November 3 Contract with America, Part 2

November 3 Contract with America, Part 2
By Larry Elder
12/2/2010

President Obama's fiscal commission supposedly offers an "aggressive prescription" to reduce the federal deficit.

It's not just the debt and deficit, stupid. It's the size, scope and bloat of the federal government. Here's my plan:

1) Accept the political reality that a) taxes cannot be raised, and b) entitlement spending (Social Security, Medicare, Medicaid) cannot be cut for current or near-future beneficiaries. Voters will not vote to raise their taxes. Voters will not vote to cut off their money. And politicians want votes.

2) To solve this, we need to raise money. How? Fund current and near-term liabilities by selling federally owned land. The federal government owns more than one-fourth of the land in America. The land use could then be taxed, raising still more revenue.

3) Sell or contract out government enterprises, including, but not limited to, Amtrak, the Tennessee Valley Authority, Hoover and Bonneville dams, operation of the post office, and government-run nuclear and other power plants.

4) Shut down several federal departments and agencies, including Energy, Education, Labor, HUD, HHS (including the Office of the Surgeon General), Interior (no need after government land is sold), Commerce and the EPA.

5) "Grandfather" workers 55 years of age or older into existing Medicare and Social Security plans. Offer those under 55 the option of setting up private savings accounts in lieu of Social Security. To replace Medicare, offer those under 55 the option of putting tax-free money into a health savings account. One can buy, as with car insurance, a policy with a high deductible for catastrophic care. Other medical needs would be paid for out of the HSA. Such an insurance policy would be cheap, and when people pay directly (not via a third party) for other medical needs, they're better shoppers, and providers would have to compete to provide quality affordable care.

6) Grandfather everyone currently on Medicaid, and then admit no more people and end the program at the federal level. Charity is not allowed by the Constitution, and it should be left to the states -- even better, left to the private and nonprofit sectors.

Once voters -- of whom many are on Social Security or will be within 10 years -- realize that they will not be "hurt," they'll be more likely to support this plan and to vote in politicians who do.

7) Change the law that gives businesses write-offs for offering health insurance to their employees. People don't get car insurance or homeowners insurance through their employers. Why get health insurance via their employers? Give individuals that same deductible (assuming the IRS remains), thus encouraging individuals to purchase their own policies. This would end the "portability" problem that occurs when people lose or change jobs.

8) To ensure that the federal government does not re-bloat, pass a constitutional amendment that limits the federal government to a small fixed percentage of GDP. (Ten percent?)

9) Abolish the IRS. With a dramatically reduced government, the essential federal duties -- set forth in Article I, Section 8 of the Constitution -- could be paid for, as envisioned by the Founders, by duties and tariffs on imports and exports.

10) Amend the Constitution to deny citizenship to children of illegal aliens. America -- unlike most industrial nations -- grants citizenship to children of illegal aliens simply because they were born on its soil. The 14th Amendment was meant only to confer citizenship on newly freed slaves, not on illegal aliens. But since the Supreme Court has ruled otherwise, the Constitution must be changed. Illegal immigration is unfair to those lawfully trying to gain entry, costs taxpayers money and affects the country's culture. Citizens ought to have a say about this.

11) Increase the number of, and ease the process for, legal immigrants -- tailored to high-end, well-educated foreigners who would add to the industrial capital of the nation. Establish a truly temporary guest-worker program, the size and duration of which would be determined by the country's needs. Hold back a portion of the alien's salary in a government account, to be given back only when the alien leaves.

12) Close the borders. Put the appropriate mix of border guards, fencing and other methods of policing the border and stopping aliens from entering, whether from the south or the north. Establish a means of monitoring those here legally so they do not overstay. Check the immigration status of everyone arrested, and turn illegal aliens over to ICE. Mandate E-Verify for all workers. Require all illegal aliens to register with the feds, and deport those convicted of serious crimes beyond illegal entry and using fraudulent documents to obtain work, granting legal status for the rest -- but not citizenship.

13) Amend the Constitution to overturn Supreme Court decisions that prohibit states from denying free public education and medical benefits, including emergency benefits, to illegal aliens.

14) Our military exists for our own national security. Europe and Japan can and should defend themselves. End all non-defense foreign aid, including contributions to the International Monetary Fund and to the World Bank.

Any questions?
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To read another article by Larry Elder, click here.

To read Part 1 of this article, click here.