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Where are the New Ideas?

Several years ago, while I was in management consulting, I remember pointing out to the CEO of a St. Louis-based chemical manufacturing company that he was losing many millions of dollars each year simply because his company, while growing through acquiring other smaller companies, had failed to integrate the various businesses. I showed him one example in detail, where the company was literally allowing their most expensive product component to expire on storage shelves in some locations, while continuing the purchase more in other locations, and at increasingly high prices. This occurred simply because the various company locations did not use the same part number, description, or other identification schemas for the same chemical from site to site. So no one at any site was aware of available inventories at their sister sites. The CEO waved his hand dismissively and said, essentially, that several millions of dollars a year wasn’t worth worrying about. As it turns out, the board of directors fired that particular CEO within just a few months following the meeting. But the aspect of the discussion that struck home with me is that it is far easier to be critical of the work and the ideas of others than it is to produce alternative work and alternative ideas.

With each new election season, the party seeking to oust their opponents to gain control in the White House, Congress, or the United States Senate goes through a very similar process. They focus largely on criticizing the failures and policies of the existing administration, and rarely offer better proposals. And in those rare cases where ideas are brought forward, they rarely survive the election cycle and come into practice.

Recently, in a column called “Why Not a Negative Income Tax” authored by Guy Sorman, the following statement is made: “ Republicans have been winning races again, but with a few important exceptions—Wisconsin congressman Paul Ryan comes to mind—they have done so mostly by running against proposals by liberals in power, rather than by suggesting a coherent alternative agenda. This essentially critical approach contrasts markedly with the 1980s, when the Reagan Revolution worked to implement a rich body of policy ideas developed in advance by many thinkers, including, prominently, the free-market economist Milton Friedman.”

Personally, I am not a big fan of Friedman’s negative income tax” idea. But the point he makes about being critical without being helpful or outlining specifics about how things should be changed has the ring of truth. We need some good ideas, and ideas that survive the election cycle and actually make it into implementation. Simply saying “Those guys don’t know how to govern, so elect me instead” shouldn’t be enough. Yet elections are often determined – not by how much the electorate likes the challenger, but rather by how much they dislike the incumbent. That said, I will fall into that same category to the extent that I feel compelled to point out these examples among the existing proposals made by the Obama Administration for US Federal budget changes:

  • Eliminate US Oil and Gas Company Preferences (including the levying of excise taxes on Gulf of Mexico oil and gas) – thereby further disincentivizing that industry and contributing to the rise in oil prices.
  • Increase tax rates on the most productive members of the US economy. (Reinstate higher tax rates for individuals earning over $200,000 and families earning over $250,000. Phase out personal exemptions for those same categories if US citizens. Impose a 20 percent rate on capital gains and dividends for those same categories of US citizens.) – thereby penalizing individuals and families for working hard and earning more.

In aggregate, according to the Summary tables provided with the Obama Administration’s budget proposal, the overall US budget deficit – which stood at $459 billion in 2009, would rise to $712 billion by 2019, with debt held by the public increasing from the already dangerous level of 41% of our national Gross Domestic Product (GDP) in 2009 to more than 67% of GDP by 2019. This path is not just dangerous, it is reckless, and exposes a wanton disregard for the future of our nation. So what are some of the “New Ideas” that might be proposed? Here are some – some old “new” ideas, and some new “new “ ideas that we might consider:

