OTHER PRIORITY ACTIONS FOR THE TRUMP ADMINISTRATION
by Sunil J. Wimalawansa
Industries create most jobs, not the government. Government is there to facilitate the process; not the government but people will solve the problems.
(January 13, 2017, Washington, D.C. Sri Lanka Guardian) It is hard to balance the national budget with impending marked increases in spending, such as infrastructure and defense as sought by the Trump administration, in the absence of addressing entitlements.
By 31st of March 2017, Congress must approve adequate funds to prevent sequestration of the U.S. government. Bipartisan support is needed for this funding approval to prevent a government shutdown in April 2017. Thus, the administration must come up with a plan for generating new revenue and explain this clearly to the Congress and to the public, within the next few weeks.
Otherwise, the grandiose plan for rebuilding America by the new administration might ends up as an empty shell. Methods of generating funds for the treasury, such as excessive borrowings that increasing the budget deficit or engaging in another economically destructive, monetary policy of large-scale quantitative easing (printing money) are not good ways to generate funds, and will be bad for the country.
Cyber security is a current high priority. Over the past few years the number and the severity of cyber-attacks on private and governmental institutions have escalated. Irrespective of who is attacking, these actions demonstrate serious vulnerabilities of the U.S. Internet security systems. Thus, new administration must appoint a high-level, expert IT security panel to come up with a specific plan to prevent such at earliest possible.
Moreover, government should mandate the major web-severing and e-mail hosting companies, such as Gmail, Yahoo, Hotmail, Optimum, etc., to develop their own software (or collaborate among themselves) to automatically remove all phishing and other dangers emails form their systems, before these reaching customers, industry, or governmental facilities. The goal being to decrease the threats and vulnerabilities of the public and U.S. institutions, to minimum.
Under the current turmoil of escalating cyber-attacks in the country, author suggest that approximately 10% of the allocated funds for infrastructure development (as discussed in the Part 11 of this series) to be earmark for developing a novel, highly-effective, cyber security system for the country. Such is essential to shield our electronic systems from cyber-attacks from within and outside the country, thus proactively minimizing the harm.
The U.S. has plenty of super-experts and high-end technologies to address this. What is lacking so far is the political will and allocation of funds. Despite increasing cyber-attacks during recent years, adequate pro-active preventive steps were not taken, and the threats have been ignored. This is another area to be prioritized utilizing the defense budget, which should be commenced at earliest possible.
Removing wasteful spending, tariffs and subsidies:
Although it is not palatable for many, the government needs to examine various options to control entitlement costs, together with enhance generation of funds to the treasury. New funding must be identified to pay for the proposed development projects. In this regards, there had been many government-initiated non-value-added ‘projects’ within and outside the country.
Projects that have not intended to have any meaningful outcomes, building bridges to nowhere, and meaningless and mundane research projects funded by government institutions, such a National Institutes of Health, etc. With such efforts, billions of taxpayers’ funds are wasted each year. In addition, there are several efforts across America benefitting small groups of people who exploit large governmental subsidies (funded through our taxes). There are designed to satisfy special interest groups and advocacy/pressure groups; such examples include, beef and ethanol industries, and the agriculture sector, but there are many more.
There is no reason or fairness what-so-ever why the public should subsidize these multi-billion dollar industries that purely benefiting them. For example, the only purpose of the wasteful appropriations such as ethanol subsidy by federal government is to please a special interest groups. It is unfair for the rest of the populous and can also be destructive.
Now that the lobbying is to be curtailed, the new administration should seriously consider eliminating many of these long-standing subsidies that waste taxpayer dollars, earliest possible or at least phasing them out over a period of 12 to 24 months. This alone can release over 350 billion dollars annually for the treasury, that can be diverted to infrastructure development and essential education reforms.
Prompt and proper attention to the current immigration issues and border controls via a disciplined system, enforcing the current regulations, and abolishing sanctuary cities are essential components that need urgent actions. Proper attention to these is expected to bring about the following results:
- Prevent smuggling of drugs, people, and other illicit trafficking;
- Decrease crime, violence and robberies;
- Minimize granting of unfair citizenship to millions of people who are over staying or came to the U.S. without visa, when millions are awaiting to obtain U.S. citizenships applied through proper channels;
- Improve employment opportunities and salaries (and the minimum hourly rate) for Americans;
- Prevent the downward spiral of wages of blue-collar Americans (albeit the official unemployment rate has fallen steadily since early 2015 and was 4.7% in December 2016, real rate is about 10%);
- Create greater ease and confidence among the public; and
- Pave the path for economic success and prosperity of the country.
Failing to take firm action on the above would be unethical and unfair, not only for the constituents but also for the millions of qualified people who are patiently waiting for their turn to come to this country. Some of whom have been waiting for years for the granting of their U.S. citizenship. Thus, securing the southern border via multi-model approaches is not only a key promise by Mr. Trump but also a priority that should be initiated as early as possible.
Construction of the Security Wall at the Mexican border:
In fact, this should be one of the large infrastructure/ construction projects the new administration ought to commence, as soon as by March 2017. As with construction of new oil field in Nova Scotia, construction of new cities in remote locations, people form inner-cities and places where thee unemployment is high should be given the opportunity to participate in the construction of this security wall in the border with Mexico. Another prospect is to give the opportunity for the local prisoners join this major constructing effort, where they will not only learn the trade of construction but also can earn some money.
Implementing statuary city laws and enacting Kate Steinle law:
It is also critical to enforce the existing specific federal laws prohibiting sanctuary cities and harboring of criminals by local administrations. In addition, there is a bill pending in the Congress (Kate Steinle law) to strength this. We hope this will be enacted without further delay. In July 2016, Attorney General Loretta Lynch notified sanctuary cities that they must follow the existing laws and these initiatives should be followed up by the new Attorney General.
Plans for tax cuts:
Especially with the stagnant salaries over the past decade, constituents desperately want more take-home pay. Thus, people expect the Trump administration to implement across-the-board tax cuts as early as possible (not towards the end of 2017), during the first 3 months and to back date it to January 1st, 2017. Economic growth and job creation, and increase spending will follow that.
Recently, the economist, Stephen Moore proposed to reduce the corporate tax bracket to 15% first, and then a stepwise reduction of individual tax brackets in later dates. However, this will not work for most of the public. Tax cuts should be executed simultaneously across the board. There is no rationale to have staggered tax cuts. It also makes easier to implement tax cuts across the America.
It is important to realize that any corporate tax imposed (whether it is the current 35% or the proposed 15%), is a “pass-through tax” to customers. Eventually, consumers, not corporations will be paying the tax burdens. Thus, for practical purposes, individuals and families should add the proposed 15% corporate tax taxes into their personal taxes as extra expenses. This, together with state taxes if any, would provide them a reasonable guidance in understanding the total taxes they are paying to the state and federal governments.
To be Continued
Professor Sunil J. Wimalawansa, MD, PhD, MBA, DSC, is a physician–scientist, social entrepreneur, educator, and philanthropist, with strategic long-term vision. The author can be reached via wimalawansa.org