming. It is time Congress puts these materials to use. A simple way to approach this task would be for each congressional committee to rank sequentially, each program within its jurisdiction, with the most important programs having the lowest number. The budget committee would still allocate a budget for appropriations and the highest-priority programs will be funded first. The appropriation committees would work down the list until the revenues raised by taxes are expended.At that point, Congress would have to cease spending money on programs for which there is no longer any money, e.g., studies of shrimp on a treadmill, or admit to the taxpayers, it wants to borrow money to fund programs of little value. This kitchen-table process of spending only up to revenues received could save another $1plus-trillion annually, even if Congress expended a few hundred billion on some lower value programs.

These five modest proposals for reducing the national debt do not disturb any of the programs Congress views as a “must fund.” The reductions all come in areas where Congress has little interest, settlement of lawsuits that should not be settled, making sure everyone pays their fair share on income tax, requiring agencies to only pay authorized recipients, and not spending money on stupid programs.

Is anyone in Congress willing to put the national debt on a diet?

The post Reducing National Debt by Trillions with a 5-Step Diet appeared first on The Libertarian Republic.

[dropcap size=small]T[/dropcap]he fourth GOP Debate was a turning point in the presidential contest. Lindsey Graham was removed from all debates, Chris Christie and Mike Huckabee were demoted to the undercard debate, and there was more time to go around for all candidates on the main stage. Thus, as time marches on, the candidates have more time to show their true colors on the issues. This also means less of a spotlight was put on candidates like Donald Trump and Ben Carson, who monopolized the previous three debates. Other candidates, most notably Rand Paul, were allowed to voice their opinion on issues previously unknown to voters. We got to see a side of those candidates we hadn’t seen before.

[divider]The Economy[/divider]

Discussion started with the minimum wage. Being Republicans, there was a general consensus that the minimum wage kills jobs. While this is true, it didn’t make for much of an interesting discussion. The debate didn’t start out as much of a debate.

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A notable element in this debate was a desire of the candidates to attack Democrats more so than their Republican competitors. For example, in nearly every answer she gave, Carly Fiorina (as well as Christie) did not hold back on attacking Hillary Clinton. The reasons for this sudden aggressiveness towards the Democrats, away from their fellow Republicans, was likely caused by approaching primaries and the desire to not anger a potential nominee. Fiorina, for example, knows she is unlikely to get the nomination at this point, so she wants to seem like a good choice for a running mate for someone who does. If you can’t beat ’em, join ’em, as it were.

A number of libertarian-leaning candidates spent the early debate waiting for Rand Paul to chime in. After all, the previous debates barely allocated him time. When given the question of income inequality, Paul pointed out that most income inequality in America occurs under Democrats and that the Federal Reserve has a large role to play in poverty.

It’s up for some debate if Democrats are mostly responsible for income inequality. Many Democratic cities are indeed unequal while many Republican cities are more equal in income, however this could be for a variety of reasons such as geography, logistics, and population size. Yet, as Brian Darling told Politifact a year ago, Paul’s statements on Democratic cities being unequal is more a reference to how Democrats fail to solve the problem rather than how they may be responsible for it.

Regardless, Senator Paul was the first candidate to mention how the Federal Reserve’s meddling in the economy is a major contributor in income inequality. That is something all libertarians can agree on.

Here’s Paul’s complete answer:

[divider]Immigration Reform[/divider]

Immigration has been called “the subject which will define the 2016 election.” Comments by Donald Trump have propelled the issue into the mainstream, with people from all ends of the political spectrum chiming in on the controversial issue. However, tonight immigration seemed less of an issue than it was in the early days of the election. Donald Trump’s controversial statements no longer dominated the discussion as they once had. In fact, compared to previous debates, Trump’s voice wasn’t as loud or bombastic this time around.

Trump not only failed to captivate the audience as he previously did, he spent more time on the defensive. More and more voters seemed turned off by the idea of deporting millions of people; those challenging Trump’s positions were seen more favorably than ever before. Trump’s nationalism has proven to be an alienating factor in his campaign, but it should be noted that it mirrors that of Bernie Sanders to a surprising degree.

Not only would Trump’s proposed deportation be unpopular, but it would be expensive. According to an NBC report with US Immigration and Customs Enforcement Deputy Kumar Kibbel, Trump’s plan would cost $12,000+ a person, a total of approximately $137 billion dollars in total. How “conservative” of Trump.

The two most ironic things about the nationalistic sentiment Trump holds are that it not only requires more regulation on whom businesses can hire based on nationality, and it ignores the country’s history of being accepting of immigrants.

[divider]Taxes[/divider]

Taxes were a trending topic on social media and of great concern to many voters. Plans ranged from abolishing the IRS to a “fair” or a “flat tax.” Candidates shared a variety of opinions, while few realized that the income tax was an unconstitutional measure designed to raise revenue for World War I.

For a constitutional expert like Ted Cruz, it’s hard to see how he doesn’t realize that the income tax is unconstitutional and that even his proposed 10% income tax (welcome as it may be) is 10% of your income still stolen. Cruz also fails to mention how he would simultaneously abolish the IRS while having an income tax. Where would you file your taxes to? Cruz says on his website that we will need dramatically less accountants, agents, and facilities to process the tax forms, but surely we will need some. The only answer is that the IRS will be “replaced.” With what? Why would this new entity be any less wasteful than the previous government bureaucracy?

