Growing a strong Wisconsin economy includes bringing discipline to the federal budget and passing common sense fiscal reforms. So candidates and elected officials shouldn’t just pay lip service to fiscal discipline or lecture people about how bad things are. They need to do the work. So, after listening to small business owners and families across the state, Russ introduced a Fiscal Fitness Plan to get the federal budget back in shape.
Russ’s plan examines the budget from all angles. Instead of just making reckless cuts across-the- board, it identifies potential sources of savings in targeted areas — from huge Wall Street loopholes to unnecessary spending programs, from excess at the Defense Department to the personal salaries of members of Congress. And this plan calls out corporate loopholes for what they really are: Wall Street cronyism that spends the money of middle-class families on hedge fund managers and corporate executives trying to rig the system for themselves.
Cut unnecessary spending
We know from experience that that badly targeted spending cuts will backfire on our economy, undercutting our potential to grow, and eventually worsening the very budget problems we need to solve. That’s why Russ’s Fiscal Fitness plan chooses smart reductions that target special interest giveaways while preserving important investments.
- Reduce automatic pay raises for members of Congress.
- Cut the number of executive branch political appointments.
- Replace the Joint Strike Fighter Program with more cost-effective F-16s and F/A18s.
- Reduce the fleet of federal vehicles.
- Eliminate programs that have been made redundant by private enterprises, such as many of those under the International Trade Administration.
Build a smarter government
We need reforms to keep Washington accountable to everyday Americans and to make better use of their tax dollars. To do this, Russ believes we should:
- Allow Medicare to negotiate lower drug prices.
- Enable the Defense Department and Department of Veterans Affairs to coordinate their drug purchases.
- Implement two-year budgeting to help the government better plan its spending.
Restore Balance to the Tax Code
Some of the worst inefficiencies in Washington happen when Congress “spends through the tax code,” often as giveaways to the very powerful and wealthy. To make our budget fiscally sound, we need to deal with these corporate loopholes. First, we need to close the carried interest loophole, which is nothing more than a sweetheart deal for hedge fund managers and wealthy professional investors — allowing them to pay lower tax rates on the income they earn from managing fees than other Americans because it is taxed at a lower rate.
We should end the practice of tax inversions, which allows companies to technically move their headquarters to low tax countries while still doing most of their business in the United States. Middle-class and working families can’t pay a team of high-priced lawyers to create those types of gimmicks to duck taxes, and everyone knows the cost of the tax loopholes they find is passed along to the rest of us.
Other changes include:
- Eliminating subsidies for oil and gas companies, as well as for tobacco companies.
- Ending the carried interest loophole that allows hedge fund managers often to pay lower taxes than do working families.
Require the government to “Pay as You Go”
Finally, closing these loopholes and enacting these spending cuts could be used to reduce the deficit, but it’s also important that we have a system where Congress must financially offset any measure that increases the budget. Once we finally do the hard work of cleaning up our budget, Congress will still face the temptation to move the budget away from the priorities of working people. But a “dollar for dollar” approach, known as PAYGO, forces fiscal responsibility to be a part of the discussion before out-of-touch politicians try to pass more Wall Street tax breaks, or create a new unnecessary spending program.