Dear Congressman Boehner:
We know you are in a tough spot these days. President Obama is pressing his election mandate to get a bill passed NOW that would eliminate tax hikes on the 98% of Americans making less than $250,000 per year, while your membership is insisting that they will only agree if the nation's millionaires and billionaires are given the same protection.
And, the other side of your conundrum is that you have to come up with an agreeable package of spending cuts that will help reduce the nation's debt....always a huge goal of the GOP, except when you want to start wars somewhere and don't feel like paying for them.
So far, you and your party's failed Presidential candidates have been trying the old "We'll reduce government inefficiencies" ploy. Unfortunately, both the President and the public have been asking a really tough question..."OK...tell us WHAT you want to cut." To date, we haven't seen anything that gives us any confidence, especially when it is pretty clear that what you want to cut is entitlement programs which have greatest benefit for the poor and the middle class.
On the tax side, you are pretty much screwed. The longer your party keeps insisting on protecting the fortunes of the super rich and blocking tax relief for nearly all of America, the more your ratings go into the tank. This is not good, especially when your ratings after the last election are in the toilet. You can twist and turn all you want, but sooner or later, you are going to have to bite the bullet and give the President what he is insisting on.
So, to help you out of this box, let me offer three simple steps you and your members could take right NOW that will can save a half trillion dollars over the next decade:
STEP ONE: Pass Legislation which mandates drug manufacturers offer competitive pricing for the drugs they sell to the government.
Back in 2010, the General Accounting Office did a study which, to nobody's surprise, found that your party's 2007 gift to the drug industry (a Medicare Part D bill which forbids the government from bargaining for drug prices) was hugely expensive to the tax payer.
Commenting on that study, the Association of Generic Drug Manufacturers noted:
Today’s GAO report makes clear that competition is needed to make lower-cost biogenerics available to all patients. The report documents that competition is needed so that health insurers can negotiate for lower-cost alternatives to high-priced specialty-tiered brand drugs -- many of which are branded biopharmaceuticals. The positive impact of biogeneric competition has been validated in many economic analyses. Estimates from these studies pin the projected savings from $42 billion on the low end to as much as $108 billion during the first 10 years of biogeneric market formation.”Let's assume a savings over the next decade from such action at $100 billion
STEP TWO: Eliminate the Defense Department's F-35 Fighter Jet Program
The ever-wonderful Charlie Pierce at Esquire shines the spotlight on this lovely boondoggle through the eyes of Canada which is currently on the hook to buy some when (if ever) they are produced.
There's a huge fight brewing in Canada over the F-35, a new fighter plane of which Canada promised to buy 65 a couple of years back, and which now looks like it's going to cost our nice northern neighbors somewhere north of $46 billion over the life of the airplanes. This has caused the Canadians to get a good close look at the lunatic way our defense industries operate down here and, as is also the case when they look at the way we deliver health care, the Canadians think we're all out of our minds, and that we've played them for suckers. They are, of course, correct on both counts.Now note....this is the cost to just to the Canadians......to us, says a Reuters report...a tad more:
Reuters) - The U.S. government now projects that the total cost to develop, buy and operate the Lockheed Martin Corp F-35 Joint Strike Fighter will be $1.45 trillion over the next 50-plus years, according to a Pentagon document obtained by Reuters.Now let's not forget that this is the Pentagon's estimate and I dunno about you, but from my experience, the Pentagon's skills at cost estimation have always been a bit dubious. But let's give them the benefit of the doubt. 1.45 TRILLION over 50 years works out to 29 BILLION per year for this single weapons system. Cost over a decade, just shy of $300 billion bucks.
The Pentagon's latest, staggering estimate of the lifetime cost of the F-35 -- its most expensive weapons program -- is up from about $1 trillion a year ago, and includes inflation.
(Remember....this is just ONE weapons system. The Pentagon has thousands in various stages of development....computerized battlefield systems, ever more destructive weaponry, planes and tanks and cars and trucks and submarines....all designed to compete in the type of wars we fought ten years ago instead of the kind of warfare we are seeing today in Libya, Syria, etc. As Charlie wryly notes....virtually no US planes have been shot down in combat in a long long time.)
