General Wesley Clark's "Saving for America's Future Plan"

Saving $2.35 trillion over ten years for deficit reduction and investment in priorities.

Wes Clark has a plan to save $2.35 trillion over ten years. The plan reduces the deficit and frees up money to invest in priorities like education and health care. Under Wes Clark's plan the deficit is reduced every year. But this plan is only a down payment on the challenging goals of a balanced budget and full readiness for the retirement of the baby boomers - and further tough steps will be needed. Deficit reduction and investment in priorities are key parts of Wes Clark's plan to jumpstart the economy and create jobs, save for the future, and invest in people.


Putting America on a course for more fiscal responsibility in the future would be good for the economy today, helping to restore confidence, keeping long-term interest rates lower, while ensuring that America meets its obligations to the future. That's why Wes Clark is proposing a plan to save more than $2 trillion for America's future - providing resources to reduce the deficit and invest in priorities like healthcare and education. Wes Clark's "Saving for America's Future Plan" provides effective stimulus for the economy without increasing the deficit in 2004 and 2005 by redeploying $100 billion in tax cuts for the most fortunate families into bigger bang-for-buck investments in homeland security, state fiscal relief, and incentives for business to create jobs and grow.

Wes Clark's plan would:

• Pay for proposals. Wes Clark would restore the basic principle of responsibility to the budget process: all tax and spending proposals must be paid for without increasing the deficit. This principle, called PAYGO in Washington budget rules, was a consensus during periods of deficit from President Clinton to House Speaker Newt Gingrich, but the Bush administration has entirely ignored it.
  
  
• Streamline government and improve efficiency, including healthcare: $225 billion. Wes Clark's plan would streamline government and improve efficiency, including in healthcare. On defense, Wes Clark supports every dime needed to keep America strong, but he won't tolerate billions of dollars in waste or inefficiency just because it has a military label on it.
  
  
• End corporate welfare and close corporate loopholes: $300 billion. Wes Clark won't tolerate corporate welfare or corporate loopholes in the tax code. These provisions waste resources while providing companies with incentives to pursue handouts instead productivity growth and job creation. Wes Clark supports creation of the Corporate Subsidy Reform Commission to identify corporate welfare and then force Congress to vote up or down on an entire package of cuts. He'll also close loopholes in the tax code, like the ones that allow companies to avoid taxes by shifting income to Bermuda or buying life insurance for non-executive employees who never see a dime.
  
  
• Promote a more effective and multilateral Iraq policy: $125 billion. In two budget requests, President Bush has asked Congress for a total of $166 billion for Iraq and other conflicts, but he has been unable to get any meaningful assistance from other countries. Wes Clark would reverse the Bush Administration's failed Iraq policy and work more effectively with NATO and other partners.
  
  
• Recapture revenue from the provisions of President Bush's tax cuts for the wealthiest families-those making over $200,000 annually: $1.1 trillion. Wes Clark would propose a tax reform package to make the tax code simpler, fairer, more progressive, and more pro-growth. In the process, this reform would recapture the revenue from the provisions of the 2001 and 2003 Bush tax cuts that go to families making over $200,000 annually, either by repealing these provisions or making other changes to recapture the revenue. Wes Clark's plan would protect the estate tax repeal for small businesses and family farms and would ensure that middle-class families get the benefit of lower taxes on dividends.

In addition, Wes Clark's plan would save $600 billion in additional debt service savings as a result of reducing the deficit more quickly.

The benefits of Wes Clark's responsible policies for America's future are:

• Responsibility not to pass tax increases onto our children;
  
  
• Responsibility to improve our fiscal situation so that America's seniors have a secure Social Security and Medicare;
  
  
• Responsibility to keep interest rates lower today and in the future, stimulate the economy, create jobs, and foster investment and homeownership;
  
  
• Responsibility to have America live within its means without unprecedented and unsustainable borrowing from abroad;
  
  
• Responsibility to address urgent problems of uninsured children and crumbling schools.

