THE BLOG
01/22/2013 09:18 am ET | Updated Mar 24, 2013

5 Steps to Fix the Fiscal Flop

The fiscal cliff deal sure seems like a flop.

President Obama did not get the "grand bargain" or big deal he had hoped for. John Boehner and congressional Republicans didn't get the spending reform they keep dreaming about either.

It seems as if everyone is mad at Washington and our dysfunctional government. What we did get was effectively a tax cut for everyone making less than $400,000 annually. There does not seem to be much if any complaint about making these Bush era tax cuts permanent.

This seems like a great starting point for a renewed national discussion about the size of government and the role for government in America.

My anecdotal polling indicates that we have 5 widely held beliefs in the U.S.:

1. My taxes are high enough don't raise them any further
2. I hate wasteful government spending
3. We should look after the truly needy, but I hate seeing food stamps used to purchase $5 almond milk at the health food store.
4. I'd still feel safe even if the military had its budget cut by far more than the sequestration would do.
5. The federal debt is unsustainable.

It's possible that our inept Congress has stumbled onto the first step on the correct path, albeit a really long path.

Here are 5 more incremental steps that congressional Democrats and Republicans could take to signficantly impact the federal debt:

1. Politics is beginning to articulate how much Americans are willing to spend on government. It's going to be a long time before we will be able to raise taxes again, so the extra $610 billion over the next ten years is about all we get to work with (prior to a tax code overhaul).

Now that political warfare over raising the debt ceiling has begun, let's ask the Democrats to honor this concept: no increase in debt, unless the money is delegated to infrastructure. In other words, we don't ask our grandchildren to pay for anything they don't get to use.

2. Unemployment benefits for 99 weeks? I have no idea how much this costs, it might be minimal. But just for the sake of symbolism couldn't we cut this in half?

3. We'll never stop all the cheats on SNAP (formerly food stamps), but let's ask congress to no longer allow processed foods except dairy, frozen fruits and vegetables, bread and rice.

4. In return, the Republicans agree to a significant decrease in military spending. How about: military spending is limited to the combined size of the next two largest militaries in the world?

5. It's the Cost of Healthcare Stupid! (to paraphrase James Carville). None of the above addresses the single biggest cost in government. Medicare and Medicaid consume 21 percent of the federal budget. Here's why we all have to hope that Obama care can get fine-tuned. Only by reducing the cost of health care can we significantly reduce the amounts we pay into Medicare and Medicaid.

Oh sure, we might and probably should raise the age for Medicare from 65-67 years old. But the Congressional Budget Office estimates Medicare spending would only decrease about 5 percent by doing this. Not nearly enough.

The discussion always seems to end up at the same place. Americans want the same level of health care, but no higher taxes.

The Health and Human Services department projects that by 2017, 19.5 percent of GDP will go to health care. Someone has to pay for that.

It's going to take a lot of tinkering to significantly decrease the percent of our money we spend on healthcare. A divided and highly partisan congress has little hope of adjusting the rules to save us all money. With more than 870 registered insurance lobbyists, what chance do we have?

We have one chance, which is to collectively voice our opinion and drown out the lobbyists.

If the Soviet Union was the great threat to the U.S. during the cold war, then out national debt has assumed their role. There was disagreement on how to face the Soviet menace, but generally all agreed something had to be done. Let's tell congress that Obamacare is here to stay, so get to work on making it cut the cost of health care in this country.

If different political parties can agree that the Soviet menace was the single biggest threat to America, why can't we do the same with the debt? Democrats and Republicans disagreed during the Cold War, but still built the strongest military in history to deal with Moscow. View the debt as the Soviets, and the cost of healthcare as the Soviet military.

Degrade the cost of healthcare, and threat of the debt is greatly reduced.