There are trillions to be saved in this one area John, and yet your party has proposed Defense budgets vastly higher than even the Pentagon wants.
You want to reduce the debt? Reduce your support for unwanted, insanely expensive and wildly complex weapons systems whose production costs are only the tip of the expense iceberg.
STEP THREE: Eliminate subsidies to the oil and gas industry.
The website Price of Oil provides this range of estimates for what our subsidies to, and reliance upon petroleum-based energy truly costs us:
$2.4 Billion: subsidies to the Big Five producers debated and defeated in the Senate in 2011 and 2012NOTE: The above blockquote contains a number of useful links which, unfortunately, did not translate to this post. To see and follow them, click on the link to the full quote above.
The Repeal Big Oil Tax Subsidies Act, sponsored by Senator Menendez (D-NJ) was debated and defeated by the Senate for two years running, and would have eliminated $2.4 billion in annual tax deductions for the five major oil companies: BP, Exxon, Chevron, Shell and ConocoPhillips.
Although the move would have been an initial step, it’s just the tip of the iceberg. So called “independent” oil companies are hardly small businesses. Major integrated oil companies also include Occidental, Amerada Hess, Marathon, Murphy Oil and dozens of others. Together, these companies produced 53.5 percent of U.S. oil in 2009.
$4 Billion: Subsidy cuts President Obama proposed in the 2013 budget.
President Obama has proposed cutting fossil fuel subsidies every year he’s been in office. The projections for savings have varied slightly each year but always hover around $4 billion annually. Congress has never even proposed voting on all of them.
$10 billion. Low end credible comprehensive estimates. Several recent independent estimates of U.S. fossil fuel subsidies all arrive at roughly this number, although they consider slightly different things. Recent studies include those conducted byManagement Information Services, Environmental Law Institute, and the Organization for Economic Cooperation and Development – OECD. (The OECD numbers compiled and analyzed here.)
The Sanders / Ellison “End Polluter Welfare Act” also clocks in at $11.3 billion annually.
$52 billion. Highest credible comprehensive estimate. Includes some costs associated with defending pipelines and shipping lanes in the Persian Gulf. Earth Track, an NGO that specializes in subsidy valuation, estimates that annual oil, gas and coal subsidies total about $52 billion annually.
So while the range of costs for petroleum subsidy costs to taxpayers is very large, depending on what things you throw into the kitty (like what we pay for navies and armies because of our reliance on foreign sources), let us take a conservative course here and use the $10 billion per year estimate or a decade-cost of $100 Billion
OK...let's add them up over the coming decade:
Mandating competitive pricing for Medicare Drugs: $100 billionTOTAL: A HALF A TRILLION DOLLARS!!!
Eliminating the F-35 fighter plane: $300 billion
Eliminating or at least trimming petroleum subsidies: $100 billion
See how easy that was John.....and I hardly even broke a sweat. Take the roughly $1.4 trillion the President will restore to help reduce the deficit AND these savings, and you are getting close to TWO TRILLION in savings over ten years. If you really cared about reducing the debt, I would think you and your party would JUMP at those kinds of savings. What's keeping you?
I am sure that in the vast federal budget you can find lots of similar areas where policies and programs created by Congress to please wealthy donors could be trimmed just a little bit.....instead of gutting Medicare, Medicaid, Social Security, Food Stamps, college loans, environmental protections, and effective regulation of Wall Street.
But gutting social programs is what you and your party REALLY want to do isn't it John? The party trying desperately to protect the insanely wealthy is never going to even bother with cuts like the ones I've suggested.
If you don't serve your masters, you have to worry that Eric Cantor and Paul Ryan are going to shiv you in a dark corridor of the House one late night. It isn't easy being a leader. We understand, but we have no sympathy. Your party created this mess. There aren't a lot of easy ways out of it for you right now.
It's going to take a LOT of spending cuts to help reduce our deficit John. We know you care deeply about it now, so I will invite fellow Kossacks to throw out their own ideas on potential savings you can choose from to reach your goal.