The NY Times has a really cool interactive puzzle this morning – the Budget Puzzle. Basically, it gives you a bunch of options and let’s you attempt to balance the U.S. Budget. If you didn’t know, the guvmit is broke. And that’s an understatement when you’re talking about a trillion dollars.
So anyways…I just balanced the budget. Here’s a link to my version.
Here’s all it took: (dollar figures represent short-term and long-term savings)
- Eliminate earmarks – $14B / $14B
- Eliminate farm subsidies – $14B / $14B
- Cut pay of civilian federal workers by 5 percent – $14B / $17B
- Reduce nuclear arsenal and space spending – $19B / $38B
- Cancel or delay some weapons programs – $19B / $18B
- Reduce the number of troops in Iraq and Afghanistan to 60,000 by 2015 – $51B / $149B
- Enact medical malpractice reform – $8B / $13B
- Reduce the tax break for employer-provided health insurance – $41B / $157B
- Cap Medicare growth starting in 2013 – $29B / $562B
- Pres. Obama’s proposal on investment tax – $10B / $24B
- Allow expiration for income above $250,000 a year – $54B / $115B
- Payroll tax: Subject some incomes above $106,000 to tax – $50B / $100B
- Taxes: Eliminate loopholes, reduce rates (Bowles-Simpson plan) – $75B / $175B
- Taxes: Reduce mortgage-interest deduction by converting to credit – $25B / $54B
So there you go…fourteen cuts, modifications and tax increases (gasp!) that will balance the budget.
Let’s look at a couple of the biggies.
First, #8 – slowing the growth of Medicare. It’s going to be nearly impossible to balance the budget if Medicare spending continues on its current course. Frankly, this just has to be done.
#12 – Eliminate tax loopholes and adjust tax rates. If you have seen the Bowles-Simpson plan that came out last week, definitely Google it. They proposed many changes, but the most noteworthy was dramatic changes to the personal and corporate tax rates that would increase revenues while lowering overall rates. Basically, your tax rate would be lowered but you might not get to deduct charitable contributions, or local taxes, etc. I like this also because it broadens the tax base (you know only about half of us pay any taxes currently??).
#7 – Reduce the tax break for employer-provided insurance. Once again, this speaks to the growth of medical expenses. If we limit the growth rate of health insurance expenditures, employers will be more likely to shop and search for a great deal on insurance, or offer more choices to their employees. Or, given the health exchanges will be live in 2014, maybe they won’t offer medical at all and each employee can simply buy a plan from the exchange.
OK, so I went out on a limb…now I’ll admit, I didn’t study these for hours and hours. I reserve the right to change my mind. But it sounds good right now. What do you think? Agree or disagree? Leave a comment below.