Our elected officials can't seem to reach an agreement to raise the debt ceiling and lower our deficit projections, but David Walker has a plan.
Walker, founder and CEO of the Comeback America Initiative and former U.S. Comptroller General, this week released his "Restoring Fiscal Sanity Report," which attempts to do what our politicians seemingly cannot. (You can find the entire report here.)
Walker's plan aims to cut $3 trillion from the national deficit over the coming decade, with a goal of reducing U.S. public debt-to-GDP to 63% in 2021 and falling vs. the CBO's current projection it will hit 76% and rising in 10 years.
Because the government has "grown too big, promised too much and waited too long to restructure," Walker says "everything has to be on the table to solve our problems."
As you'll see in the accompanying video, "everything" means a combination of the following:
- Impose tough restraints on government spending, including PAYGO rules, to balance the budget by 2014.
- Reform entitlement programs to make Social Security "solvent, sustainable and secure."
- Address health-care inflation by raising the eligibility age for Medicare to 67 and moving toward universal coverage by 2020.
- Changing the federal government's budget process to help eliminate "waste, fraud and abuse."
- Cap military spending at 3% of GDP by reducing U.S. forces overseas, cutting overhead by at least 25% and reforming the DOD's procurement process.
- Comprehensive tax reform both to broaden the tax base and make it more progressive. Walker notes 51% of Americans pay no income tax while the median average rate paid by the wealthiest 1% is under 19%, meaning the burden has increasing fallen on the middle class. Walker would eliminate the difference between capital gains and ordinary income, and the double taxation of dividends, while capping the top marginal rate for both corporations and individuals at 25%.
"The vast majority of the problem is a spending problem and to restore fiscal sanity it's going to be primarily spending cuts, but not solely," he says in explaining his rationale for ending the Bush tax cuts and overhauling the tax code.
Walker also notes all government spending is not created equal and his plan calls for a $500 billion package for infrastructure projects to help the economy in the near term and, hopefully, boost America's long-term competiveness.
The devil's always in the details (and the CBO scoring) but Walker's plan seems serious, balanced and something all but the most ideological politicians can rally around. In other words, very little like the plans currently being bandied about in Washington. (See: Americans Go "From Disappointment to Disgust" with Debt-Ceiling Debate, David Walker Says)