Federal spending is out of control and the national debt has reached $9.2 trillion. The reasons for the excessive spending are that federal government is funding things they have no business being involved in and once the funding is in place, it becomes an entitlement that never goes away. Additionally, if we don’t spend more on entitlements each year, then people complain that their programs are being cut. Also, there is no law to limit Congress from spending more than it receives in revenues. Legislators, in there unending focus on reelection, add billions in funding that is earmarked for pet projects in their states. These earmarks are literally slipped into legitimate funding bills at the last minute with little chance for review. Once the bill hits the President’s desk, there is no opportunity for these individual items to be vetoed without vetoing the entire bill.

The changes we need to make are for Congress to approve only balanced budgets, to significantly reduce the amount of annual spending and to reduce the federal debt.

First, a Balanced Budget Amendment or some similar type of legislation needs to be implemented that doesn’t allow Congress to approve one penny more in annual spending than the amount of revenue received over the previous 12 months. This will force Congress to make tradeoff decisions among competing funding requests. Also, the balanced budget legislation will eliminate entitlements by not allowing any automatic carryover of spending from year to year. All spending items in the budget start at $0 and legislation must be introduced and approved for those items to receive any funding. I should also note the Congress will have the authority to adjust the FairTax rate (see #3 Tax Revolution) as necessary to achieve desired revenue levels.

Federal spending will be reduced significantly from current levels through the following items:

- Elimination all business/corporate/farm subsidies and grants (let them compete in a free market)

- Elimination of current welfare programs and Medicaid (see #5 Working with Welfare)

- Elimination of Medicare (see #2 Healthy Choices)

- Phase out of Social Security (see #4 Social Security R.I.P.)

- Elimination of the Department of Education (see #14 Rethinking Education)

- Reduced funding for many other departments (Labor, Health & Human Services, Agriculture, Housing & Urban Development, etc.)

The following are the priority budget items that need to be funded:

- Interest payments on the national debt

- Pay-down of the national debt

- Executive, Legislative & Judicial branches

- Departments (Homeland Security, Defense, Energy, Commerce, Justice, State, Interior, Treasury, Transportation, Veterans Affairs, etc.)

- Agencies (CIA, FCC, NASA, NTSB, OSHA, SEC, USPS, etc.)

- Welfare Safety Net and Unemployment Support (see #4 Working with Welfare)

- Supplemental Disaster/War Fund (“extra” money for natural disasters or military actions)

- International Assistance (a.k.a. foreign aid)

If the actual revenue does not meet total spending amount budgeted, then the pay-down of the national debt, supplemental disaster/war fund and international assistance will be the first candidates for funding cuts to make up the difference. Extra pay-down of the national debt will be made with any revenues that exceed the total spending.

The final part of this change will be to provide the President with line-item veto authority. That will allow the President to cross-out those unrelated pet projects without rejecting the entire bill. Any vetoed items would need to go back to Congress and receive a two-thirds majority to have the veto overridden. It provides the President with more fiscal responsibility and a necessary check and balance against wasteful spending by Congress.