How to Lower the Deficit?
October 15, 2014
The federal deficit for fiscal year 2014 was close to $500 billion. According to Romina Boccia, fellow at the Heritage Foundation, growing deficits do not have to be in the United States' future; with fiscal discipline, lawmakers could transform today's budgetary outlook.
Boccia offers several ways that the government can cut spending growth:
- Create a market-based health system: Over the next 10 years, half of government spending growth will be health care spending. Boccia encourages the government to transform Medicare into a premium support program, meaning that the government would make a contribution to a health plan chosen by an enrollee. Similarly, she encourages allowing Medicaid dollars to follow individuals, allowing them to choose their own health coverage. Such reforms would reduce costs and create efficiencies.
- Reform Social Security and Disability: These two programs are huge drivers of federal spending, and in just two short years, the Social Security Disability Program will run out of funds. Boccia encourages a number of reforms that would cut costs, including changing the cost of living adjustment, raising retirement ages and focusing each program on those who need it the most.
- Reform welfare: There are more than 80 federal means-tested welfare programs for the poor, at a cost of $1 trillion each year. She encourages a cap on welfare spending, in addition to new reforms that require the able to work or seek work before receiving assistance.
- Do away with waste: There are too many federal spending programs, whether wasteful or duplicative, that should have been eliminated years ago. Boccia encourages a review of these programs, in addition to doing away with programs aimed only at special interest groups.
Boccia also suggests limiting government spending so that it cannot grow faster than the U.S. economy.
Source: Romina Boccia, "5 Ways To Get the Deficit Under Control," Daily Signal, October 12, 2014.
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