NEW YORK--The federal budget deficit is like the weather. Everybody talks about it; except for Bill Clinton, no one ever does anything about it.
President Barack Obama's bipartisan Fiscal Debt Commission released a draft report that starts out with a problem: even talking about reducing spending is insane when you're in the midst of a depression. Triumphant Republicans say they want to balance the budget. So does Obama. Are they serious? Of course not.
Theoretical budget-balancing exercises help enlighten us about where our tax dollars go. So let's start some slashing.
The 2010 federal budget shows $3.6 trillion in spending and $2.4 trillion in revenues. Net deficit: $1.2 trillion. It is nearly 13 percent of GDP, the highest since 1943. The goal is to close a $1.2-trillion budget gap. Can we find at least $1.2 trillion in budget cuts?
Any serious budget cutter has to start with defense: it accounts for 54 percent of discretionary federal spending. Of that 54 percent, 18 percent is debt service on old wars.
That leaves 36 percent, or $1.3 trillion, of which $200 billion a year goes to Afghanistan and Iraq. Let's pull out. We're losing anyway.
New deficit: $1 trillion.
In 2007 Chalmers Johnson wrote a book about the costs of American imperialism. "The worldwide total of U.S. military personnel in 2005, including those based domestically, was 1,840,062 supported by an additional 473,306 Defense Department civil service employees and 203,328 local hires," he wrote. "Its overseas bases, according to the Pentagon, contained 32,327 barracks, hangars, hospitals and other buildings, which it owns, and 16,527 more that it leased. The size of these holdings was recorded in the inventory as covering 687,347 acres overseas and 29,819,492 acres worldwide, making the Pentagon easily one of the world's largest landlords."
It's time to bring those 2.3 million men and women home. At an average of $140,000 per employee we could save $322 billion annually.
New deficit: $676 billion.
After defense, the other big costs are Social Security, Medicare and Medicaid. The obvious place to start is with wealthy recipients. Why should Bill Gates, worth $58 billion, get Social Security or Medicare benefits? Eliminating benefits for the approximately 1 percent of families older than 65 who earn more than $100,000 a year could save $150 billion.
New deficit: $526 billion.
Now let's talk about the other side of the equation: income. How can the U.S. government scare up some extra cash?
Allowing the Bush tax cuts for the richest 3 percent of Americans to expire on schedule would bring in $70 billion a year.
New deficit: $456 billion.
When it comes to revenues, you have to go where the money is: the wealthy.
Despite the economy, there are still 2 million households earning a whopping $250,000 or more per year. (Their average income is $435,000.) If we were to increase these super-rich Americans' income tax rate from 35 to 50 percent, we'd bring in an extra $131 billion. If we raised it back to 91 percent--the rate during the boom years between 1950 to 1963--the Treasury would collect $487 billion.
Budget surplus: $31 billion. And we haven't started on corporate taxes.