Initiatives for Restoring Fiscal Responsibility

Local and state leaders like Chris Coons face tough budget choices, as they weigh the need to balance budgets while also preserving vital government services like public safety, education, health care and housing against dwindling revenues. 

Yet, Washington politicians have refused to make tough choices and continue to pass debt on to future generations.  This runaway debt is a threat to both our economic and national security.

As Delaware’s next Senator, Chris Coons will make the tough but necessary choices to restore accountability and fiscal responsibility to the federal budget. He applauds Congress’ decision to enforce Pay-As-You-Go rules, which require that new spending measures be offset in the budget by other funds. Chris will fight to ensure that these rules continue moving forward.

Chris believes that tackling the projected $1.4 trillion federal budget deficit takes leaders willing to scrub all areas of the federal budget and make hard decisions.  As Delaware’s next Senator, Chris will look at ideas large and small, Republican or Democratic, to fix the budget mess in Washington, including:

• End Tax Breaks for Companies that Ship Jobs Overseas.  Current law allows companies to defer paying taxes on their overseas income indefinitely while deducting many of the expenses associated with moving offshore, providing a double subsidy to U.S. companies that ship work overseas and effectively penalizing companies that keep jobs in the U.S. Ending overseas tax breaks would generate an additional $7 to $12 billion a year in tax revenue and eliminate the misguided incentive to move work abroad.

• Close the Tax Gap. The tax gap is currently estimated at $300 billion, with the biggest reason for the gap being underreporting of income. Simplifying tax forms and tax law, reducing opportunities for evasion, targeting sources of noncompliance, improving and increasing enforcement of tax laws, and renewing our commitment to taxpayer service can reduce the gap between taxes owed and taxes collected. The Affordable Care Act has begun to address the problem, and at the beginning of 2012, the IRS will mandate that all taxpayers with business income will face stricter reporting requirements. However, there is still more work to be done to close the tax gap. Congress’ Joint Committee on Taxation estimates that this new action will only bring in $2 billion a year in new tax revenue.

• High-Income Bush Tax Cuts Should Expire on Schedule.  Allowing the Bush tax cuts for the wealthiest households – the top 2% making more than $250,000 – to expire on schedule at the end of 2010 will save $443 billion over 10 years.  The Bush tax cuts were not offset when they were pushed through Congress via reconciliation in 2001 and 2003, and they have irresponsibly increased the federal deficit.     

• End Tax Breaks for Big Oil and Gas.  The oil and gas industry made $67 billion in profits in 2009.  Closing tax breaks for the oil and gas industries will generate $36.5 billion over the next ten years.  We could directly apply this savings – nearly $4 billion a year – to the deficit or use the savings to increase our investment in alternative energy.

• Cut Congressional Salaries. Members of Congress need to be part of the budget solution, not the problem.  They should not take pay raises while federal deficits grow to record levels.  Cutting Senate and House Members’ salaries by 10% would save taxpayers $9.2 million a year.

• Adopt the Defense Secretary’s Recommendations. Secretary of Defense Robert Gates released a plan to save $100 billion in Pentagon spending over the next five years. The Secretary's plan puts defense money where we need it, strengthening our national security and ensuring that our military remains strong after years of war. The plan cuts spending on contractors, reduces staff, consolidates headquarters and invests in force structure and modernized weapons like unmanned drones. According to the nonpartisan Congressional Research Service, Secretary Gates’ plan to reduce spending on contractors will save $5.4 million between fiscal years 2011 and 2013, if extended, it could save $12.6 billion through fiscal year 2015.

• Cancel the Joint Strike Fighter (F-35) Alternate Engine Program. Presidents Obama and G.W. Bush both requested cancellation of the alternate engine research and development (F136 engine) program for the F-35 Joint Strike Fighters.  The F136 engine program was established at the beginning of the research and development of the new fighter system as a way to spur competition and ensure that one of the two awarded engine programs would be successful.  The Administration feels that the alternate engine program is no longer necessary and cancelling it would have saved $438.9 million in FY10.  Congressional leaders need to stop adding the program back into the budget.

• Eliminate Funding for the C-17 Transport. The Pentagon has repeatedly stated that it has no need for additional C-17 transports.  Eliminating funding for additional C-17s, as requested by President Obama and Secretary of Defense Robert Gates, is consistent with Pentagon assessments and allows the military to focus on modernizing the C-5, which is cheaper to maintain and have the capacity for a longer life than the C-17.  Ending the program would result in a one-year savings of $400 million and a five-year savings of $2 billion. 

• Eliminate the Osprey Program.  The Osprey (CV-22/MV-22) helicopter program has been expensive and controversial for nearly 20 years.  Following the aircraft’s first combat deployments in Iraq and Afghanistan, the reviews remain mixed at best.  In 2009, the Government Accounting Office (GAO) reported that the cost per flying hour for the MV-22 is more than $11,000, which is more than double the target estimate for the MV-22. Although the aircraft demonstrated that it can be successful in low-threat environments in its late deployment to Iraq, “challenges may limit its ability to accomplish the full repertoire of missions of the legacy helicopters it is replacing.”  The Sustainable Defense Task Force, a bipartisan commission started by Reps. Barney Frank, Walter B. Jones, Ron Paul and Senator Ron Wyden, recommended eliminating the program and estimated savings to be between $10 billion and $12 billion over ten years.

• Suspend the Acquisition of New Federal Office Space.  As the size of the federal workforce shrinks, there is no need to continue purchasing or leasing new federal office space.  Placing an immediate hold on the government’s acquisition of new office space, as well as surveying existing space that can be eliminated due to expected declines in the federal workforce, can save an estimated $4 billion over 10 years. 

• Reform Agriculture Department Subsidies and Programs that Send Taxpayer Dollars to Large, Corporate Agri-businesses.  Reforming the milk marketing orders program and deregulating milk pricing would result in a one-year savings of $1.15 billion and a five-year savings of $5.75 billion. Agricultural subsidies such as this were meant to support agri-business, supplement farmers’ income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities.

We cannot forget that the Affordable Care Act, our new health care reform law, as the Congressional Budget Office predicted, will reduce the deficit by $143 billion over the next ten years, and by $1.2 trillion more over the following decade. 

I applaud the President for his executive order to create the Debt Commission, set forth with the mission to reduce the U.S. deficit to within 3 percent of gross domestic product by 2015. I look forward to learning about and implementing the recommendations from this 18-member, bipartisan commission.

In government and in business, it is hard to truly understand a budget until you see it from the inside.  Above are some of my ideas of ways we can help get our federal budget under control.  This list is the beginning of the conversation, not the end.  As this list shows, we can do better.  It’s time to start trying.