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Good question on where I would cut spending. Here is $1.2 Trillion:

Eliminate Dept of Labor, Dept of Education, Dept of Commerce, US Postal Service subsidy, National & Community Service (primarily Americorps), Small Business Administration, Department of Energy, National Science Foundation, EPA, HUD, Department of Agriculture, Department of HHS discretionary spending. Totals $598.2 billion.

Cut the following by 10% - Medicare, Army Corps of Engineers, Medicaid, Social Security, Dept of Interior, NASA. Saving of $154.3 billion. If the Medicare, Medicaid and Social Security savings cannot be realized through efficiencies and administrative headcount reduction, cut benefits.

I would cut defense by $300 billion from roughly $700 billion to $400 billion. This will take us to the 2004 level, excluding spending at the time for the Iraq and Afghanistan wars. To realize the spending reduction I would pull our troops out of Afghanistan, Iraq, South Korea, Germany, Okinawa, and most other “legacy” foreign bases. Let the rest of the world deal with their own problems. I would also cut the DOD civilian bureaucracy by 20-25% as well as a significant amount of contract services and reduce the bloated senior and general officer ranks.

I would cut Homeland Security by 20%. The remaining departments - Treasury, State and Justice would get cuts of 50 to 80% eliminating most program. The Postal Service and Amtrak subsidies would also be eliminate.

Eliminate $108 billion contribution to the International Monetary Fund.

My cuts total $1.2 Trillion of the $1.3 trillion needed. To bring the budget to surplus I would do the following:

1) Apply a 10% tariff surcharge to all imports of goods. Such a tariff would raise close to $200 billion (10% of $1.935 trillion).
2) Privatize through IPO’s - TVA, US Postal Service, Amtrak, REA, General Motors, AIG, Fannie Mae, Freddie Mack, and other off budget or on budget agencies involved in activities that could be performed by the private sector. Return management of student loans to the private sector as well as all default risk.
3) Privatize and fund through user fees functions currently performed by the government such as air traffic control and airport security. Assess $10 fee on every non-citizen entering the US (many countries do this) when passing through immigration to partially offset the cost of the immigration service. Assess a $1000 fee on every container offloaded in a US port to partially offset the cost of the Customs Service, the Coast Guard, and other costs the federal government incurs with respect to maintaining harbors and waterways. Charge admission to all parks, recreation areas, and museums including the Smithsonian. Anywhere costs can be directly tracked back to users, assess user fees to defray the costs.
4) Eliminate all “cost of living” raises for federal employees including the military, Congress, and the President. Require a Congressional vote for any cost of living raise for federal employees and limit it to no more than the percentage of average annual wage increase in the private sector for the preceding year.
5) Eliminate all defined benefit pension plans for federal employees, replacing them with defined benefit plans.
6) Aggressively attack Social Security fraud, particularly in the area of disability payments.
7) Institute a flat income tax with no deductions or credits.
8) Lower corporate income tax to 20% and eliminate all special deductions and credits. Offset any revenue loss with higher tariffs.
9) Cut $4.5 billion annual cost of running Congress in half.
10) Exit the United Nations, NATO, World Bank, IMF, and other international agencies.