Washington spending has reached an historic high of 25 percent of our economy, fueled by bailouts, “stimulus” spending, and costly health care mandates. We are piling a mountain of debt on our children. The National Debt has doubled in just the past 5 years. It's projected to triple over the next 10 years. Washington is now borrowing 40 cents of every dollar it spends. The Federal expenditures topped $3.7 trillion in 2010 and are expected to grow to $4.3 trillion per year by 2019. “Auto-pilot” spending on entitlement programs has risen by more than 579% since 1965. Taxpayers can no longer afford a bloated federal budget full of earmarks and programs for special interests. The budgetary process must be reformed to improve transparency and identify wasteful and redundant federal programs. In addition, institutional changes must be considered to constrain spending by politicians. Examples include a balanced budget amendment, a taxpayer’s bill of rights, and a supermajority in Congress for any tax increases. The size and scope of government must be returned to a level that the nation can afford. Forecasts suggest that the Obama administration’s spending proposals will push the national debt to 90% of Gross Domestic Product by 2020, doubling to 180% of GDP by 2035. The interest alone on the current debt already accounts for 5% of the federal budget, but will equal the entire budget by the year 2050. If action is not taken imminently, the federal spending will bankrupt the United States, thwarting economic growth and threatening our competitiveness in the global economy.
The overly complicated U.S. tax code creates an unnecessary burden upon all Americans, with an annual compliance cost estimated to be $365 billion. The 9 million plus word code is complex; unfair; inhibits saving, investment, and job creation; and imposes a heavy burden on families. At the same time, the tax code distorts investment decisions and reduces economic growth. The code is so complex because of the deductions, credits, and other preferences added to the tax code by special interest lobbyists. Because of these loopholes, taxpayers with similar incomes can pay vastly different amounts in taxes. This uneven treatment of taxpayers is fundamentally unfair and is at odds with the American value of equality under the law. The tax code must be replaced with a new code that is simple, low, flat, fair, and honest in order to promote economic growth while at the same time removing disparities in the tax code.
The financial crash has many states swimming in red ink and efforts to rein in spending are emerging across the country. In an effort to reduce costs, many states are addressing the costs associated with public sector unions, who have used politicians to extract lucrative retirement and benefits packages that leave taxpayers holding the bag. At the same time, private sector unions have been pushing to expand their power, despite the fact that union membership represents a diminishing proportion of the workforce. For example, unions pressured the National Labor Relations Board to penalize a private corporation—Boeing—for opting to expand in a right to work state. In addition “card check” legislation would eliminate current use of the secret ballot for workers voting on whether or not form a union, which threatens privacy protections and opens the workplace to increased intimidation and corruption. Card Check quite literally means that workers deciding upon union representation will not be able to make their decision privately, free from outside influence. Unions have the right to represent their membership, but laws should not be used to artificially strengthen their ability to negotiate.
Business in the United States continues to struggle not only with the sluggish economy, but also the burdensome regulations imposed by the federal government. One study estimates put the total cost of federal regulation on business in the United States over $1 trillion. The staggering cost of regulation is a significant burden for American businesses, with small businesses bearing an especially heavy burden. The coming years will see a significant increase in regulation, as federal agencies write new regulations to implement ObamaCare and the Dodd-Frank financial services reform legislation, as well major environmental regulations being pushed by the EPA. Regulatory reform is essential to ensure these regulations that do not impose costs that exceed their benefits. Cost-benefit analysis, risk assessment, risk prioritization, and market-based incentives are fundamental components that should be included in any reform of the process. In a global marketplace, the United States cannot afford to hamper its economic growth with excessive and unnecessary regulations.
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ObamaCare – the massive, 2,801-page, multi-trillion-dollar takeover of health care – is proving a disaster. In addition to actually increasing the cost of health care for families, the bill unconstitutionally mandates that every American purchase health insurance. Instead of real reforms to reduce the cost of health care and promote patient-centered care, the bill will burden families, kill jobs in America, bankrupt our country, and ruin the best health care system in the world. By creating new layers of bureaucracy between patients and their doctors, it could lead to government rationing of medical care. We must reverse the government takeover of health care and adopt a patient-centered approach.
Unchecked growth of the massive entitlement programs threatens to bankrupt the U.S. Government in the next few years. This could cripple our economy. Medicare, Medicaid, and Social Security – the three biggest federal programs – are on “auto-pilot” and growing faster than the economy. Spending on them consumed almost 10% of the Gross Domestic Product in 2010, and is projected to nearly double to almost 20% of GDP by the year 2050. And while these programs today consume a whopping 55% of the federal budget, they are projected to consume 100% of all tax revenue by the year 2050, leaving absolutely nothing for other spending, not even national defense. Entitlement spending has begun to skyrocket as the Baby Boom generation has begun retiring in earnest. Ten thousand new retirees join the rolls of the big federal retirement entitlements every single day, a pace that will continue right into the 2030s. Total current unfunded liabilities, or promised benefits owed, exceed $7 trillion for Social Security and and $38 trillion for Medicare respectively – meaning that we’d have to put that amount in the bank today in order to be able to pay all our future promises under these programs. FreedomWorks is fighting to get federal entitlements under control, based on the principle that recipients should have maximum ownership and control of their own retirement and health care savings.
The U.S. Environmental Protection Agency is responsible for some of the most costly regulations imposed on businesses and consumers. In the midst of an energy crisis, new exploration and the production of energy resources has almost completely stopped, our refining capacity is stretched to the limit, and our dependence of foreign energy sources is at a historical high. At the same time, the EPA has launched an expansive new regulatory regime that threatens to make electricity and fuel more expensive, while providing few, if any, benefits. Americans deserve common-sense energy policies that will increase competition, lower prices, and reduce our dependence on foreign oil. We are still many years away from finding alternatives to fossil fuels. The search for alternative energy sources should continue, but not at the expense of our current prosperity. Reliance on failed, big-government schemes to promote so-called “renewable” energy sources, and policies that do nothing to help increase production of traditional energy resources, are responsible for the uncertain state of America’s energy security. Americans deserve common-sense energy policies that will increase competition, lower prices, and ensure that the nation has a reliable supply of energy.
The education system in the United States has long struggled to improve the performance of students across the board. Unfortunately, America’s public school monopoly is designed to serve the interests of education bureaucrats and teachers unions rather than the needs of students. School choice allows the same principles that drive success in free economies to be applied to the public school monopoly. School choice would allow students to attend school based on factors and qualities that appeal to the student and the parents, instead of being assigned a school based on zip code or bureaucratic mandate. School choice would promote success by forcing schools to compete with one another in order to attract students, providing a real choice for all families, not just those who can afford a private education. This basic application of proven free market principles would not only solve the woes of the American education system but would also wrestle control of education away from self-serving teachers unions and the bloated bureaucracy, putting the choice back into the hands of the parents and where it belongs.
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