  • Education: Confer retroactive tuition reimbursement to all bachelor-level college graduates who complete degrees in Science & Engineering fields at accredited state universities. Provide similar funding for non-Science & Engineering curriculum graduates, but at a 50% level. For any student who prefers to select a trade school, confer retroactive tuition reimbursement for the attainment of accredited degrees and certificates to up-to-three-year programs. Eliminate all other US Department of Education programs.
  • Education: Initiate a “Pay-for-Performance” system. Teachers whose students score above 90% on average on nationally accredited and standardized tests (ACT or SAT) receive 50% annual bonuses on their base salary. Teachers whose students score over 80% on average receive a 25% bonus. (Since most high schools divide the student work load into subject matter areas, high schools may elect to aggregate student scores, or assign each of their teachers (at the beginning of the school year) to one of the test subject matter areas and awards would be assigned at year end on that basis.) No weighting based on geography or socioeconomic factors.
  • Education: Initiate school breakfast and lunch programs from K through 8th grade. Nothing fancy – cold cereal and milk and fruit for breakfast, and standard school cafeteria fare for lunch are fine. The fact is that students’ mental processes operate far better when they are nutritionally sound, and many of our kids just aren’t getting the required nutrients at home.
  • Education: Eliminate the Office of Vocational and Adult Education, the Office of Postsecondary Education, the Federal Student Aid division, the White House Initiative on Black Colleges and Universities Staff, the White House Initiative on Tribal Colleges and Universities Staff, The White House Initiative on Asian Americans and Pacific Islanders, the Office of Legislation & Congressional Affairs, the Institute of Education Sciences, the Office of Communications Outreach, the White House Initiative on Educational Excellence for Hispanic Americans, the Office of Innovation & Improvement, the International Affairs Office, and the Center for Faith-Based Community Initiatives.
  • Education: Consolidate the Office of the Chief Information Officer and the Office of Educational Technology. Review the combined office in order to streamline or eliminate it.
  • Education: Eliminate the Office of the Deputy Secretary, the Office of the Inspector General, and the Office of Management.
  • Commerce: Institute an agency that draws on information from the various branches of the Commerce Department, and conducts studies of existing trends in business and trade. Based on this research, the Department will develop projections of future skills and capabilities requirements. Those projections will then be used as the basis for developing curricula for trade schools, colleges, and universities to prepare our graduates entering the workforce to make American businesses more effective competitors in the world market. Thee curricula will be provided at no cost to state colleges, universities, and relevant accredited trade schools.
  • Commerce: Consolidate the Bureau of Economic Analysis (BEA), Bureau of Industry and Security, The Economic Development Administration, the National Telecommunications and Information Administration, the Economics and Statistics Administration. Reduce the combined management staff by about 75%.
  • Commerce: Consolidate the National Institute of Standards and Technology, the National Technical Information Service, and the US Patent and Trademark Office. Reduce the combined management staff by about 75%.
  • Agriculture: Dissolve Foreign Ag Service and create Foreign Agriculture Research and Extension Assistance Program under the new National Institute for Food and Agriculture. Would not involve increasing personnel, just reassigning and incorporating Land Grant staff. Huge personnel budget savings. FAS work is already being done privately.
  • Agriculture: Eliminate the Office of the Chief Economist. Totally symbolic…the Economic Research Service component is more than adequate.
  • Agriculture: Move the nutrition program to Health and Human Services to be administered in block grants to the states. Indiana actually privatized the Food Stamp program and graduated the highest percentage of people off the dole and administered the program at less than half the cost the feds operate. USDA took the program back from Indiana because it was “restrictive”. This would save tens of billions of dollars. Also, the personnel savings in DC and nationwide would be 30% of the USDA administrative budget.
  • Agriculture: Discontinue the Conservation Reserve Program. This is the only program left that takes land out of production and pays an annual lease. About a $5 billion annual savings.
  • Agriculture: Maintain Farm Service Agency, Natural Resources Conservation Service, National Agricultural Statistics Service, Animal, Plant, Health, Inspection Service, and Economic Research Service. Shift Food Safety Inspection Service to FDA.
  • Agriculture: Reduce Under Secretaries and Assistant Secretaries (and corresponding staffs) in accordance with the Agriculture-related recommendations listed above.
  • Health & Human Services: Eliminate the Assistant Secretary for Administration, the Assistant Secretary for Legislation, the Assistant Secretary for Public Affairs, the Assistant Secretary for Planning and Evaluation, the Center for Faith-Based and Neighborhood Partnerships, the Departmental Appeals Board, the Intergovernmental Affairs and Regional Representatives, the Office of Global Health Affairs, the Office of the Inspector General, and the National Coordinator for Health Information Technology.