Wes Clark's budget saves $2.35 trillion over ten years for deficit reduction and spending on priorities relative to a continuation of President Bush's current policies.




As president, Wes Clark would save $225 billion by implementing a budget that streamlines government, ends redundant spending programs, and improves efficiency. Wes Clark's plan would make the following specific changes to streamline government. He'll also take a hard look at the rest of government to find additional savings toward his goal of saving $225 billion over ten years.

• Eliminate the Commerce Department's NTIA. With the convergence of telecommunications and technology, there's no longer a need for both the Commerce Department's Technology Administration (TA) and its National Telecommunications and Information Administration (NTIA). Therefore, Wes Clark would eliminate the NTIA. NTIA's core governmental functions-such as research and efforts to close the digital divide-would be shifted to other government agencies (such as TA).
  
  
• Eliminate Office of Thrift Supervision. The Office of Thrift Supervision (OTS) was established in the late 1980s when there were roughly 3,000 Savings and Loan (S&L) institutions. Today, there are a less than 1,000. With four other federal regulators of banks, the time has come to eliminate OTS and shift the regulation of S&Ls to one of the other federal bank regulators (e.g., the Federal Reserve, Office of the Comptroller of the Currency, etc.).
  
  
• Consolidate trade promotion activities. According to the Senate Governmental Affairs Committee, ten federal agencies help U.S. firms export their products abroad. For example, one agency promotes international trade among American businesses (the Department of Commerce). For farmers, a different agency is responsible for promoting exports (the Department of Agriculture). Businesses seeking financing for exports can apply to the Export-Import Bank or the Overseas Private Investment Corporation. As President, Wes Clark would consolidate the trade promotion activities of the U.S. government into fewer agencies, which will save money and simplify government, helping citizens and businesses to get what they need from their government and enabling more effective promotion of U.S. exports.
  
  
• Consolidate statistical agencies. Today, at least 70 different federal agencies engage in statistical activities. The division of labor between these statistical agencies often makes little sense. Experts have concluded that consolidation of the major economic statistical agencies would produce better data at a lower cost. Therefore, as President, Wes Clark would consolidate the principal statistical agencies into a single agency called Statistics USA, modeled after Statistics Canada.
  
  
• Institute competitive bidding and payment constraints for medical equipment. Wes Clark believes we should end overpayments to medical equipment suppliers for the provision of medical equipment like wheel chairs, and canes. That's why he supports instituting a competitive bidding or payment constraints for Medicare contracts with these suppliers. The policy would provide for special exceptions for rural communities to ensure sufficient access to these supplies.
  
  
• Save on drug payments by Medicare. According to the Department of Health and Human Services' Inspector General and the General Accounting Office, Medicare has been significantly overpaying for the few prescription drugs it actually pays for within the Medicare program. Wes Clark believes that Medicare should set payment rates closer to acquisition costs, while maintaining policies that provide doctors with the flexibility to prescribe these drugs when needed.
  
  
• Better enforcement of the Medicare secondary payer provision. The law requires that Medicare be a secondary payer for elderly workers who have employer-provided health care. These seniors' private health care plans are supposed to be the primary payer, and Medicare is supposed to supplement coverage only where there are gaps in an employer's plan. Studies have shown, however, that many employers are illegally passing payments on to the government. A more aggressive auditing policy can achieve significant savings.
  
  
• Reduce market entry barriers for generic drug competition. Wes Clark believes in reducing market entry barriers for generic drugs so consumers can benefit from lower drug prices. Today, brand-name companies systematically abuse a legal loophole that delays the availability of generic drugs into the health care system. As President, Wes Clark will ensure that drug companies have the incentive to invest in research and development while eliminating the 30-month stay that brand-name companies automatically receive when generic manufacturers attempt to enter the market.

Wes Clark would save $300 billion by ending wasteful corporate welfare and closing tax shelters.

