Commentary: A solution to the fiscal cliff: The Grace Report

Submitted by Mike Ligon





If bandwagon broadcasters had focused on the actual cause of our national financial fiasco — fraud, waste and abuse — rather than the beltway spin of a “fiscal cliff,” sequestration need not have happened.

As an alarmist sound bite fiscal cliff conjures up a precipitous “Thelma-and-Louise” plunge into the Grand Canyon. In reality we’re not approaching a cliff at all.

“Boiling lobster crisis!” just doesn’t have the buzzword pizzazz as “cliff.” Watching a live lobster slowly die in a boiling pot of water is considered a kinder, gentler way to kill the crustacean.

I have to be careful here because I don’t want to give ObamaCare “death boards” ideas.

Think of Congress as the chef, wasteful spending as the water and taxpayers as the lobster. Congress has been slow-boiling taxpayers through special interest pork-barreling for more than 50 years. American “lobsters” continue asking for hotter water by re-electing the chefs. The decision point for the American public — the lobsters — was to refuse to be put in the pot in the first place. Screaming now is an exercise in futility.

We actually hit the bottom of the cliff in 2000.

• The Health and Human Services Department has routinely paid out Social Security benefits to some 8,000 dead people.

• The “off-budget” federal financing bank hides government spending by offering federal agencies a “back door” to the Treasury. What is released to the public is the “on budget” deficit. The actual federal debt is more than double.

• The book Fat City describes 963 federal programs that give money away for nonessential purposes at taxpayers’ expense.

• By making our national defense efficient, we can eliminate at least $100 billion in military waste over three years without costing a single weapons program, dismantling our national defense and without foregoing new weapons systems.

• 42.4 percent of those receiving poverty benefits had total incomes which were 150 percent above the poverty level.

• Under the Freedom of Information Act, the Food and Drug Administration processed 33,000 requests at a cost of $4.5 million. The FDA collected only $231. Eighty percent of the requests were from pharmaceutical companies’ marketing departments researching their competitor … sound familiar?

Congress isn’t ignorant of fiscal solutions — they are ignoring them. In 1984, President Reagan asked registered Democrat, J. Peter Grace, to gather a panel of successful business men to voluntarily identify wasteful government spending. The President’s Private Sector Survey on Cost Control recommended 2,478 ways to cut wasteful spending in 1984.

“The report claimed that if its recommendations were followed, $424 billion could be saved in three years, rising to $1.9 trillion per year by the year 2000. It estimated that the national debt without these reforms, would rise to $13 trillion by the year 2000, while with the reforms they projected it would rise to only $2.5 trillion. Congress ignored the commission’s report. As a result, the debt reached $5.8 trillion (three times the estimate) in the year 2000.

The 1984 report said that one third of all income taxes are consumed by waste and inefficiency in the federal government, and another one-third escapes collection owing to the underground economy.

“With two thirds of everyone’s personal income taxes wasted or not collected, 100 percent of what is collected is absorbed solely by interest on the federal debt and by federal government contributions to transfer payments. In other words, all individual income tax revenues are gone before one nickel is spent on the services taxpayers expect from their government.”

The results were published in Burning Money: The Waste of Your Tax Dollars. Congress acted on 646 recommendations. What is the status of the other 1,842 recommendations? The Grace Commission’s report also warned ominously, “… without eliminating wasteful government spending, the national debt by the year 2000 would jeopardize America’s freedoms and enslave our children with insurmountable debt.” This from a non-partisan, volunteer panel chaired by a Democrat. Like a former Treasury Secretary told presidential candidate Mitt Romney during the 2012 campaign: “It’s all an illusion now. There has been nothing backing the dollar for 10 years.”

Congress can still cut hundreds of billions from wasteful government spending without affecting jobs or benefits — certainly without furloughing anyone. Instead Congress is eating the goose that lays the golden egg. Rather than abdicate constitutional budgetary authority to the president, the House of Representatives should grant the Inspector General’s Office criminal prosecuting authority and fund it sufficiently to ferret out fraud, waste and abuse. They could start with the Grace Commission Report.

