Libertarian Congressional Candidates Release Joint Proposal to Balance Federal Budget by 2012

A press release from Travis Irvine, Libertarian candidate for US House in Ohio's 12th district, emailed to TPID:

In an effort to give voters a real alternative to the big-spending politics of the Democratic and Republican parties, two Libertarian candidates for the U.S. House of Representatives have developed a federal budget that completely eliminates the federal budget deficit in one year.

Travis Irvine, the Libertarian candidate in Ohio’s 12th District, teamed up with Mark Grannis, the Libertarian candidate in Maryland’s 8th District, to produce the budget for fiscal year 2012 (the fiscal year that begins October 1, 2011, and the first fiscal year for which the next Congress will prepare a budget).

The Libertarian Balanced Federal Budget Proposal relies on a mix of spending cuts and revenue increases, though it increases revenue by eliminating tax loopholes rather than changing tax rates.  The proposal balances the budget despite keeping 2010 tax rates in place for all taxpayers.

Watch an introduction of the budget here: http://www.youtube.com/watch?v=nHXfh-3k3f4

“It’s one thing to talk about budget problems, but it’s another thing to go out and come up with solutions,” Irvine said. “I challenge Republicans and Democrats to give voters these type of specifics about how they would balance the federal budget.”

The budget also proposes no changes to Social Security or Medicare, and only one modest change to Medicaid: capping block grants to the states at 2010 funding levels and giving states greater responsibility for funding their Medicaid policy choices in the future. Irvine and Grannis both support more comprehensive entitlement reforms, but their aim was to show that the federal budget could be brought into balance without injecting those issues into the budget process.

Under the Libertarians’ budget proposal, federal spending in 2012 would decline by $991 billion from the levels set forth in the President’s 2011 Budget.  The President’s Budget requested total spending of $3,833,861,000,000 for 2011, a figure that remains only a request because Congress decided not to bother passing a 2011 budget.  Under the Libertarian Balanced Federal Budget Proposal, spending would decline from $3.834 trillion to $2.843 trillion.

The President’s 2011 Budget also included the Office of Management and Budget’s estimate of what spending levels would look like for 2012.  When compared to those levels rather than the 2011 levels, the Libertarian Balanced Federal Budget represents spending reductions of roughly $912 billion.  The major spending cuts are described in the summary that accompanies this release, but some of the most significant items are:

•    Spending cuts of more than $150 billion in the Department of Defense;
•    Spending cuts of more than $100 billion each in the Departments of Agriculture and Health and Human Services ;
•    Spending cuts of more than $80 billion each in the Departments of Education and Transportation (including elimination of the Department of Education);
•    Spending cuts of more than $40 billion each in the Departments of Housing and Urban Development (which is also proposed for elimination) and Transportation;
•    Meaningful cuts in every other federal agency, including tens of billions of dollars each in the Departments of Energy, Homeland Security, Justice, Labor, and NASA.
•    Elimination of approximately $20 billion in non-Medicaid block grants to state and local governments.
•    Privatization of government programs that previously cost over $26 billion, including Amtrak, the Postal Service, the Federal Aviation Administration, and the Transportation Safety Administration.
•    An end to the federal “War on Drugs,” saving over $16 billion for the federal government and much more for state and local governments.
•    Elimination of “corporate welfare” spending of over $12 billion; and
•    A 5%, across-the-board spending cut for all remaining federal spending.

On the revenue side, the Libertarians’ budget proposal extends the tax rates currently in effect for all individuals regardless of income, but eliminates or phases out various tax credits, tax preferences, subsidies, and other loopholes worth more than $7 trillion over the next ten years. 

These tax gimmicks benefit some people but not others in much the same way that government spending does, and have grown significantly since 1986, recently being recognized as a major source of Washington’s budget problem.  Elimination of “tax expenditures” will generate approximately $414 billion in additional revenue in 2012, with the amount of additional revenue growing somewhat in later years. 

Even with $1 trillion in spending cuts and more than $400 billion in new revenue from the elimination of “tax expenditures,” the budget for fiscal year 2012 still would not balance without one last item:  sale of approximately 22.5% of federal gold reserves. Irvine and Grannis propose to have the U.S. Mint sell half-ounce deficit-reduction coins to U.S. citizens in much the same way the government once sold war bonds.  They project approximately $108 billion in additional 2012 revenue from this one-time sale of gold reserves.  The $108 billion in revenue would be replaced in 2013 as the continued phase-out of certain tax expenditures generates additional revenue that could not be raised in 2012 without even more drastic budgetary changes.  

In a video released to announce the budget, Irvine and Grannis invite other candidates to sign onto their plan, which is available on their respective websites, www.IrvineForCongress.org and www.GrannisForCongress.org.  They also urge voters in districts across the country to insist that their candidates for office either embrace this plan or develop an equally specific plan of their own that sets forth exactly when and how each candidate plans to balance the federal budget.