Americans want lower deficits and more economic growth; that much is clear. The problems arise when we leave it to lawmakers to agree on policies to achieve those goals. Republicans oppose new taxes, while Democrats abhor cuts to entitlement spending. Even the sequester, which included minimal cuts off a growth budget of eight percent for defense spending and five percent for other spending, was passed with great opposition.
Fortunately, there are common-sense policies that would spur economic growth if political leaders would put aside their partisanship and compromise for the good of the country. Here’s my advice for five simple ways to cut spending or add revenue sources, and jumpstart economic growth:
1. Cut Medicare and Medicaid spending. Lawmakers should encourage competition between U.S. pricing and international pricing for drugs. Americans are now the chumps pay the highest price in the world. With competition, pharmaceutical companies will lower the prices of drugs in the U.S.
To cut costs, doctors should be reimbursed based on procedures, not based on a percentage of drug costs or tests performed. To reduce end-of-life procedures for the terminally ill, Americans should be asked to state their end-of-life wishes when they renew their driver’s licenses. This could help ill patients who, if conscious, might say they want compassion and pain relief rather than uncomfortable and ineffective treatments.
2. Stop the war on drugs. Like Prohibition before it, the war on drugs has failed. An innovator doesn’t insist on repeating the same mistakes he’s already made; he learns from them and pursues new tactics with a higher likelihood of success.
Legalizing and taxing marijuana would not only generate new revenue, but it would also curb our spending on overcrowded jails. State lawmakers in Washington are hoping for hundreds of millions of dollars a year in new tax revenue because of a now-legal pot market. For many of the unemployed, legalizing marijuana would also create new job opportunities.
3. Give Green Cards to the best and brightest. Those who receive advanced science, technology, engineering and math (STEM) degrees in our universities should be encouraged to stay here. The world’s brightest people help our best companies create new ventures and train others. If they can stay in the U.S., they will help our economy, create jobs and generate new tax revenue.
4. Require those getting unemployment benefits to volunteer. Research shows the longer unemployment benefits are given, the longer the jobless stay jobless. Instead of incentivizing the jobless to find work, we continue to pay them benefits. If we simply require the unemployed to volunteer 20 hours a week at a non-profit, the unemployment rolls would drop and those volunteering would develop skills and create job networks.
5. Allow companies to bring back foreign profits. American companies have parked more than a trillion dollars overseas because the money was made abroad and has been taxed by another country. The U.S. uniquely taxes it again and does so at one of the highest corporate tax rates in the developed world. If we want to jump-start the economy, jobs, and thus tax revenue, companies should be allowed to return their profits at a lower rate (say, 10 percent) if at least half the money is spent on new U.S. jobs or capital investment.
To cut our deficit and jump-start our economy, we need creative, bipartisan thinking. By adopting ideas like these, we can begin to meet sequestration goals without raising taxes or cutting entitlements. These are common-sense solutions that will help our nation balance the budget and put the U.S. back on the path to prosperity