Skip to comments.Details of Sen. Tom Coburn's $9 trillion plan to balance the budget
Posted on 07/18/2011 12:38:25 PM PDT by gwjack
Sen. Tom Coburn's deficit-reduction plan
Details of Sen. Tom Coburn's $9 trillion plan to balance the budget
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Sen. Tom Coburn's plan:
Would save about $9 trillion over 10 years, including $3 trillion from entitlements, $3 trillion from government departments and agencies, $1 trillion from defense, $1 trillion from ending or modifying tax breaks and deductions, and $1 trillion in interest on the debt.
Would reduce the size of government by 25 percent over 10 years.
Would balance the budget within 10 years.
Read more: http://newsok.com/details-of-sen.-tom-coburns-9-trillion-plan-to-balance-the-budget/article/3586676#ixzz1SUBIXa8X
(Excerpt) Read more at newsok.com ...
On a quick read through, I see nothing that would directly impact me or clients other than the age increase. Hmmmm. I don't like the limitation on mortgage interest deduction even if it is $500,000. I think this is bad tax policy.
We need some significant spending reductions in FY 2012.
balance the budget now... not in 10 yr. plan is crap...
If things were handled correctly by the government, I don’t believe people of this country would mind some of the required changes, if and only if, it helped this country get back to where we want it.
The average American has the concentration of an ant these day's.
The 10 year balanced budget plan would be historical fodder in a year.
We need to cut NOW to see any effective salvation of our economic stature.
Lower the rates(preferably a one rate flat tax) and eliminate ALL deductions, even the sacred cow mortgage interest. You want to buy a big house, God bless you, just don’t ask my tax dollars to subsidize it.
Hi Paladin2 —
Can’t tell for sure, but if his plan is equally phased on the spending side, there should be about a Trillion dollar cut for fiscal year 2012. I still think that is meager, and am hoping for a greater reduction than that. There are a couple of loose threads in the article. I am trying to tie them down now.
Even yet, I think that is the most amount cut in fiscal year 2012 of all the numbers that have been tossed around.
US$ 9 Trillion is LITERALLY THE ROUNDING ERROR IN THE CURRENT CBO PROJECTION FOR REVENUES AND OUTLAYS over the next 10 years.
US$ 9 Trillion in reductions over a 10 year period is a victory in battle that will cause the loss in the wider war.
US$ 39 Trillion is a bare minimum requirement to actually "Balance the Budget over a 10 year period."
This macabre dance over the gravesite of the US socioeconomic order is the end of the Republic.
There are hundreds of pundits trying to point out the obvious, the System as a whole, the two parties, the MSM, the elite institutions and the controlling interests in the US are doing their best to create this false dichotomy to distract the American People to make it through the next 17 months until the elections.
The housing and construction markets need a cap gains tax reduction in the worst way, again, this would have the effect of increasing economic activity and revenues. It is not clear if one of the corporate "tax breaks" that is being eliminated is depreciation. This needs to be left alone, also LIFO inventory accounting. Removing these two things would simply cause the price of everything we buy go up, and in the end we the consumers would foot the bill.
There's a lot to like here, but for me these are glaring omissions.
Yup. Cut now. And cut deeply. And I’d go for excluding the mortgage interest deduction. In fact I’d go for eliminating all deductions. Just take a flat 10 percent of gross income across the board and be done with it. If the government can’t be run on 10 percent of our income, then it needs to be cut until it can.
The numbers are half-fast on their face. Maybe it would be a good start but there’s no arguing the current federal spending level is 40% borrow. A reduction in Gov’t of 25% over ten years is closer to a joke than a real solution. The older Rand plan-—half a trillion$ in cuts three years in a row is even short but is still the best proposal so far. Obamuzzie’s new spending MUST be rolled back immediately to keep the spending level from going exponential.
This is why there is nothing that can come from DC that will save this economy... there is no will to do the right thing.
Yep! The only way to do this, is to FORCE THE ISSUE by NOT APPROVING a debt ceiling increase! Period!
The 'HOUSE' has all the cards that count!
House Republicans - STAND FIRM and DON'T GIVE IN to the reckless spender's pressure!!!
I’d also go for the immediate imposition of a 25% tariff surcharge on imports from China. It is worth $91 billion first year to the Treasury. Hopefully it would decline each year as more production returned to the US.
Though I think eliminating deductions is a good long term goal, I don't think it is either fair or economically advisable to just - Wham! - slam the door on them. People have based their lives and their budgets on the current rules and should be given time to adjust - a phase out over at least five years.
