Wednesday, November 16, 2011

The Vain Turtle

Last week President Obama signed an Executive Order limiting government printing and the use of extraneous promotional items or “swag”.

The goal of deficit reduction and a balanced federal budget is a marathon – and the President took one step toward the end of that marathon. If the President, however, is going to stop for a pat-on-the-back and a photo-op after each step in this marathon, we will never make any progress.

I believe the President’s goal of limiting government printing is a good policy, but it doesn’t go far enough. The issue that now needs to be addressed is the amount of unnecessary art and graphics that are included in many federal government documents.

The federal government could save hundreds of millions of dollars each year through a program of removing unnecessary art and graphics that are not substantively relevant and purposeful to the information conveyed in a government document. This savings would be realized by not purchasing the unnecessary art, not engaging in unnecessary graphic design and not paying to print these extra materials.

In one simple move, Congress could write into every law that requires a report to the Congress to comply with a ban on unnecessary graphics and images. As an addition to the work of Congress, the President could also impose a similar ban on documents and publications produced by the administrative branch through an Executive Order.

Tuesday, November 8, 2011

$4.2 Billion in New Revenue from International Money Remittances

Each year more than $42,000,000,000 is transmitted internationally (remittance transfers) from the United States to other countries. This particular amount, while stated in U.S. government studies, may be understated by as much as 10 to 20 percent. According to the Inter-American Development Bank (IADB), the largest source of development financing for Latin America and the Caribbean, it is estimated that Latin American immigrants alone sent approximately $46 billion abroad to their families in 2008.

The money that is transmitted abroad is money that is not returned to local domestic businesses, does not generate any sales tax revenue and does not encourage the economic development of communities in the United States. These international money remittances are used to pay for consumer goods, automobiles, utilities and services that help create jobs in other countries.

Above and beyond the failure to create a money-multiplier effect through consumption in local communities, the sales tax impact of this lost money robs states and local governments of more than $2.5 billion in revenue each year. These sales tax revenues could have been used at the state and local level for enhanced infrastructure, education, emergency services and other programs that are critical for the development of strong communities.

It is therefore recommended that a direct tax of 5% to 10% be levied on the dollar amount of the outbound international remittance transfer. Using the minimal estimate of $42 billion in funds transmitted, a 5% tax could yield $2.1 billion in new revenue. Using the 10% rate, we could raise $4.2 billion in new funds without cutting any programs or reducing services.

Tuesday, November 1, 2011

During the summer of 2011, Congress spent a considerable amount of time, energy and resources talking-at the American public about the need to reduce the federal deficit, cut wasteful spending and potentially balance the budget.

This debacle over the increase in the federal debt ceiling was the culmination of a lot of talk that has not resulted in a lot of action. My goal for this book is to propose policy changes that can bring in $500 million here, save $2 billion there, and so on. The aggregate impact of just these recommendations could be tens of billions, if not hundreds of billions, of dollars toward deficit reduction.

The “Budget Control Act of 2011”, which was passed to resolve the debt-ceiling crisis of the summer of 2011, established a new committee in Congress known as the “Joint Select Committee on Deficit Reduction”. The goal of the Joint Committee is to “reduce the deficit by at least $1,500,000,000,000 over the period of fiscal years 2012 to 2021”. If we distill the mission of the Committee into realistic terms, the goal is to create an average savings of $150 billion a year for each of the next ten years.

Perhaps this “Joint Select Committee on Deficit Reduction” should not rely solely on traditional sources of input but also look at citizen recommendations. Certainly, the Committee has nothing to lose by receiving citizen input.

Tuesday, October 25, 2011

GAO Update on Long-Term Fiscal Outlook
The Budget Control Act limits spending for FY 2012-21 and created the Joint Select Committee on Deficit Reduction. The Act provides for $1.2 trillion in deficit reduction over the period--either through enactment of recommendations by the Joint Committee or through automatic procedures that would reduce spending. However, based on our simulations even this level of deficit reduction is not sufficient to ensure sustainability.

Tuesday, October 18, 2011

With partisanship and gridlock blocking any significant changes to the federal budget, it is time for Congress to take a new, fresh approach to reducing the deficit. Rather than just seeking a massive overhaul of the federal government, work can be done right now to find billions of dollars for deficit reduction by identifying ways to “save a billion here and raise a billion there”.

“Billion Dollar Chump Change” is a groundbreaking series of public policy recommendations by acclaimed Washington, D.C. lobbyist, Mark Guimond. This book is a guide for the United States Congress to achieve savings of more than $273 billion dollars by finding billions of dollars of “chump change” that can make a dramatic difference in deficit reduction.

Congress was to have started real deficit reduction with the creation of its new “Super Committee” - the “Joint Select Committee on Deficit Reduction”. This Joint Committee had the limited purpose of reducing “the deficit by at least $1,500,000,000,000 over the period of fiscal years 2012 to 2021”.

To help the Joint Committee achieve its mandate to identify $150 billion in deficit reduction each year, “Billion Dollar Chump Change” provides Mark Guimond’s common-sense recommendations that can provide $27.32 billion annually for deficit reduction. This represents more than 18% of the “Super Committee’s” total goal. 

This inspiring work serves as a model for a future in which Congress more actively works with citizens and constituents to find real solutions to government problems.