House Budget Committee Chairman
Paul Ryan was right last week to predict the budget conference would
not succeed by trying to reach a “grand bargain.”
“If we focus on some big, grand
bargain then we’re going to focus on our differences, and both sides
are going to require that the other side compromises some core principle
and then we’ll get nothing done,” Ryan told the Washington Post. “So we aren’t focusing on a grand bargain because I don’t think in this divided government you’ll get one.”
The double-pain strategy that
would be at the heart of any grand bargain--tax hikes and entitlement
cuts--wouldn’t just be difficult to pass in the current Congress. It
would also be a dead loser for the American people. Asking the public to
bear the pain of austerity so that Washington doesn’t have to is no way
to deal with overspending and bureaucratic bloat.
Looking for small places the
two parties can agree, as Chairman Ryan recommended, is the best viable
way forward. And practically anywhere in the federal government the
conference committee looks, it will find lots of significant “small”
bipartisan opportunities that could add up to a “big” deal.
Take a few examples which both sides should be able to agree on:
- Medicare
and Medicaid currently tolerate fraud of approximately $70 to $120
billion a year. That is roughly $1 trillion over ten years paid to
crooks. These are not small time crooks. Many of them are churning out
dozens, even hundreds, of fraudulent claims each day. A modern,
computer-based system should be able to catch them as a matter of
routine. Visa, Mastercard, and American Express do this so well that
they sometimes flag even legitimate transactions for extra attention. We
should insist Medicare and Medicaid meet the same standard.
- Approximately
25 percent of all Earned Income Tax Credit payments are improper. That
is $132 billion over the last ten years. Plugging this hole should be an
easy bipartisan decision worth tens of billions of dollars.
- In 2012 alone, the Government
Accountability Office reported $108 billion in improper payments. And
2012 was a typical year. While not all of this money is waste, it
suggests the government spends hundreds of billions of dollars in a
decade that it simply never should have spent.
- Senator
Tom Coburn and his staff have compiled more than three dozen reports
that detail absurd levels of waste and mismanagement. Last year, for
instance, he identified more than $70 billion
that is sitting unspent years after it was appropriated due mostly to
the incompetence of Congress or of the bureaucracy. If the budget
conference committed to fixing even half of the ridiculous waste he has
cataloged, it would be worth hundreds of billions of dollars
- A
study by the IBM Center for Business of Government concluded that if
the federal government managed its operations to the same standard as a
modern multinational corporation, it would save $100 billion a year--or a
trillion in ten.
- Moving
from Medicare’s current “Fee for Service” model to an “Administrative
Services Only” model similar to the coverage many privately-insured
Americans have today would save roughly half a trillion dollars over ten
years, according to UnitedHealth Group's Center for Health Reform and Modernization.
These should not be difficult or partisan decisions for the budget
conference committee. They should be easy. And as I explain in my new
book, Breakout (published next week), there are many, many more opportunities like these ones.
We must break out of the two
obsolete mindsets that dominate Washington today--acceptance of a “new
normal” on the left, and commitment to austerity on the right--to create
a much better future for the American people.
Your Friend,
Newt
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