Budget Op-Ed: Addressing the Budget
It's easy to agree that we should cut government spending. It's harder to agree on what government spending we should cut.
We can't just say, "Let's cut $500 billion" or make vague promises about "increasing efficiency." Cutting spending means picking some stuff we currently spend money on, and deciding to stop spending money on it. That means real sacrifices.
And I think that any serious budget proposal should be clear about exactly what we'd be cutting, saving, and sacrificing.
For example, the President's recent budget proposal would freeze domestic spending across the board for the next five years.
To be sure, that would create a lot of savings-around $400 billion over the next decade.
But it would also mean a lot of sacrifice for Minnesota: billions in funding for things middle class families rely on, like heating assistance, Pell Grants, and infrastructure funding that creates jobs.
Some might argue that it's worth sacrificing even those important programs to fix the deficit. But I think we can do better than attacking initiatives that create jobs or help Minnesota families.
Here are three ideas I'd offer instead.
CUT: The government pays boutique prices for Medicare prescription drugs-but it should be paying Costco prices. Because Medicare represents so many people, it could negotiate prices directly with drug companies and deliver the same benefits for seniors at a lower cost. That's how the Department of Veterans Affairs does it-and for the ten most prescribed drugs, the VA pays about half as much. The rule preventing Medicare from negotiating only benefits the drug companies. Let's get rid of it.
SAVINGS: Up to $240 billion over ten years.
SACRIFICE: Drug companies would receive lower payments, but seniors would get the same benefits.
CUT: We all agree that we can't skimp on national security. But when the military says it doesn't need or want something, we should listen. Secretary Gates has identified specific items that either don't work or we don't need more of, like the F-22, the C-17, and the F-35 alternate engine. Let's not buy them.
SAVINGS: $300 billion for proposed cuts.
SACRIFICE: Well-connected military contractors would suffer, but our generals say we can drop these programs without sacrificing security.
CUT: The oil industry already enjoys enormous profits-but also gets huge subsidies and tax breaks. And some of these giveaways don't even help domestic oil production, including provisions related to expensing drilling costs, certain income deductions, the foreign tax credit, and credits for production of nonconventional fuels. Let's stop them.
SAVINGS: About $64 billion over ten years.
SACRIFICE: Oil company profits would be lower, but the Treasury Department estimated that repealing subsidies like these would reduce domestic oil production by less than 0.5 percent.
I think these savings are worth the sacrifice. Some might disagree. And either way, we'll need to find more cuts. I'd love to hear more ideas, and I'll consider them carefully.
In fact, the upcoming budget process, kicked off by the President's proposal, should be an opportunity for all of us to consider and debate ideas for cutting spending, weighing the savings against the sacrifices.
But if we're serious about cutting spending, we have to be specific about what we're proposing to cut, and honest about what sacrifices we're ready to make. Tired talking points and vague promises will get us nowhere.
Our long-term budget deficit threatens our ability to create jobs, our place in the global economy, and our fiscal future. Let's have a debate worthy of this enormous challenge.