• End Corporate Welfare as we know it. Wes Clark won't tolerate corporate welfare or corporate loopholes in the tax code that waste resources while providing companies with the wrong incentives. That's why Wes Clark supports the Corporate Subsidy Reform Commission, which would put in place a base-closing style commission to identify corporate welfare and force Congress to vote up or down on an entire package of proposals.
  
  
• Close tax shelters that benefit the few and harm the middle class. Sophisticated accountants and lawyers have created wasteful - and often illegal - tax shelters to reduce the taxes that corporations and rich Americans pay. As President, Wes Clark would aggressively prosecute illegal tax shelters and close down those that are legal but outrageous.

Wes Clark would Save $125 billion from 2006-15 by promoting a more effective and multilateral Iraq policy.

President Bush has submitted requests for $166 billion for the war in Iraq and additional costs of the war on terrorism. These requests, however, are only a down payment on the full costs of the war. The Democratic Staff of the House Budget Committee estimates that under Scenario C "Things Go Worse" the conflict in Iraq would cost $418 billion from 2003-13, $180 billion more than Scenario A "Things Go Well." ["The Cost of War and Reconstruction in Iraq: An Update," 9/23/03]. Measured over Wes Clark's 2006-15 budget window, this is a savings of $125 billion. This is a conservative estimate of the savings from Wes Clark's policy, which would:

• Resolve the ongoing conflict in Iraq more quickly and effectively.
  
  
• Effectively incorporate allies, ensuring that they pay a meaningful share of the reconstruction.
  
  
• Require competitive bidding to ensure that taxpayers were getting the best possible value for their reconstruction dollars.

Under President Bush, America has gone from record surpluses to record deficits. Though fiscal deterioration is normal in times of war or recession, the Bush deficits have not provided effective stimulus to curb job loss, and the deficits are projected to worsen even when strong economic growth resumes.

• From a $5 trillion projected surplus to a $5 trillion projected deficit. America has gone from a record dollar surplus of $236 billion in FY 2000 to a record dollar deficit of about $374 billion in FY 2003. In January 2001, the Congressional Budget Office (CBO) projected a unified surplus of $5.6 trillion from 2002-11. Today, leading analysts like Goldman Sachs, the Concord Coalition, the Center on Budget and Policy Priorities, and the Committee for Economic Development agree that making realistic adjustments to CBO's baseline projection reveals a 2004-13 deficit of about $5 trillion. [CBO, The Budget and Economic Outlook January 2001 & August 2003; Goldman Sachs, "The Federal Deficit: A $5.5 Trillion Red Elephant," 9/9/03]
  
  
  • Pete Peterson, currently Chairman of the Federal Reserve Bank of New York and former Secretary of Commerce under President Nixon: "In just two years there was a $10 trillion swing in the deficit outlook." ["Deficits and Dysfunction," New York Times Magazine, 6/8/03]
    
    
  • Three leading groups - the Concord Coalition, the Center on Budget and Policy Priorities (CBPP), and the Committee on Economic Development (CED) - recently stated that if current policies are continued then "the coming decade is likely to rank as the most fiscally irresponsible in our nation's history." ["The Developing Crisis - Deficits Matter," 9/29/03]
  
  
• 3.2 million lost private-sector jobs - including 2.5 million lost in manufacturing. Between 1993 and 2001, the American economy created nearly 21 million private-sector jobs. Since President Bush took office, the American economy has lost 3.2 million private-sector jobs - that's the worst record on jobs since Herbert Hoover during the Great Depression. The economy has lost jobs in 26 of the 32 months since President Bush took office. [Based on data from www.bls.gov]
  
  
• The Bush tax cuts cost three times more than the cost of saving Social Security for 75 years. Over the next 75 years, the Administration's tax cuts would reduce revenue by $12 trillion to $14 trillion in present value - more than three times the Social Security deficit over the same period. [Center on Budget and Policy Priorities, "The Administration's Tax Cuts and the Long-term Budget Outlook," 3/19/03]