I don't understand why there is a provision to prevent Medigap policies from covering the 1st $500 - aren't medigap policies private policies bought and paid for by individuals. Let's get the government out of the business of dictating the terms of private contracts (except to prevent fraud).
By the way, my recollection is that at the time the 16th amendment was crafted, there was discussion of limiting the tax to a maximum of 10% - but the thought was that 10% was such a ridiculously high figure that it would never be reached. (Maybe someone with a better memory can confirm or refute.) Maybe this time we DO need to put it in the Constitution.
The housing and construction markets need a cap gains tax reduction in the worst way
Um, you might want to do a little research on tariffs in the Great Depression. It didn’t work out too well then.
Although it may not be perfect, I give Sen. Coburn & his staff credit for at least doing their homework. With the exception of Paul Ryan, no else in DC seems to be coming up with any concrete ideas on how to tackle the problem.
Here’s the link to the pdf of Coburn’s plan. It’s very detailed and 621 pgs: http://coburn.senate.gov/public/index.cfm?a=Files.Serve&File_id=c6590d01-017a-47b0-a15c-1336220ea7bf
I am no longer fooled by these “10 year” plan budgets. They are bogus. They are a lie. They are fraud. They are deciet.
Caps the home mortgage tax deduction to $500,000 in home value.
This would be a serious problem for some areas of the U.S. A modest 1,200 sq ft, 40 year old home in San Diego was over $500,000 just a few years ago.
$500,000 homes might be mansions in Coburn's midwest but it's an old tract house in places like Southern California.
Agreed. That the radical version of the radical version of the limited-government party’s plan doesn’t even propose a balanced budget 9 years out just goes to show how lost as a country we are.
This is why the Balance (Budget Amendment) part of Cut, Cap, Balance is so important.
It's like having a debt ceiling crisis every year without risking a downgrade of the United States' credit rating.
Any cuts past this year are meaningless. Does anyone care what Congress agreed to do in 2001?
Cut them off. Put them in rehab. Enough is enough. Cut it all off.
You got that right. We don’t have 10 years. They need to cut at least $1.5 trillion by next year.
The voters can't remember what was happening last month! Congress has never left anything alone for 10 years. 10 years from now, the U.S. may be a third world country.
Even the Soviet Union used the '5 year plan'.
If Washington can't get the job done within 2 years, they're stalling and passing the buck!!!
How many billions in new spending would we save if the entire light rail system (trains to no where) were scrapped?
How many billions would be saved if all school kids brown bagged it and ate at their desk, with the teacher over seeing them, instead of using a school lunch room, with crappy food they just throw away and no supervision?
Until they put themselves under Medicare, term limits, and where they won’t take home 3/4th of their salary even if they only serve 1 term, we get no where.
Until they ‘fix’ the 40+ years of back room donor palm greasing in each entitlement program we get no where.
Congress must live under the SAME laws they force on us SERFS.
A balanced budget amendment is meaningless for two reasons.
1. All that has to happen for the government to maintain it's profligate spending is for there to be an increase in taxes. That's the Democrats plan already.
2. The government completely ignores the Constitution now. Why would it not also simply ignore the BBA?
“Would reduce the size of government by 25 percent over 10 years. “
This by itself is an immensely GOOD thing.
It is superior to any plan that keeps Government larger than that.
Bravo to Senator Coburn for putting it out there.
As for things like the mortgage interest deduction, I can tell you right now it rewards debt and punishes thrift. Do we want that incentive in our tax code?
Cutting workforce by 15% is probably not enough, but it beats the pants off of Obama’s grow the government ideas.
I'd agree with you on principle, but whenever I hear of flat taxes, I never see the subject of FICA addressed. With your 10% flat tax, along with your 7.2% FICA tax, that would end up being a %17.2 total tax right off of the top. For me and my modest income, mortgage, and a family of four, it would equate to a 70% tax increase. If my 7.2% portion of FICA is included in your 10% figure, then my total federal tax payments would stay the same, but that would mean that everything other than Social Security and Medicare would have to be funded with a 2.8% income tax.
The fair tax national sales tax crowd is always throwing out the figure of 23%, and that is completely unacceptable at any level.
“How many billions in new spending would we save if the entire light rail system (trains to no where) were scrapped?”
Also imperative we ditch this fiscal Trojan Horse.
Coburn’s Plan “Repeals 2010 health care law provisions that would add millions more people to Medicaid.”
Is this a back door repeal of Obamacare?
Thoughts? We lost Coburn. He’s for tax increases, just like all the rest of the old pols.
Why are you shouting?
