Fiscal Policy Ashcon Zand Matthew Hess

Lets Get “Fiscal” Pay-go Policy requiring new taxes and entitlements to be budget neutral.

Problems  Budget Deficit  Irresponsible entitlement and legislations

Budget Deficit  The public debt has reached 11.1 trillion dollars  The debt deprives government investments in domestic areas such as infrastructure, education and health care  Problems with international image of the United States

Irresponsible Entitlement and Legislations  Non competitive bidding on federal contracts  Lack of efficiency in government programs  Wasteful funding of obsolete programs

Proposals  Invalidate tax cuts for the wealthy  Government spending accountability  End wasteful spending  Stimulate economy

Invalidate Tax Cuts for Wealthy  Tax cuts for the poor and middle classes will be respected  Cuts for the wealthy will be removed in order to strengthen the economy

Government Spending Accountability  Contracts over $25,000 are to be competitively bid  Efficiency is to be improved through better technology, stronger management, and high volume purchases  Transparency of spending to promote fair practices

End Wasteful Spending  Funding for programs that are financially illogical will be ended  Subsidies for Oil and gas companies will eliminated  The private student loan industry will not have subsidies due to unethical business practices  The Medicare program will be forced to spend less

Stimulate Economy  Put money into economy in order to strengthen it  Obama's $787 billion stimulus bill  $288 billion goes to tax benefits

Politics  Past Failings of Pay-go  Puts restrictions on Congress  Was not put to use in recent budget proposal

Pay-go Failings  Congress had a Pay-go statute from 1991 to 2002, but it was not enforced  Over $700 billion in new entitlement spending and tax cuts enacted in this time period  Budget did achieve balance, but it little to do with Pay-go and mainly because of other factors such as dot com boom  Congress also ignored Pay-go in order to pass $479 billion stimulus bill while  Wide skepticism about new Pay-go statute success

Restrictions On Congress  Congress is restricted from offering tax relief since it wouldn't be able to achieve budget neutrality  Bush tax cuts would have to end  New programs would have to come with cuts in other areas, limiting the creation of new programs  This limits the power of congress

Obama's Budget  Congressional Budget Office estimates Obama's plan will increase the nation's debt by $9.3 trillion over next 10 years  Government expansion of 3% of GDP  Pay-go was given up in order to achieve spending goals

Public View  Public wants to lessen the debt, yet also wants tax cuts  The majority of Interest Groups would not be supportive of a Pay-go bill, since it would restrict the possibility of new programs in their favor