  • Health & Human Services: Institute separate departments devoted to each of the top three diseases killing Americans today: Heart Diseases, Cancers, and Cerebrovascular diseases. When any one of these diseases is cured or falls in incidence levels from the “Top 3”, (such as the discovery of an effective polio vaccine), that department is dissolved within one calendar year and is replaced with a department devoted to whatever the next highest incidence of fatal disease is at that point. The mission of these departments is to orchestrate an all-out war on the specific disease set that they are targeting. This includes selective research funding, and coordination /dissemination of information regarding the most promising treatments.
  • Homeland Security: Stage 1a – Consolidate the Office of Counterterrorism, the Office of Preparedness / Response / Recovery, and the Office of Cybersecurity. Make management staff reductions as appropriate (target 50%).
  • Homeland Security: Stage 1b -Consolidate the offices of Border Security and Immigration. Increase the staffing of the combined agency as required in order to effectively seal all US borders. Limit total incoming immigration to a maximum of 250,000 individuals per year.
  • Homeland Security: Stage 2 – Fold Homeland Security in under the Department of Defense. Fold the Office of Cybersecurity in under the Defense Intelligence Agency.
  • Defense: Consolidate the US Navy With the US Marine Corps and US Coast Guard, calling the resulting consolidated entity the US Amphibious Corp. Eliminate redundant management levels. Consolidate the US Army with the US Border Patrol and the US National Guard. Eliminate redundant staffing levels. Consolidate the National Aeronautics & Space Administration with the United States Air Force.
  • Housing & Urban Development: Eliminate the Center for Faith-based and Neighborhoods Partnership General Counsel, The Chief Capital Officer, the Chief Information Officer, the Chief Procurement Officer, Community Planning & Development, Congressional / Intergovernmental Relations, Departmental Enforcement Center, Policy Development & Research, Public Affairs, Public & Indian Housing, Small / Disadvantaged Business Utilization, Healthy Homes & Lead Hazard Control, Office of Hearings & Appeals, Office of the Inspector General, Office of Sustainable Housing & Communities, and Field Policy / Management.
  • Housing & Urban Development: Require all newly constructed homes in the United States to provide at least 50% of their rated power requirement through some combination of solar, wind, and/or geothermal sources.
  • Interior: Eliminate the Bureau of Indian Affairs, the Bureau of Land Management, the Bureau of Reclamation, the Bureau of Land Management, the National Park Service. Turn all National Parks and other public lands over to the States in which they reside for management.
  • Justice: Consolidate the Anti-Trust Division, the Bureau of Alchohol, Tobacco and Firearms, The Civil Rights Division, The Civil Division, the Criminal Division, the Drug Enforcement Administration, the National Drug Intelligence Center, the Office of Juvenile Justice, the Office of Sex offender Sentencing, the Office of Tribal Justice, the Executive Office for Organized Crime Drug Enforcement Task Forces, the Tax Division, and the US Marshal’s Office under the Federal Bureau of Investigation. Eliminate about 75% of the combined management staff and all other redundancies identified within the newly combined organization.
  • Justice: Eliminate the Asset Forfeiture Program, the Bureau of Justice Assistance, the Bureau of Justice Statistics, the Community Capacity Development Office, Community Oriented Policing Services office, the Community Relations Service, the Diversion Control Program, the Environment & Natural Resources Division, the Executive Office for Immigration Review, the National Criminal Justice Reference Service, the Office of Tribal Justice, the Office of Victims of Crime, the Bureau of Justice Assistance, the Office of Violence Against Women, the Professional Responsibility Advisory Office, the US Trustee Program, the Office of Privacy & Civil Liberties, the Office of Legal Policy, the Office of Information Policy, the National Institute of Justice, the Office of Intergovernmental and Public Liaison, the Office of Dispute Resolution, and the National Security Division. Any critical tasks remaining from these agencies, bureaus, and offices will be redistributed to other remaining organizations.
  • Justice: Consolidate the National Institute of Corrections, the US Parole Commission, and the Office of the Pardon Attorney under the Federal Bureau of Prisons.
  • Justice: Increase funding to the US Bureau of Prisons by 300% in order to retain prison populations for the duration of sentences passed down from the judicial system and reduce the number of repeat offenders owing to early release of convicts back into the mainstream population.
  • Labor: Eliminate the Administrative Review Board, the Benefits Review Board, the Bureau of International Labor Affairs, the Center for Faith-Based & Neighborhood Partnerships, Employee benefits Security Administration, Employees’ Compensation Appeals Board, Employment & Training Administration, Office of Administrative Law Judges, the Office of Congressional & Intergovernmental Affairs, the Office of the Assistant for Administration & Management, the Office of the Assistant Secretary for Policy, the Office of the Chief Information Officer, the Office of Disability Employment Policy, the Office of Federal Compliance Programs, the Office of Labor-Management Standards, the Office of Public Engagement, Office of the Solicitor, the Ombudsman for Energy Employee Occupational Illness, and the Women’s Bureau. Any critical tasks remaining from these agencies, bureaus, and offices will be redistributed to other remaining organizations.