“US$ 9 Trillion is LITERALLY THE ROUNDING ERROR IN THE CURRENT CBO PROJECTION FOR REVENUES AND OUTLAYS over the next 10 years.”
Not true. the Obama budget has about $44 trillion in 10-year outlays. So this is a 25% cut from that.
Far from insignificant!
It’s the largest deficit reduction plan out there so far. If you have a plan to do more, lay it out there.
And stop shouting.
Bingo. You nailed it. Congress cannot control future Congresses. It's a rule. Only a Constitutional Amendment can bind future Congresses. Anything short of that is a "Pledge," which is just another brand of furniture polish.
How does this save $1 trillion in interest?
Any “deficit reduction plan” that relies on “off year” cuts isn’t worth the paper it’s written on. That’s why “pledges” to reduce spending in exchange for tax increases always fail to the Dem’s benefit.
Make Taxes Voluntary
“off year” = “OUT year.”
Agreed. And 10% of all earned income for everyone, even the so-called “poor”. That way everyone will care about how our tax dollars are spent!!
Medicare and Medicaid
Saves $2.64 trillion from the two health care programs over 10 years.
Creates a combined $550 annual deductible for Medicare’s Part A (hospitalization) and Part B (physician services).
Caps out-of-pocket spending at $7,500 annually.
Prevents Medigap policies from covering first $500 of expenditures and limits coverage to 50 percent of next $5,000.
Gradually raises Medicare eligibility age to 67 by 2027, then to 69 by 2080.
Increases premiums for Medicare Part B by 2 percent a year for five years for all recipients.
Requires wealthier recipients to pay full premium costs for Medicare Part B and Part D (prescription drugs).
Repeals 2010 health care law provisions that would add millions more people to Medicaid.
Gives states more flexibility to manage programs.
Would save $17 billion over 10 years and keep the retirement program solvent for 75 years.
Changes formula to give less benefits to wealthier taxpayers.
Gradually raises early and normal retirement ages; a person born in 2010 would have an early retirement age of 64 and normal retirement age of 69.
Changes the method by which cost-of-living increases are computed, resulting in lower increases.
Reforms Social Security disability program.
Ends all benefits, subsidies and tax breaks for those with adjusted gross income more than $1 million.
Caps the home mortgage tax deduction to $500,000 in home value.
Ends the home mortgage tax deduction for second homes and equity lines of credit.
Puts a five-year limit on claiming the Earned Income Tax Credit.
Ends the Additional Child Tax Credit for people without a valid Social Security number.
Makes employer contributions to health insurance premiums taxable above $7,500 for singles coverage and $15,000 for family coverage.
Collects more taxes from U.S. citizens working in other countries.
Eliminates numerous energy-related tax breaks, including ones for ethanol, clean coal, alternative vehicles, marginal wells and energy efficiency.
Eliminates numerous economic development tax breaks, including New Markets, Empowerment Zones and the Indian lands tax break in Oklahoma.
Freezes federal employee salaries and bonuses for three years, freezes locality pay for five years.
Reduces federal workforce by 15 percent, or 300,000 people.
Reduces federal contract employee slots by 15 percent.
Reduces civilian agency travel budgets by 75 percent.
Caps sick time and leave for federal employees and restricts how much can be carried over.
Ends all direct payments to farmers (those that aren’t based on crops grown and commodity prices).
Ends all countercyclical payments (those based on market prices for certain crops).
Reduces conservation programs by 60 percent
Reduces food stamp spending by $10 billion a year and puts new requirements on eligibility.
Department of Defense
Reduces the U.S. Army’s active duty personnel authorization to pre-2007 level of 482,400.
Freezes salaries of civilian workers and cuts workforce by 5 percent.
Cuts personnel in Europe and Asia by one-third.
Requires military retirees to pay more for private health care coverage and limits TRICARE Prime to active duty soldiers and dependents.
Delays or cancels some weapons systems, including Army’s Ground Combat Vehicle.
Closes elementary schools on domestic military bases.
Cuts $97 billion over 10 years from the Federal Highway Administration for low-priority projects.
gives them cover and someone else to blame while kicking the can down the road.
Government can, it's the politicians in government that can't!
I looked, but I didn’t find the part about defunding Obamacare.
There is nothing in there about setting the debt ceiling.
Zer0 and his clowns rocketed spending by Trillions. ANY debt ceiling raise helps lock in that profligate spending.
The ceiling must be held steady, so that we can start undoing the recent damage. They could pass a debt ceiling bill that sets it at the current $14.3 trillion, just to make a statement - stake out the high ground.