U.S. Markets closed

Here are the 5 best ideas from the Republican and Democratic budgets

Rick Newman
Columnist

Here’s an educated guess: You probably won’t be reading through President Obama’s latest budget proposal for the federal government, or the Republican alternative that's hot off the presses. You might even tune out the whole debate about how Washington should spend more than $3 trillion in revenue next year.

That’s understandable, given that Washington budget battles involve more insincere posturing than "The Real Housewives of Beverly Hills." Plus, the two parties are canyons apart on spending priorities, with Obama aiming to finance dozens of mini-stiumuls programs with borrowed funds while Republicans hope to slash spending and balance the budget.

Still, the Republican and Democratic blueprints for how the government should operate in 2016 contain a short list of smart, generally bipartisan policies that would boost the economy with few negative consequences if Congress were to pass them, and Obama sign them. Amidst the political grandstanding in both budgets, we discovered these 5 good ideas:

Get serious about funding roads and bridges. The Highway Trust Fund runs short of money every year, and Rs and Ds both agree it’s in the nation’s interest to find more funding for roads, bridges, tunnels and the rest of the physical infrastructure everybody in America depends upon. Businesses think this is important, too. Republicans will never agree with Obama’s plan to enact a new business tax to generate more money for roadways. But both sides are interested in forming public-private partnerships and finding other innovation funding strategies for building and maintaining infrastructure as efficiently as possible.



Simplify the tax code. The two parties differ on many details, including tax rates for the wealthy, tax breaks for low-income families and the way investment income should be taxed. But they also agree on several important issues: The corporate tax rate needs to be reduced, and most corporate tax breaks eliminated. Individual filing needs to be vastly simplified, especially provisions such as the earned-income tax credit, which is so complicated that mistakes lead to billions of dollars in mistaken payments each year. And anything that makes it easier and cheaper for Americans to calculate their taxes makes it more likely they’ll pay what they owe.



Healthcare costs have to come down. Republicans want to put a lid on costs by privatizing Medicare and making enrollees bear more direct responsibility for what they spend limited funds on. Obama and his fellow Democrats want the government to push down costs by negotiating for discounts on prescription drugs, encouraging more patients to choose outpatient care over hospital stays, and putting more pressure on caregivers through tighter controls on what the government will pay for. As anybody who manages a household budget knows, you can lower costs through a bunch of small adjustments even if everybody in the house doesn’t agree with all of them.



Better job training is important. Obama has long pushed for new job-training programs in high-tech manufacturing and other fields, while Republicans in Congress want to identify redundant programs so money gets spent on whatever is most useful. If each side would inch over a little, they might end up occupying common ground.



Streamline the government. Americans generally believe the government is too big and bloated, which is why both parties have plans to rein it in. Obama has been pursuing modest consolidation of various agency functions. Republicans, not surprisingly, favor more aggressive pruning. Meanwhile, business groups and many mainstream economists say regulations (including state and local ones that overlap with federal rules) have gotten so onerous they impede the creation of new businesses and crimp economic growth. Americans would surely applaud efforts to streamline the federal bureaucracy, similar to the way big companies must occasionally reorganize and clear out deadwood.

In a rational world, Republicans and Democrats in Washington would seek out points of agreement and pass modest legislation fixing whatever they can agree to fix. In the real world, however, it’s often deemed more important to distort and attack the opponent’s plan than to identify what you might like about it. That’s why "The Real Housewives" has more satisfying outcomes than the real politicians of Washington, D.C.

Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.

[Get the Latest Market Data and News with the Yahoo Finance App]

More from Yahoo Finance:

Schiff: The Fed is "bluffing," no rate hike in 2015


The Black Swan in Plain Sight - King Dollar