Here it is, your 23/24 US Government Shut down budget

 

Okay this is just a rough draft/guideline of some budgetary ideas since our illustrious Congress doesn’t seem up to the task.

As regular readers know I am an independent conservative so this is reflected in how this budget proposal shapes out. You can also take into account though that a government still has functions to perform and ongoing initiatives just cannot be cut or dropped at the drop of a hat. And since we live in a winner take all society which is morally wrong and economically unsustainable over time, this budget proposal will reflect that the government does need to protect the populace from individuals and groups that try to use the government to their advantage such as tax cuts and circumventing the needs of the general populace.

Knowing the government cannot do everything though and that contrary to some people’s beliefs cannot borrow incessantly we do need to reign in the budget to spend less and start reducing the debt. It amazes me that people believe we can keep borrowing and expect us to make all the payments to keep up our credit ratings. Sooner or later you cannot produce enough revenue to pay the interest and borrowing to pay interest is just ridiculous.

Finally this is an outline or guide to some changes that need to be made. Our government should be taking a multi year deep dive into repairing our budget. There are other factors to consider and I will touch on those a bit as I write. Yet to obtain a better handle on what is in front of us, we need to start somewhere. And it needs to be flexible, both in immediate needs and as a plan to move forward.

So with the above as a brief guideline, let’s get started.

The first statement is a general lets just cut 2.5 percent from the whole budget. Now we aren’t talking about cutting services or benefits by 2.5 percent, but operational budget. Another words each department etc. will need to reduce spending on how their budget operates without effecting the output that that department is required to meet via previous legislation. And each department etc. will need to work from the top down to help the various groups within it to find ways to cut. And this is for the first year so there probably is going to be some redundancies, some normal attrition, better efficiencies in tasks found and combining some operational tasks to make this goal of 2.5 percent. And it does not have to be a blanket 2.5 percent, the executive branch will be responsible to mediate costs in case maybe one department can cut 3 percent and another may only cut a bit over 2 percent. This coordination will be coming from the White House staff and Congressional committees that overlook the various tasks our government performs from National Parks to the military.

I do want to make a few exceptions. We can probably find 3 percent in the military since it is so large. One thing we do not want to cut is battle ready troops and supplies such as ammunition. Yet with the largesse of the military there will be opportunities for budget cuts by reduction of bureaucracy and better use of working with vendors to obtain better costs on what is needed. The military may not want to admit this, but they could do a better job of working with vendors and reducing redundancy.

And another aspect of the military budget we need to address is and this will take a few years to work into the budget, but is to have a fund to handle situations like Ukraine that can be kept year over year if not needed, but ready when needed. Right now we do need to fund Ukraine temporarily until their war is resolved. Many do not like this expense, but it is necessary. Yet for future planning depending on how the world is playing out, we should keep a budget for flash points that is above the normal military budget. This way we are not increasing spending ad hoc in a budget year, but can tap resources already built in, whether it be weapons or supplies or money. Again part of the military budget, but over and above what is needed for ourselves. This is somewhat like the petroleum surplus reserves that can be used when needed.

For now though we need to bake in some funding for Ukraine as we work towards the larger goal.

Second exception is the budget for immigration which needs a complete overhaul, however it cannot be overhauled until we develop a new immigration policy. Legislation needs to be written to address the changing world and our changing needs. I am not going to make immigration policy suggestions here, but they are needed and until we develop the new policies the budget will need to be scrutinized to find some cuts without hurting our immigration staff, border patrol, and handling in a humane way a crisis such as what is happening at the border. This is definitely something that will need multiple years of work both on budget and policy until completed and needs to be made a priority by the appropriate Congressional committees. Yelling and screaming there is a problem is just another problem in and of itself.

A third exception for cuts is to start paying ahead our debt. We need to make extra payments towards reducing our debt especially if we can cut out any high interest debt. I know that most of our borrowing is issuing bonds so we may have to change the strategy around issuing new bonds or making them callable during these high interest rate times. There are probably some other ways to retire some of our debt and need to be explored. We have to reign in how much of our budget is dedicated to paying interest so we can truly make a long term dent in the budget.

And for change of course, we also need to increase revenue. And yes this is not everyone’s favorite topic. I am going to touch on a couple of items though and this is by no means an overhaul of the tax code, but some changes to help change an attitude about who should be the priority of our government and here is a hint, it is not the ultra-wealthy.

