Fixing the Nation

In his incredibly insightful article, “On the ecology of micromotives”. Tom Schelling taught us that humans sometimes do need to put the alarm clock across the room to make sure we get up in the morning. Government is no different. Nothing in what follows is political, though some winners and losers may attempt to make it so. This is all about process and efficiency. The tax system can be as progressive as our leaders decide. We can run a deficit of any size. It does reflect a deep-seated belief in transparency and competition as the means of driving efficiency. Together these ten themes make our government but, more importantly, our country more competitive and efficient.

1. Get the Federal government back to Federal. Limit the number of individual line-item appropriations Congress may make in any consecutive twelve months to 10,000. Exceptions may be made at the request of the president by a two-thirds vote in each house. As a side benefit lobbying Congress makes little sense so Congress should become less attractive to monied interests.

2. Make Congress competitive. Require that all districts for election of members of the House of Representatives be compact and contiguous. Make all primaries for election of members of the House or Senate open as do California and Washington.

3. Separate the Amount of Spending from What. We need to make the budget resolution binding in a way a statute can never be. Possible language is below. It is good idea that needs constitutional stature. We overspend because individual items seem affordable at the instant. As Everett Dirksen said decades ago, “ A billion here. A billion there. It adds up to real money.” Possible language is below.

4. Reform the tax system. Go back to Reagan’s original intent: have a single flat rate for all income above a generous exemption. For fairness and simplicity integrate with the current payroll tax. Treat all income the same regardless of source. Any tax break for any other reason counts as a line-item appropriation and is accounted for as such in the budget. There are winners and losers from all this but they are surprising to many. The top loses because they pay less now due to capital gains and carried interest. High-cost of living states and second-earners win. Low income win from integration with Social Security. Most of all, society wins. A progressive tax system makes lobbying valuable. Fact. Address inequality by taxing incomes above $5 million 10% on the excess to $50 million, incomes above $50 million 20% on the excess to $500 million and incomes above $500 million 30% on the excess.

5. Make the Legislative Process Transparent. Congress simply cannot be trusted to establish its own rules and procedures. Its obscure and arcane workings enable special interests to subvert the national good. The provisions are detailed but worthwhile. See below.

7. Make the U.S. globally competitive. Enact a simple flat rate income tax on all corporate income worldwide but reduce that tax by the percentage of its revenues earned outside the United States.

8. Make Healthcare Competitive. Use competition to drive down healthcare costs by making the market work again: every provider of healthcare services is free to set any price for any service, but the same price must be charged to all regardless of payment method. Medicare may cost more, but the uninsured will pay far less, and it gets the system focused on healthcare and not on the payment trail. Most of the benefits of a single-payer system can be achieved with few of the negatives.

9. Enact a Job Creation Credit. The most important tax stimulus enacted under President Kennedy was James Tobin’s Investment Tax Credit. We need jobs. We need to grant businesses a refundable tax credit for each new permanent job with full benefits. This should ramp down over four years.

9. Fix Social Security. Change the cost of living index to wages not prices. This has been known for decades. No benefits are cut. This simply matches contributions to benefits. You can demagogue this but you cannot defend the current system.

10. Campaign Finance Reform. All general election campaigns for Federal office shall be funded from the general treasury as provided by law, and Congress may enact reasonable limits on fund-raising and campaigns prior to the general election by a vote of two-thirds of the members elected to and serving in each house.

I want to make one more point: this is really all about campaign finance reform. It strikes at the heart of why money is so important to our political system: because earmarked appropriations and progressive taxes guarantee that lobbying can pay off. Eliminate the payoff from lobbying and we will restore balance to our political system.

Budget Process

  1. The Comptroller-General of the United States shall be appointed and may be removed by the President with the approval of the House of Representatives and the Senate, each by a vote of at least two-thirds of the members elected thereto and serving therein. The Comptroller-General shall serve a term ending with that of the President appointing him and until a successor is appointed and has qualified. In case of a vacancy, the Supreme Court shall designate one of its members to serve in an acting capacity.

2. No funds may be paid from the Treasury except upon a warrant issued by the Comptroller-General, and the Comptroller-General shall issue no warrant except upon an appropriation made by law. The Comptroller-General shall not issue any warrant if it would result in the United States spending more in any fiscal year than the Annual Spending Limit provided herein.

3. The United States shall incur no new indebtedness except upon a warrant issued by the Comptroller-General, and the Comptroller-General shall issue no warrant except as authorized by law.

4. The Annual Spending Limit for each of the next succeeding four fiscal years shall be recommended by the President in 2016 and every four years thereafter by March 15 and shall be established by a joint resolution. The Annual Spending Limits established hereunder may be modified only by joint resolution passed by at least two-thirds of the members elected to and serving in each house and approved by the President.

5. The Comptroller-General shall have the power and it shall be his duty to sequester funds and indebtedness at any time the limits herein are likely in his sole judgment to be reached. Such reductions shall be proportional and applied uniformly.

Legislative Transparency

1. No law may be passed except through a bill. Each bill shall have a purpose which shall be expressed in its title, and any section of any bill not covered by its title shall be null and void even if enacted. No bill shall amend any law by reference but shall include the full text of the law as amended. No bill longer than 10,000 words excluding headings may be passed by either house except by a vote of two-thirds of the members elected to and serving in that house.

2. No resolution or bill may be passed by either house unless its full text as amended has been available electronically to the public for at least 72 hours prior to passage except by a vote of three fourths of the members elected to and serving in that house.

3. No bill or section of a bill, including appropriations, not having general applicability across all states may be passed except by a two-thirds majority of the members elected to and serving in each house.

4. Each committee of each house shall be elected separately by vote of each house using cumulative voting, and the chair of each committee shall be elected by and may be removed by majority vote of the members of that committee. Each house may dissolve a committee at any time by majority vote of the members elected to and serving therein.

5. Any other rule notwithstanding in either house, debate on a matter shall be ended and a vote held upon the passage of two motions to do so, which motions shall always be in order, separated by at least 168 hours and approved by a majority of the members elected to and serving in the house.

6. In the event the electoral vote for President and/or Vice President does not produce a majority vote for a candidate, the House and Senate sitting together in. joint session shall elect the President and/or Vice President from among the top two candidates for that office in terms of electoral votes.

7. Ninety legislative days after submission of any nomination to the Senate by the President, any Senator at any time may move approval or disapproval of such nomination and the Senate shall hold a vote on such nomination within 72 hours. The President may make recess appointments only following adjournment for the year.