U.S. Representative Judy Biggert (R-IL-13th) today sent her deficit reduction ideas to the special bipartisan committee formed by Congress this August to cut the nation's $14.3 trillion debt. In a letter to the Co-Chairs of the Joint Select Committee on Deficit Reduction, Rep. Jeb Hensarling (R-TX-5th) and Senator Patty Murray (D-WA), she called for bipartisan cooperation on specific revenue and spending changes that would yield hundreds of billions of dollars in savings.
"The Deficit Committee is charged with crafting a plan, but every Member of Congress is responsible for doing his or her part," said Biggert. "Instead of adding to the chorus about what not to cut, I want to offer commonsense ideas that will help the Committee move substantially closer to its goal of $1.2 to $1.5 trillion in savings. Americans deserve a triple-A economy, and these ideas will help us get there."
The full text of the letter follows:
Dear Rep. Hensarling and Senator Murray:
As Co-Chairs of the Joint Select Committee on Deficit Reduction, you face an immense task, and I sincerely hope for your success. The difficult but necessary decisions that are needed to confront our nation's $14.3 debt will not be easy, but I am confident that by working together, we can tackle the out-of-control spending that is draining our economy of confidence, capital, and jobs. Toward that end, I respectfully offer my suggestions, outlined below, on ways the Committee can achieve its goal of identifying $1.2 to $1.5 trillion in deficit reductions by November 23rd.
I urge the Committee, in accomplishing this mammoth task, to work in a bipartisan manner to cut spending to sustainable levels that will restore economic confidence and job growth. Rather than the budget tricks and accounting gimmicks that have plagued previous proposals, these cuts must take the form of enforceable spending controls that provide economic peace-of-mind for American taxpayers. We also should seek revenue increases as the natural byproduct of effective broad-based tax reform and pro-growth financial policies, but we cannot allow the thirst for new revenue sources to become a justification for job-destroying tax hikes during a recession. The task of deficit reduction and job creation are two sides of the same coin, and we must enforce the spending discipline needed to achieve both.
During your deliberations, I also urge you to carefully weigh the suggestions offered by each of the House and Senate Committees with jurisdiction over various federal programs. My suggestions, along with those of other members of the Financial Services and Science, Space, and Technology Committees, have been compiled with great care to provide you with in-depth insight on duplicative or unnecessary areas of government spending that can be eliminated or reformed.
In addition to those deficit solutions identified by Committees on which I serve, I ask that you strongly consider the following priorities:
1. Broad-Based Tax Reform
Broad-based tax reform holds enormous potential to boost U.S. competitiveness, create jobs, and generate revenues through economic growth. By eliminating gimmicks, closing loopholes, and lowering the tax rate, we can create a system that rewards innovation instead of clever accounting. But to accomplish these goals, we have to enact a tax policy guided by sound economic principles, and not simply increase taxes on job creators and investments.
Currently, the sheer complexity of our tax code leads to billions in lost revenue. It also drains billions of dollars each year from our economy in the form of costs associated with tax preparation and enforcement. A 2005 government study estimates those costs to be $150 billion annually. I encourage the Committee to adopt reforms that would streamline, simplify, and lower the tax burden on U.S. families and job creators.
2. End Ethanol Subsidies
The $.45 cents per gallon ethanol tax credit results in duplicative taxpayer support to an industry that already benefits from statutory fuel blending requirements. In previous years, ethanol supports were appropriate to help the industry to gain a foothold in a competitive environment, increase refining capacity, and encourage research and development on non-corn-based cellulosic fuels. Studies by the Government Accountability Office show that these goals have been achieved, and the time has come to end a tax credit that will cost taxpayers $6.75 billion a year by 2015.
3. Shed Surplus Properties
The federal government currently owns and controls vast swaths of land, numerous industrial facilities, and over 55,000 underutilized buildings. According to the Heritage Foundation, the sale of these non-critical assets would yield approximately $260 billion over 15 years. Selling even a small percentage of these properties would raise billions up front and save millions more in maintenance costs.
4. Repeal Farm Subsidies
According to the Congressional Budget Office (CBO), direct payments to farmers of certain commodities are expected to exceed $51 billion over the next ten years. These bloated subsidies distort the food market, raise prices for consumers, and generate international trade conflicts that adversely impact U.S. job creators.
5. Advanced Research Projects Agency (ARPA-E)
ARPA-E is a costly and duplicative energy agency that first received funding through the 2009 stimulus. While charged with pursuing "innovative and transformational" energy projects, this new federal bureaucracy is an unfortunate distraction from existing efforts at the Department of Energy's Office of Science. In addition, many of the recipients of ARPA-E funding have already received private venture capital financing, demonstrating that taxpayer funding is not necessary. Cutting ARPA-E would save $100 million in 2012.
6. Medical Malpractice Reform
According to the CBO, mandatory spending on federal health programs could be reduced by approximately $50 billion from 2012 to 2021 through common-sense medical malpractice reform. This savings would be achieved by reducing malpractice-related costs within Medicare, Medicaid, the Children's Health Insurance Program, federal employee health benefits, and the health insurance exchanges proposed under the Administration's 2010 health bill. Savings through discretionary spending would contribute an additional $400 million from 2012--2016 and $1.6 billion from 2012--2021.
I am a cosponsor of legislation, H.R. 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011, that would enact just such reforms. Changes included in this legislation would not only result in federal savings, they would reduce nuisance lawsuits that drive up health costs for consumers, promote defensive medicine, and adversely impact the availability of quality care.
7. Repatriation of U.S. Profits
U.S.-based corporations with foreign subsidiaries generally pay no U.S. taxes on their foreign income until it is "repatriated," or sent back to the parent corporation from abroad.
A tax holiday would encourage U.S. corporations to repatriate foreign capital and pay taxes on an estimated $1 trillion in profits currently locked overseas. One proposal, H.R. 1834, would temporarily lower the corporate income tax rate on such assets from 35% to 5%. This tax holiday would encourage corporations to immediately bring home profits, generating billions in immediate tax revenue and resulting in a flood of new domestic capital that can be utilized for job creation here in America.
Again, thank you for your service on the Joint Select Committee for Deficit Reduction. While I do not envy the task in front of you, I hope that these suggestions provide a roadmap for common-sense spending cuts that can jumpstart a healthy fiscal future for our country.
Member of Congress