By Mitt Romney
I spent much of my 25-year career in the private sector turning around failing enterprises. With a great team behind me, I helped to turn around the Salt Lake City Olympic Games, and fix a badly broken state budget in Massachusetts. But I have never seen an enterprise as large, as poorly led, and as badly in need of a turnaround as our federal government.
President Obama inherited a severely imbalanced budget, and he made it much worse. Many now question whether we can ever return to fiscal sanity, let alone fiscal strength. A point of no return may well be approaching -- a decade of huge deficits could drive our principal payments and interest rates beyond our reach while starving the economy of the capital it needs to grow.
We can still correct course because our economy retains tremendous capacity for growth. As president, I will bring to Washington the turnaround philosophy it so badly needs.
Any turnaround must begin with clear and realistic goals. By the end of my first term, I will bring federal spending as a share of GDP down from last year's staggering 24.3% to 20% or below. This level is in line with the historical average and nears the tax revenue our economy generates when healthy. With economic growth of 4% a year, meeting this goal will require approximately $500 billion of spending cuts in 2016, and that would still allow us to undo the Obama administration's irresponsible defense cuts.
There are three ways to reduce spending, which combined, will achieve a fiscal turnaround of this size.
First, eliminate every government program that is not absolutely essential. There are many things government does that we may like but that we do not need. The test should be this: "Is this program so critical that it is worth borrowing money to pay for it?" The federal government should stop doing things we don't need or can't afford. For example:
*Repeal ObamaCare, which would save $95 billion in 2016.
*Eliminate subsidies for the unprofitable Amtrak, saving $1.6 billion a year.
*Enact deep reductions in the subsidies for the National Endowment for the Arts, the National Endowment for the Humanities, the Corporation for Public Broadcasting and the Legal Services Corporation.
*Eliminate Title X family planning programs benefiting abortion groups like Planned Parenthood.
*End foreign aid to countries that oppose America's interests.
Second, return federal programs to the states where innovation, cost management and reduction of fraud and abuse can far exceed what Washington achieves. I will block grant Medicaid and workforce training, saving well over $100 billion in 2016.
Third, sharply improve the productivity and efficiency of the federal government itself. Where we do want the federal government to act, it must do a better job. For instance:
*Reduce the federal workforce through attrition and align compensation with the private sector, saving over $40 billion by 2016.
*Repeal the Davis-Bacon Act, a union giveaway that artificially raises costs for government projects, and save taxpayers more than $10 billion a year in the process.
*Attack rampant fraud in government programs by enacting far stiffer penalties for those who steal from taxpayers. Cutting improper payments in half could save more than $60 billion a year.
*Consolidate, eliminate and streamline federal departments, agencies and offices following a stem-to-stern review.
These three approaches, applied systematically throughout government, will produce a fiscal turnaround. But that achievement will be short-lived if we do not also ensure that both Medicare and Social Security are made sustainable for future generations. Reforms should not affect current seniors or those near retirement, and tax hikes should be off the table. However, the retirement age for younger workers should be increased slowly to keep up with increases in longevity. And Social Security benefits for higher income recipients should grow at a slower rate than for those with lower incomes.
Tomorrow's Medicare should give beneficiaries a generous defined contribution and allow them to choose between private plans and traditional Medicare. And lower-income future retirees should receive the most assistance. I believe that competition will improve Medicare and the coverage that seniors receive.
What I propose will not be easy. Washington is full of sacred cows that supposedly can't be slaughtered and electrified third rails that allegedly can't be touched. But if we do not act now, the irresistible mathematics of debt will soon lead to unimaginable peril. With the downgrade of America's credit rating, we've gotten a taste of that bitter reality as we see the full potential of fiscal disaster playing out across Europe. We must turn around while we can.
Mitt Romney, a former governor of Massachusetts, is seeking the Republican nomination for president.