Rep. Quigley Gets Really Specific
Building on a report he made last year on budget process reform, Rep. Mike Quigley (D-IL) has taken the next step in his crusade to fix the budget. The sequel is a report with a comprehensive list of 60 recommendations on how to help put our budget on a more sustainable path. These recommendations run the gamut of options, covering most areas of the budget. He also provides additional options that he does not specifically endorse but that could be used to reduce the deficit.
The full list, if implemented, would save a total of about $1.7 trillion over ten years (as estimated by his office), with about 40 percent coming from reducing tax expenditures and 60 percent coming from defense and health care spending cuts. Social Security is also made solvent over 75 years but those savings are not included in the total, and domestic discretionary spending reform is mentioned but no specific reforms were embraced.
The table below presents some of the highlights of Rep. Quigley's plan.
|Select Recommendations from Rep. Mike Quigley|
|Ten-Year Savings (Billions)|
|Set Minimum Rebate for Medicare Part D||$112*|
|Enroll Dual Eligibles in Medicaid Managed Care||$12|
|Subtotal, Health Care||$277|
|Reduce Troops in Afghanistan and Iraq||$147|
|Reduce Military Overhead (Gates Plan)||$100|
|Reduce R&D Costs||$80|
|Reforms to Domestic Discretionary Spending, in Particular by Reducing Waste, Fraud, and Abuse||N/A|
|Limit Itemized Deductions to 28 Percent||$321|
|Implement President's International Tax Reforms||$129|
|Eliminate Ethanol Subsidies||$62|
|Subtotal, Tax Expenditures||$737|
|Farm Subsidy Changes||$94|
|Total, Excluding Social Security||$1,736|
*Estimate based on CBO Budget Options report.
Rep. Quigley's Social Security plan represents a balanced approach that is very similar to the plan presented by the Fiscal Commission. He raises the amount of wages subject to the payroll tax to 90 percent, raises the retirement age to 68, switches to the chained CPI, and makes the benefit formula more progressive. Looking at numbers from the Social Security Administration, it looks very likely that these changes would at least ensure 75-year solvency.
In addition, Rep. Quigley also details some reductions to farm subsidies that would save roughly $100 billion over ten years. Furthermore, he proposes having a debt-to-GDP budget cap, but he does not specify at what level or over what timeframe it would occur. Presumably, whatever the difference is between the combined impact of these recommendations and the debt target would be made up in domestic spending, since the cap was offered up in the section on non-defense discretionary spending.
Rep. Quigley has done a great job of going into great detail with this list of recommendations. While it doesn't look like the identified savings would stabilize the debt this decade, it's a big step in the right direction. By looking for additional savings from remaining areas of the budget, including domestic discretionary spending and other mandatory spending, this proposal could join the ranks of other major fiscal plans that would put the budget on a sustainable path.