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September 16, 2011

How To Cut $1.4 Trillion Over 10 Years In 58 Easy Steps

Okay, so "easy" is relative in politics but at least freshman Senator Ron Johnson (R-WI, The Guy Who Beat Russ Feingold) is trying. He had his staff comb through a bunch of cost cutting commission reports and came up with some of their own to create a list of cuts from large to small that totals up to some real money.

I can't vouch for how great an idea each is or the practicality of enacting them all. But it seems like exactly the kind of plan you'd expect from a guy who built his career in the exciting world of "producing plastic sheet for packaging and printing applications", nothing flashy, just practical and useful.

A few of my favorites (pdf).

Cut workforce by 10% by 2015 (through attrition); freeze pay for civilian employees through 2015.

$248,000,000,000 saved.

American taxpayers deserve a leaner, more efficient government, but the federal workforce has ballooned to over 2,137,000, adding 175,000 positions since President Obama took office. Federal workers enjoy 30% to 40% greater total compensation (in wages and benefits) than a comparable private sector worker. The Office of Personnel Management projects that about 400,000 federal employees are currently eligible for retirement.1 (National Commission on Fiscal Responsibility and Reform; the House budget resolution)


Require employees to match federal contributions to FERS Defined Benefit Plan.

$133,270,000,000 saved.

Currently, members of the federal workforce pay $1 for every $14 the federal government contributes toward the defined benefit portion of the FERS program. Social Security and the Thrift Savings Plan both operate on some version of a direct matching formula. Most federal employees contribute 0.8% of their base pay while the government pays 11.7% — a percentage to increase in October 2011 to 11.9%. Special categories including Members of Congress and their staff receive an even higher percentage of pay toward their basic benefit plan. This cut would institute a dollar-for-dollar match at the 7% level.4 (Suggestion comes from the think tank Third Way)


Phase out FERS Basic Benefit Plan.

$75,000,000,000 saved.

The Federal Employees Retirement System Basic Benefit plan is no longer comparable to private sector retirement plans that afford greater flexibility and cost savings through 401(k) and stock option plans. As the Civil Service Retirement System was replaced by a more modern plan in 1983, current FERS can be closed off to new entrants, realizing savings immediately. The Public-Private Employee Retirement Parity Act of 2011 sponsored by Sen. Richard Burr (R-NC) and co-sponsored by Sen. Ron Johnson (R-WI) would close off eligibility to participate in FERS to new federal employees.5 (Suggestion comes from Sen. Coburn’s Back in Black).

There are some other smaller programs and a couple I don't think would or should fly, like conducting the Census online, but I really like these big ticket personnel and benefit reforms. It's the kind of stuff we're seeing across the country at the state level and it's about time the wave hit the federal government. If Chris Christie can do this kind of thing in New Jersey there's no reason, other than the fact that the current President is the pocket of the unions, not to do it at the federal level.

I'm also leery of quick fixes that don't address the real big ticket items like Medicare and Social Security but Johnson makes it clear his proposals are just a start. This is simply a set of proposal that shouldn't need a Super Committee to enact. It also shows you can get to the magic $1.4 trillion without gutting defense.

But hey, since we're so deep in the Doom, we could use these ideas PLUS whatever the Gang of 12 comes up with AND real entitlement reform.

I have to admit I'm a big fan of Ron Johnson and have been from early on. He was a guy who ran a successful business, got involved with the local tea party group and stepped up to run when no one else would. If Rick Perry does get the GOP nomination, he could do worse than Johnson as a running mate. I know Marco Rubio is everyone's first choice (and for good reason) but I think Johnson would bring a lot to the table (business experience, he's not flashy but Perry brings enough of that to the ticket and oh yeah...Wisconsin and the Midwest). Just something to think about for now.

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posted by DrewM. at 10:01 AM

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