In the 3rd post of this series, we're going to construct a detailed level of what the U.S. will spend on. Any department that is not explicitly mentioned has been intentionally omitted.
For starters, let's evaluate where we're coming from.
In FY 2011, the United States spent 3.6 Trillion Dollars, or about 23% of GDP. The budget I've outlined projects spending levels just over 2.95 Trillion Dollars; about 19% of GDP.
Let's start breaking the budget down by department.
National Health Administration
As I've hinted at in prior posts, the United States' health outcomes are sub-optimal. The United States spends about 50% more per capita on health care than any other nation. Even with poor US personal health habits (discussed in the preceding link), one would think that the high spending levels would put the United States amongst the world leaders in life expectancy. According to the CIA 2011 fact book, the United States presently ranks 50th in life expectancy for newborns.
The National Health Administration would be a single payer health system that would operate similar to Canada or Great Britain's; largely composed of current doctors/health care professionals. We won't focus as much on the details as we will the concept - but based on current health care outcomes and satisfaction rates of members of the citizens of the US, Canada and Great Britain, a change is clearly in order.
Spending and budget levels would be equivalent to 1/6 of the median wage multiplied by the current population and would come in at about 1.36 Trillion dollars. The NHA would house the Center for Disease Control and Food/Drug Administration. Under this proposal, no American would receive a health care bill ever again (though I'd be misleading if I omitted the fact that taxes will be paying for it). Non-citizens would not be eligible for treatment from the NHA unless they were paying the bill out of pocket, or had proof of international insurance, or there was an agreement with a foreign government to pay the bill.
Social Security
As discussed at length in parts 1 and 2, the biggest financial risk to middle class Americans who have saved at reasonable levels is health care - the top link in the NHA discussion exposed why - the U.S. spends significantly more than any nation on health care per capita and has a higher proportion of that spending financed by the private sector than any OECD country. Given that the U.S. Government presently foots the bill for lower income citizens, this leaves the middle class at risk. The NHA eliminates that risk but has a heavy price; that price must be compensated for by reducing spending in other areas; the Social Security system is one of those systems.
The new Social Security System will work as follows:
Upon birth or admission to the U.S. as an immigrant, each U.S. Citizen will receive a credit equal to 1/6th of their remaining life expectancy - expressed in months. With present life expectancy rates, this comes out to about 13 years. If a citizen is enrolled full time in a trade school, college or university, at age 18 they will be eligible to draw on their Social Security credits. If not, they will be eligible to draw on their credits at age 21.
The credits would be tradeable in the open market - individuals could theoretically sell their social security credits in order to purchase a house, or buy social security credits to establish a long term pension for themselves if they were more risk averse. Social Security recipients would NOT be taxed on their Social Security receipts. Citizens would have to draw on the credit at the 1st of each month, and would receive a check for 40% of the median monthly wage immediately. Once a person's credits were gone, they would be gone however - and survivor's benefits would not exist; the credits would be tied to a specific person.
The 800 pound elephant in the room is what about those currently on Social Security? Each existing U.S. Citizen would instantly get about 13 years worth of credits; meaning that everyone presently on Social Security would have the option (this protects senior citizens) to draw on their Social Security credits.
Social Security spending would average out to about $550 billion in present spending.
Defense
The Department of Defense budget would be set at $425 billion. This represents a reduction of nearly $300 billion. However, exploring the above link, one can observe that in real spending relative to the last 50 years, that the $425 billion figure is more typical than the amount spent on defense by the present administration. This spending figure is higher than all but one year in the 1970's and is higher than defense spending levels in 1982 - when Ronald Reagan was President. All figures above are adjusted for inflation.
Congress would not appropriate specific spending funds; the DOD would set the budget for the various departments of the Armed Forces and then the Departments themselves would appropriate budgets as they saw fit. The only caveat is that U.S. Military bases in OECD nations would be shut down immediately - or the host country could volunteer to make payments to the soldiers manning them and pay for upkeep of the base and operations of the base. NASA would be transferred to the Air Force which would be renamed Air/Space Force.
This would effectively end United States subsidies to other nations' defense forces.
Discretionary Spending
Each Department will be touched on briefly with a quick explanation of it's mission. If you're interested in how the levels compare to present levels this link has a very detailed outline.
Child Care Program: The legal guardian of each child will receive a payment equal to 4% of the median wage. This would represent a current spending level of about $75 billion.
Veterans Affairs: The NHA eliminates most of the need for this department. This department's new mission would be to establish cooperative ventures with universities and businesses to help our soldiers successfully transition from the military workforce to the civilian workforce after their service to our country has ended. It would also include helping soldiers cope psychologically with the shift from military to civilian life, provide counseling for family members who had lost loved ones and provide a help center if veterans had questions or issues regarding benefits due.
Spending level: $10 billion.
Office of Personnel Management
This would have a budget of $20 billion and it's responsibilities would include administering pension payments and serve as a global human resources organization for non-defense oriented administrations.
Economic Analysis
This would have an operating budget of $3 billion and an effective budget of $30 billion.
It would serve a dual role. The first role would be regarding statistical/projections. It would replace the CBO.
The second role would be regarding economic development. State and local agencies would submit proposals for development that the Federal Government would share 1/3 of the cost in. It would be evaluated by the economic analysis department and projects with the highest projected ROI would be approved. This opens up holes for corruption and any suspicion of corruption would be dealt with very harshly - penalties along the lines of 25 years in prison.
Energy and Environment
These two administrations would be combined and given an operating budget of $3 billion with a total $30 billion budget. The remainder would be used to invest in renewable energy sources.
Department of State
A budget of $30 billion would be allotted and would absorb the Department of the Interior. It would re-orient it's self to create and re-invent a smooth immigration process; this would be it's top mission. This is a slight increase to it's budget - because it's primary responsibility would now be a large one.
Department of Treasury (includes national debt - about $200 Billion)
The budget would be $300 Billion. In part 4, we'll discuss why the size of the IRS would shrink.
Department of Transportation
This budget would be $100 Billion. 12.5% of it's budget would be similar to the Economic Analysis Department; the Federal Government would chip in on state and local transportation projects - those projects would be evaluated on ROI, with preference given to projects that do not utilize petroleum consuming vehicles. This is one of the few departments to receive an increase to it's budget.
Justice Department
The Justice Department would be the watchdog for the Energy & Environment, the DOT and the Economic Analysis departments.
With marijuana legalized (see part 2), the Justice Department would focus less on drugs and more on federal crime - specifically fraud prevention.
Budget level: $15 Billion.
Legislative + Executive Office of the President:
A budget of $4 Billion would be allotted.
Part 4 will discuss Federal Revenues.
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