Even more ominous is Marco Rubio’s “pro-family” tax plan. The plan seems attractive at first, mostly because of the name. It allows families with children tax incentives so they don’t have to work longer hours. However, Rubio’s plan does not account for abuse of this system. If someone realizes they can write off their taxes for having another kid, what’s to stop them? Rand Paul rightly pointed out that this– coupled with Rubio’s proposed 10 trillion dollars in military spending– is not fiscally conservative.

[divider]Foreign Policy[/divider]

The issue of foreign policy is one that separates conservatives from libertarians the most. The hawkish approach to dealing with foreign affairs turns off many voters, particularly the young. It is also an issue that has defined candidates as well as set them apart from the crowd. For example, the Iraq war and military interventionism continue to define Jeb Bush, pinning an embarrassing legacy to him that won’t dissipate. Bush is torn between admitting that his brother was wrong and shaming his family, and defending his brother’s legacy and proving to voters that another Bush wouldn’t hurt. This provided plenty of ammunition for Trump to use against Bush during the debate. Bush once again, no doubt at the orders of his neocon donors, asserted that “American leadership” is crucial. Trump’s response was somewhat libertarian, saying that the US shouldn’t even act as the world’s policeman, and that the US shouldn’t bear sole responsibility for safeguarding the world. However, Rand Paul’s inner libertarian kicked in once more, and suggested we stop funding our enemies, proving he was the true libertarian opinion that night.

Many young libertarians no doubt were disappointed with the warmongering of Ted Cruz. He had ascended to the near-top of some polls and is a favorite among Tea Partiers. However, when it came to foreign policy, Cruz’s opinion was more of the same ol’ same ol’. He offered no new approaches to dealing with terror other than attempting to destroy it. Carson too suggested we should attempt to make the caliphate “look like losers” by destroying their base of operations. However, only Rand Paul seemed to realize that the best way to win the game is to not play it.

Rand Paul’s non-interventionist foreign policy was dubbed “isolationist” by neoconservative favorite Marco Rubio, just as his father’s was in the last election. What Rubio fails to realize is that hawkishness and war is more isolating than non-interventionism. A peaceful country is one that welcomes trade from other nations and is respected and sought after as a place of innovation and business development. Paul understands this, and it will be interesting to see over the course of the election how Republicans react to the sole voice of foreign policy reason.

[divider]Banking and the Fed[/divider]

Most libertarians can tell you the best thing to do with the Fed is to end it, as a  central bank is not at all conducive to the free market. In fact, a central bank was advocated for in Karl Marx’s Communist Manifesto. Sadly, most Republicans did not take a very strong stance on the Federal Reserve. Paul and Cruz were the most vocal.

While Jeb Bush couldn’t even answer if he would bail out the banks again, Ted Cruz could. Cruz called for the an audit of the Federal Reserve and condemned the bailouts of Wall Street that were unfair to the American taxpayer and small businesses. Interestingly enough, Ted Cruz benefited from the bailouts personally. His wife was a Vice President of Goldman Sachs in Texas, a company that received $2.9 billion from the $182 Billion dollars used to bailout AIG, according to an FCIC report obtained by HuffPo. It’s doubtful Cruz condemned the bailouts at that point.

Only Rand Paul could honestly say he’s got the interests of auditing the Fed at heart. He has not received any bailout money as Cruz has, and he continues to carry his father’s legacy to audit the Fed and remove it’s influence in our economy.

[divider]The Trans-Pacific Partnership[/divider]

One of the most mysterious trade agreements of all time was revealed in it’s 6,000 page entirety recently. The TTP contains provisions about anything from tariffs to intellectual property rights. It would take far too much time and study to closely examine the thousands of provisions the agreement contains in order to form a fair opinion on it to broadcast to the voters, and the candidates can only honestly say we should have read into it more before endorsing it. This was not the case for Donald Trump.

Trump’s big mouth ate his foot when he complained the TPP unfairly benefited China. Trump railed against Chinese economic aggression and the unjust implications of the trade agreement. He, and several other candidates at various points in the debate, inaccurately attributed the Chinese manufacturing sector to the woes of American joblessness. Trump and the other candidates did not take into account changing job requirements in the US, not China, are moving jobs to higher skill levels, thereby “stealing” manufacturing jobs. However, the most embarrassing moment for Trump in the entire debate was when Rand Paul corrected Trump on China’s role in the TPP; it doesn’t actually have one. In fact, Paul was right to point out that China stands to gain competition from other countries thanks to the deal. Here’s the exchange:

[divider]In Conclusion[/divider]

This debate was an interesting spectacle because it wasn’t dominated by Carson and Trump as the previous debates had been, most likely because less candidates allowed more people to get more time. No longer could the media just pamper a certain candidates with coverage without it seeming overtly lopsided. Additionally, we saw a resurgence of Rand Paul’s inner libertarianism that will hopefully attract more voters to the liberty movement. Overall, it’s reasonable to assume this debate was a turning point in the election, and now the former front runners are being challenged for their positions by those who,m may have seemed nonthreatening months ago.

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