The United States of America is currently plagued by a significant budget deficit. The country has the option of either imposing higher taxes to meet the deficits or reducing spending levels. The challenge with increasing tax is that it weakens incentives, and consequently hinders the economic growth of a nation. The best recommendation is for the federal government to reduce spending. The budget cuts should be made both on the domestic spending as well as the foreign aid spending (Himmelstein & Woolhandler, 2016). As an advisor to the President on budget matters, I present a budget cut recommendation that will avail $300 billion to the Federal government.
Firstly, the government needs to cut foreign aid spending to Africa from $17 billion to $9 billion. The rationale for the cut is that most of the aids to Africa is misused and ends up in private pockets (Edwards, 2019). Thus, the government saves $8 billion.
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Reduce farmers’ subsidies from $14 billion to $10 billion. Most of the subsidy funds go to the middlemen and lobbyists. Thus, the government saves $4 billion.
Cut education subsidy from $62 billion to $46 billion. Eliminate college subsidy for frequent misuse. Thus, the government saves $16 billion.
End tax cuts for income below $250,000 a year. This tax benefits only the rich 2% of the American society (Himmelstein & Woolhandler, 2016). Thus, the government saves $172 billion.
End tax cuts for income above $250,000 a year. Tax cuts for both incomes above and below $250,000 amount to unfairness. They both benefit only the rich, leaving the majority of middle-income individuals with burdens (Himmelstein & Woolhandler, 2016). Thus, the government saves $54 billion.
Cut spending on the Department of Health and Human Services from $87 billion to $60 billion. Medicare is plagued with fraud and abuse of funds. Its expansion and growth be should slowed at the moment (Edwards, 2019). Thus, the government saves $27 billion.
Raise the Social Security retirement age to 68. Americans live longer and lowering the retirement age makes many people spend more time in retirement, raising the federal budget. Thus, the government saves $13 billion.
Increase Medicare eligibility age to 68. This is to harmonize the program with the social security retirement program. Thus, the government saves $8.
The total gap covered by the budget plan is $302 billion.
References
Edwards, C. (2019, March 22). What Federal Spending to Cut? Cato
Institute. https://www.cato.org/blog/what-federal-spending-cut-0
Himmelstein, D. U., & Woolhandler, S. (2016). Public health’s falling share of US health
spending. American Journal of Public Health , 106 (1), 56-57.