The tax brackets are interesting if you look at them in general and is hard to explain in the written word. It is better to see a chart, yet copying and pasting them in this post would take up a bit of space. You can internet search yourselves how it works, yet generally there are 7 tax brackets and 4 categories or filers. Generally though the more money you earn the higher of a tax bracket you fall into. And there is the problem that if you make enough money you can higher tax professionals to reduce your tax burden so long term there needs to be quite significant changes in the tax code. Yet for now though outside of working on reducing some of the extravagant tax loopholes, we split up the tax percentages based on income so that the lower four brackets see a reduction and the fifth bracket sees no change or slight increase and the top two brackets see increases up to 38 and 41 percents from 35 and 37. Yet you have to be careful because if you lower the tax bracket for the first three levels by the incremental way taxes are calculated (you have to see the charts) the higher brackets see their increase not increase as much as you would think. Each bracket only uses the higher percentage above the previous levels income bracket. It is difficult to explain in words, but everyone is taxed at 10 percent for the first level, then 12 percent from the first level to the second level, 22 percent on the amount from the second level to the top of the third level and so forth. So adding 41% to the top bracket does not mean by any stretch that all their income is taxed at 41%. Their total is drawn down by the lower brackets that are calculated. You don’t want to be caught up in higher earners saying their taxes are going up too much, it is not as much as they would make it out to be by saying their taxes are going up 4 percent. In totality, it isn’t.

Another benefit of changing the tax code and lowering the amount to the first three brackets is you can switch some of this reduction to social security. This will not solve the social security shortfall by itself. Also we do not include the increase to the employers contribution. Many small businesses do not need extra expenses right now, but if someone is making $50,000 and we reduce the tax level from 22 percent to 18 percent for the third level and 12 percent to 10 percent for the second level which actually increases the first level overall since the first level is taxed at ten percent then their total tax bill drops actually from $6617 to 5658.00. This example is derived from the current first two brackets being turned into one and taxed at 10 percent and the third bracket becoming the second bracket and taxed at 18 percent and the numbers are based on single filer status. So over the course of a year the single filer $50,000.00 income saves about a thousand dollars in taxes and based on my social security change approximately 50 percent or $479.50 goes to the tax payer and $479.50 goes to social security taxes. These are not astronomical changes, but do reduce the tax burden who may be struggling to pay for everything right now and helps to increase social security revenue for the future. This alone will not save social security, but with some other enhancements not added here it will definitely help alleviate the upcoming shortfall.

To recap, this year we are making soft cuts of 2.5 percent to the total budget, forcing a deep dive on the military to reshape their thinking on the budget so we can increase immediate help to Ukraine, but long term bake in a fund to have for these types of situations, forcing an overhaul of immigration policy so we can work with what we have to create a realistic budget for border security. Quite frankly building a wall that is going to be breached constantly, subsequently will need repairs and will not prevent the infamous problems at the border is a waste of money. We need some serious reflection as to what we expect from policy, where the true problems lie and yes some of it is the masses at the border, but what else is happening such as illegal immigrants being able to work cheap and corporations turning a blind eye to save on labor costs are some examples of why we cannot expect to solve problems without spending the time to create a comprehensive policy to better manage the issue. Throwing money at the border is not a sustainable immigration budget or policy.

And minor changes in the tax code to switch who should be receiving better policy by our government. And from here we take the deeper dive to remove the frivolous tax breaks that allow the headline grabbing billionaires paying very little in taxes. Some business breaks such as paying employees and investing in future products are reasonable tax breaks, but this needs to be addressed in a constructive way to better understand where unnecessary breaks are given.

We also need to start paying down the debt so more money can go to the actual services the government provides which will eventually mean we have to raise less money to have these very same services.

This is just a start. Our Congress needs to start working on each year’s budget in February so they can bring proposals to the floor by July to be reviewed, discussed, debated and voted on long before September, or at least voted on in September. And flexibility needs to be accepted. Each year brings us new obstacles to overcome.

Oh and a final point, we may need to increase the amount allocated for disaster relief. Some of these disasters are budget busters apparently so planning ahead is needed. And if we do not use all of it one year, we should rollover it over in its own fund until the disasters aren’t as expensive or be prepared for years that are more than anticipated.

The madness must end.