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Commentary: A sequester solution both sides will like
0224Jeffrey Dorfman
Jeffrey Dorfman

With about a week to go until the previously agreed-upon budget cuts called the sequester, some Republicans and virtually all Democrats in Washington are searching for a new agreement that will avoid those budget cuts and replace them with either fewer cuts, some tax increases, or nothing at all.

Even though most of the people desperately searching for a solution to the sequester voted for it a little over a year ago, they now find it terribly flawed and in great need of improvement. In fact, Congress and the president are so concerned about avoiding the sequester that they are taking this week off for President’s Day.

So, for all those looking for a way out of a deal they freely agreed to, here is a solution that has something for all sides to like.

For Republicans, my plan would not allow for spending cuts to be postponed or replaced with tax revenue. In fact, spending would be guaranteed to be at or below the levels required by the sequester.

For Democrats, my plan would allow flexibility so that cuts can be avoided in the programs they place at the top of their priority list for protection. As a bonus for Democrats, control over any changes in what programs get cut will rest solely with President Barack Obama. So what is this plan? It is really quite simple.

Budget cuts each year must be at least as large as called for in the Budget Control Act, the formal law that has led to the cuts that we now all refer to as sequestration.

However, because a major criticism of sequestration is the indiscriminate nature of the cuts, my plan would allow substitutions to be made in order to protect chosen programs from some or all of their scheduled cuts. These substitutions would be determined by the president, so we don’t need to wait around for Congress to agree on budget cuts (since that will never happen).

To cancel a currently specified budget cut, President Obama simply names a new budget cut to replace it and the new cut must be 25 percent larger than the cut it replaces. That is, Obama can choose anywhere in the federal budget to make cuts, but he must cut a little more in the program of his choice in order to spare those programs he wants to protect. Also, the substitute cuts must be in the same year as the cuts they replace; no delaying the cuts until some distant, future year.

Obama can use his discretion to reduce the cuts in the defense budget if he really wants to, or the cuts to education and research spending, or both. It would be completely up to him — given proper authorization by Congress, which would have to pass a law to implement my plan allowing the president the authority to move funds around within the budget.

If Obama really believes there is waste in the budget as he has said, he can now identify it and make the cuts in those places, thereby sparing more vital programs. By increasing flexibility and allowing cuts to occur in a more uneven manner than required under the Budget Control Act, spending can be cut in a more efficient way.

As an additional incentive to efficient government, I recommend that Congress include in the legislative version of my plan a general encouragement for all agencies to reduce spending. This part of the plan is as simple as the first. Any agency that spends less than authorized and appropriated in one fiscal year would receive 25 percent of those savings to be used for employee bonuses in the following year.

I will leave it to Congress to decide how to control the awarding of bonuses to ensure that they go to employees closely associated with the budget savings, but that detail doesn’t seem too difficult to handle. The important thing is that the money paid out be in the form of one-time bonuses, not permanent salary increases. That way, when an agency is a good steward of public funds, the employees are rewarded without sacrificing all the savings or incurring a future spending burden.

I will be perfectly happy if the budget cuts specified in the Budget Control Act go into effect. However, if Congress and the President really want to improve the situation, this seems like a reasonable solution.

My plan maintains the size of the cuts, which is only a little over 2 percent of federal spending, so it still enforces fiscal discipline. Yet it allows for flexibility in budget cutting.

If the president were to choose substitute cuts in the least worthy government programs, such management would reduce the damage done (if any) by the budget cuts. After all, there are plenty of candidates for government programs in need of big budget cuts.

If we wait for Congress to agree on the location of budget cuts, the budget will never be cut; that is why the sequester was proposed by Obama in the first place.

Under my plan, Congress is essentially controlling the amount of the budget cuts while the president chooses where the cuts will be made. This seems like an appropriate delegation to the executive branch of government.

If Congress will let go of a little control in the budgeting process, they might actually get control of the actual budget.