IPI Report Offers 'Real Results' Weight Loss Program for Bulging Federal Budget

2/17/2004

From: Sonia Hoffman of the Institute for Policy Innovation, 703-912-5742 or shoffman@ipi.org

WASHINGTON, Feb. 17 -- Congress is spending at a faster pace than any Congress since before Woodstock. The resulting bulging budget must be trimmed-but how? A new report just released by the Institute for Policy Innovation (IPI) offers a commonsense, 9-step budgetary weight-loss plan. The plan reduces the size of government by more than two-fifths over the next 10 years and costs only $1.5 trillion, as opposed to the current $2.6 trillion budget (scheduled as of 2011).

In "Putting Taxpayers First-A Federal Budget Plan to Benefit the Next Generation of American Taxpayers," IPI Senior Research Fellow Stephen Moore notes how "Washington is hemorrhaging money at the pace that one typically observes only in a bankrupt third world nation.

"In just the past three years the federal budget has exploded in size by more than one half trillion dollars."

Moore suggests countering this spending spree and putting the federal budget on a glidepath toward an unprecedented era of prosperity for American taxpayers by:

1. Eliminating unnecessary and wasteful programs,

2. Privatizing federal assets and using the proceeds for debt retirement,

3. Devolving federal programs like education, transportation and welfare to the states,

4. Replacing all federal anti-poverty programs with a more generous Earned Income Tax Credit (EITC) that requires work as a condition of federal assistance,

5. Using market-based incentives to fix federal entitlement programs,

6. Abolishing all corporate welfare,

7. Enacting legislation to make any American with a net income of more than $1 million a year ineligible for any form of federal aid,

8. Fixing the federal budget rules to end the inherent bias in favor of spending, rather than saving money and cutting taxes, and

9. Attaching a tax cut dividend for all taxpayer to all spending reduction proposals as a way to build a taxpayer constituency for spending cuts.

Such a plan could encounter fierce resistance from the Republican establishment in Washington. Republicans should realize, however, that everything the Federal government does -- every program, every department, every bureaucracy -- must be up for reevaluation if genuine budgetary weight loss is to be achieved.