Congressman Jason Chaffetz (UT-03) has proposed a Congressional Action Plan (CAP) called the Contract for the American Dream which he is inviting members of Congress and candidates for Congress to sign. While I agree with his CAP generally I thought I would take the time to break out the four sections of the plan and evaluating what I agree or disagree with more specifically. This post focuses on Fiscal Discipline. Later posts will focus on Limited Government, Accountability, and Strong National Defense.
Congressman Chaffetz describes our current fiscal discipline situation as:
Our national debt exceeds $12 trillion, with our annual deficit in excess of $1.4 trillion. Federal spending as a percentage of our Gross Domestic Product (GDP) is roughly 25%, when historically it has been roughly 19-20%. We pay approximately $600 million per day in interest payments. In short, the current government spends too much, taxes too much, and borrows too much of the people's money. It is unacceptable and unsustainable. No longer can we run this government on a credit card. We are not going to borrow and spend our way out of these challenges.
He suggests a goal to work for as:
Imagine a federal government that treats the national treasure with respect and responsibility by living within its means-where every American pays a fair share.
Here are the steps he proposes to achieve that goal:
- Reduce total federal payroll and workforce by 10%, except for military. This action will force all federal departments to identify and eliminate waste.
- Support a balanced budget amendment.
- Require 2/3 majority vote for any tax increase.
- Cut non-defense discretionary spending by inflation minus 3% across the board.
- Impose a moratorium on all appropriations earmarks until the process is reformed legislatively. Work to maximize openness and transparency with filters, to ensure only expenditures with a federal nexus, and prohibit allocations to for-profit companies.
- Reduce the capital gains rate to 10%. This will lead to increased receipts to the federal treasury and will also increase investment in the USA.
- Engage in entitlement reform.
Here are my thoughts in a point-by-point format:
- The idea to reduce government spending and bureaucracy is right but he seems to be using a very blunt instrument to perform this surgical operation.
- Sounds good to me but show me the proposed amendment.
- I’m not sure what drawbacks this might have.
- Why 3%? (Plus, show me the math so that I’m clear on the meaning here.)
- Sounds like politician-speak for “earmarks are bad but we can’t really get rid of them – let me show you that I want to fix the system.”
- I favor flat tax rates without loopholes – that provides predictability so that people know what to expect on tax day. That certainty allows businesses to more confidently make decisions.
- Vague but promising.