  • Labor: Replace the features of the existing Unemployment Insurance system with the following features:
    • Upon involuntary termination, full time employees who earned in excess of $35,000 per year will receive 75% of the average weekly wages earned during the previous year and a prescribed level of health insurance benefits will be provided for up to three years. During that period, the beneficiary must enroll in and graduate from an accredited technical school of their choice. Tuition for this education will be funded as a benefit of the unemployment insurance program. Graduates will receive a retroactive payment for the remaining 25% of their prior wages for the previous job. No further benefits will be available from unemployment insurance for 5 years thereafter.
    • Upon involuntary termination, full time employees who earned less than $35,000 per year will receive 100% of the average weekly wages earned during the previous year and a prescribed level of health insurance benefits will be provided for up to three years. During that period, the beneficiary must enroll in and graduate from an accredited technical school of their choice. Tuition for this education will be funded as a benefit of the unemployment insurance program. No further benefits will be available from unemployment insurance for 5 years thereafter.
    • All beneficiaries may obtain employment and opt out of the unemployment insurance benefits program at any time, but will forfeit unemployment insurance eligibility for 2 years following that action.
  • State: Eliminate the Office of Management policy, Office of the Science & Technology Advisor, Office of the Legal Advisor, Bureau of Resource Management, Office of Allowances, Office of Small Disadvantaged Business Utilization, Office of Directives Management, Office of Multi-Media Services, Office of Management Policy, Rightsizing, and Innovation, Office of Commissary and Recreation Affairs (Consolidate under Bureau of Overseas Building Operations), Director of Diplomatic Reception Rooms (Consolidate under Bureau of Overseas Building Operations), Office of Children’s Issues, Office of Medical Services, Office of the Global Aids Coordinator, Bureau of Population, Refugees, & Migration, Bureau of Information Resource Management, Bureau for International Narcotics and Law Enforcement, Bureau of Educational and Cultural Affairs, Bureau of Public Affairs, Bureau of Democracy, Human Rights, & Labor, Bureau of Oceans and international Environmental & Scientific Affairs, Bureau of Verification, Compliance, & Implementation, and the Counselor (Ranking with the Under Secretaries, the “Counselor” is the Secretary’s and the Deputy Secretary’s “special advisor” and consultant on major problems of foreign policy). Any critical tasks remaining from these agencies, bureaus, and offices will be redistributed to other remaining organizations.
  • Transportation: Virtually eliminate the Federal Highway Administration, relegating it to a standards organization for the establishment of civil engineering attributes of roadways, bridges, and other transportation elements.
  • Transportation: Consolidate the federal Motor Carrier Safety Administration, the Federal Railroad Administration, the National Highway Safety Administration, and the Surface Transportation Board under the Federal Transit Administration, and eliminate about 75% of the combined management positions.
  • Transportation: Consolidate the Saint Lawrence Seaway Development Corporation under the Maritime Administration and eliminate 40% of the combined management positions.
  • Transportation: combine the Office of the Inspector General and the Office of the Secretary of Transportation and eliminate 25% of the combined management positions of the new organization.
  • Transportation: Increase funding for the (newly combined) Federal Transit Administration as required to complete high speed rail systems connecting all cities in the continental United States with populations exceeding 500,000 with capability of connecting all designated cities with no more than two intervening stops and a Boston-to-San Diego commute time of not greater than 16 hours.

The consolidations and eliminations listed previously would generate something in the neighborhood of $500 billion in annual savings (see spreadsheet listed below.) The cost of the department funding increases and other investments listed above would be much less than $500 billion. In fact, in the Obama Administration’s 2010 budget proposal, the section describing Department of Transportation requirements says: “To provide Americans a 21st Century transportation system, the Administration proposes a five-year $5 billion high-speed rail State grant program. Building on the $8 billion down payment in the American recovery and reinvestment Act of 2009, the President’s proposal marks a new Federal commitment to give the traveling public a practical and environmentally sustainable alternative to flying or driving. Directed by the States, this investment will lead to the creation of several high-speed rail corridors across the country linking regional population centers.” Even if the savings generated from implementing some subset of these recommendations generated half the projected savings, the mere $250 billion should still do the job.

What do you think?

William Duncan’s Budget Proposal

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