In 1984 one congressman replied to the inability of Congress to cut wasteful spending thus: “We have confessed to an already doubting nation that we are ruled by political cowardice rather than economic courage.”

The more things change the more they remain the same.

MIKE LIGONis a Sierra Vista resident since 1994, a former Marine, who joined the U.S. Army and served in Special Forces and retired after 18 years.





Windsor on Sun, 03/17/2013 - 10:26am

The problem is that all you have said is logical. This administration—from
the POTUS, the Senate and the House—do not operate on logic. They operate
for special interest groups and in constant campaign mode. They play on fear
and emotion and the less logical run out and vote for them each time. It is a
problem across the board and as long as the same group of idiots that are
holding those positions remain, the problem will remain. How many years have
we NOT had a budget?

kmhmchiv on Wed, 03/20/2013 - 8:53pm

Interesting how we target the Department of Defense which is, wait for it, a
whopping 3.5% of the GDP (look it up don’t take my word for it) while social
security tips 20%, healthcare entitlements (including Medicaid and Medicare)
tip 21% and welfare tops 13%. Yes, welfare costs over 3.5 times more than the
military that protects us. Instead of asking how we can cut defense, what we
should be asking is why none of our elected officials are interested in
cutting welfare, medical or social security entitlements. The sad truth is
that this is the first time in American history where an elected official
told the American people, I will sacrifice your security, financial future
and our children’s education if you are willing to sell your vote for more
handouts. It is not a popular position, but in the end, someone has to be
honest and tell the American public we simply cannot afford to pay you on
average 25 times what you put into social security, pay for your healthcare
and still survive.

Cassandra on Wed, 03/20/2013 - 9:53pm

KMHMCHIV - somewhere you lost a decimal. 2011’s means tested spending (welfare) amounted to 1.3% of GDP, not 13%.
Also ALL health care spending in the US adds up to 18% of GDP (more than any other country on the planet), so it’s difficult to see how the “entitlement” portion could exceed the total.
Finally defense spending eats up about 4.7% of GDP, which accounts for a little less than half of all the defense spending in the world.
But you are right, this President has sacrificed our security, financial futures and children’s educations by spending historically enormous sums on defense, beating his predecessor’s average bite of the GDP by almost a full percentage point.

Myron Jaworsky on Wed, 03/20/2013 - 10:22pm

REF: knhmchiv, “Interesting how we target…” I may be wrong on this, but I
believe that Social Security’s 20%, healthcare’s 21%, etc., represent gross
amounts. Those percentages fail to take account of the cash contributions,
past and present, levied on individuals paying for, and receiving, the
so-called entitlements. Contribution to the deficit can arise only to the
extent that general governmental obligations (i.e., IOUs like bonds, etc.)
are used to cover the excess of current expenditures over current
contributions, excluding any borrowing resulting from the refunding of
special issue Treasuries held by Social Security and Medicare trust funds.

Myron Jaworsky on Wed, 03/20/2013 - 11:25pm

REF: Ligonis, “Commentary….” Yeah, right. Trot out something from nearly 30
years ago and pretend it still is a good analysis. Reagan? Along with
Clinton, he bears a great deal of the blame for undermining the economy.
Economic analysis? A real analysis would involve estimating what effect the
“wasteful spending” had on producing other economic activity. To do otherwise
assumes that the beneficiaries of “welfare spending” ate or burned the money
they got instead of spending it on food, clothing, rent, cars, etc.,etc. The
level of economics understanding of most of these Republicans is located in
the same time warp that holds re-runs of Happy Days, with the Fonz and Mr.
Cunningham’s hardware store. Why not boosting taxes on companies like GE?
That’s a common link between Obama and Reagan. Essentially GE not only pays
little if any taxes, but gets refunds from the US Treasury while it’s cutting
jobs in the US, while CEO Immelt is advising Obama how to boost US jobs.

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