Treece: Eliminating the 2013 deficit, Part 2Written by Ben Treece | | email@example.com
Last week I wrote a piece titled “Eliminating the 2013 Deficit Without Raising Taxes,” and per the request of a few readers the sources used in my research are cited in the comment feed on that article. My goal was simple; eliminate the proposed 2013 deficit of $901 billion without raising taxes, cutting Medicare, Medicaid or Social Security. This week, I wanted to follow up with why each cut was made and any impact they may have (not all cuts made are detailed in this piece due to length restrictions).
The cuts made to congressional salaries were not a substantial cut (savings of $67.9 million), but merely a cut due to principle. A congressman/woman in no way deserves to take triple the U.S. median household income out of the tax pool for merely representing the citizens. Serving as a U.S. elected official should be an honor, not a career.
I cut the broadly labeled “defense budget” by 25 percent, which resulted in savings of $223.75 billion, and also found $11 billion in wasteful spending in Iraq between 2007 to present. By decreasing the military budget, we will have less money to operate overseas bases (some of which will need to be shut down) and less money available for research and development. Specifically what within the military would I cut? It is difficult to say; it is definitely something that I would want input from service members about. However, as I mentioned before, if any military personnel were to see pay cuts as a result of these budget constraints, I would immediately see to it that their pay was not affected. I stand by what I said in the last article; a federal government should promote interstate commerce and provide a sound national defense above all else.
I cut unemployment insurance as an incentive for individuals to get back to work. Several areas of the economy are very understaffed at the moment, but the problem is that they are not able to hire competent employees or employees able to pass drug tests (this is what we have had several employers tell us regarding their personal employment situations). I would be more inclined to reduce the cuts to unemployment if instead of giving recipients cash they were given vouchers to attend a trade school to learn a skill during their 99 weeks of unemployment. Then, upon completion, the unemployed would ideally have obtained a highly lucrative skill as opposed to sitting around waiting and drying up the tax pool.
Numerous programs that I chose to cut either receive alternative funding, have failed to meet their objectives or simply do not require as large a budget as they once had. Pardon my shorthand, but they are as follows;
- NASA, cut by nearly 90 percent to $2 billion: The U.S. is no longer sending shuttles to space, thus a large budget is not necessary anymore
- Treasury Department, cut by 85 percent to $2 billion: This cut would hopefully resolve in the IRS restructuring and the U.S. pursuing a more efficient and coherent tax code.
- Department of Transportation, cut by half to $34 billion: As I mentioned, the federal government should promote interstate commerce, but sacrifices must be made, and while their cut is severe it is not threatening to their overall objective to keep our infrastructure safe (anybody remember “Shovel Ready Jobs?”)
- Health and Human Services, cut 98 percent to $1.4 billion: funds will pursue heavily debated Affordable Care Act initiatives and grants associated with public health issues. In times of a mounting deficit, we as a nation need to rely on states to fund and pursue these initiatives, not the federal government.
- The State Department, cut 99 percent to $600 million: a large portion of these funds go toward providing international aid. When we have individuals struggling in our own country we cannot continue to finance aid for foreign nations. We should call upon citizens to seek out charities and donate as opposed to sending tax dollars overseas.
The remaining list includes agencies and organizations that would be defunded altogether due to their incompetence or that they already receive alternative funding. These include Housing and Urban Development, which receives additional funding through HUD fees on home sales; the Department of Education, which funds schools with local levies or chooses to promote a pro-charter school agenda; the Department of Energy (states and the private sector can — and should — fund clean energy research); Overseas Contingency Operations, since we cannot logically fund our allies when we cannot fund our own government; and the Department of Labor, which is clearly an ineffective organization seeing as how we have seen little to no unemployment recovery.
There were cuts that were very difficult to make, and there were cuts that that should have been made a long time ago. The fact of the matter is that when attempting to balance a budget deficit EVERYONE must make sacrifices and learn to operate with limited resources and finances. It is a task that must be completed to ensure the financial viability of our nation, but not one that will come without scrutiny and opposition. Nobody wants to see their funding disappear, but when push comes to shove this proposed budget cuts funding all across the board all without altering taxes or touching The Big 3, Social Security Medicare and Medicaid. It is time for this country to balance the budget, for the first time since President Clinton, and get this country back on track as the world’s economic superpower.
Ben Treece is a 2009 graduate from the University of Miami (Fla.) with a bachelor of business administration degree in international finance and marketing. He is a partner with Treece Investment Advisory Corp (www.TreeceInvestments.com) and a stockbroker licensed with FINRA, working for Treece Financial Services Corp. The above information is the express opinion of Ben Treece and should not be construed as investment advice or used without outside verification.