The NH Balance
We can resolve our deficit problem in a balanced way: Involving both parties.
Recently the NH delegation to Congress switched from majority Republican to majority Democrat, in the process producing the first all womnn delegation by the state of New Hampshire. Our state has a reputation to uphold on fiscal conservatism, with a no income tax amendment getting a majority vote. Even during an election that was otherwise a complete democratic sweep, with the governorship, State House and Senate under control of a Democratic party that has and needs to continue to demonstrate conservative fiscal credentials
By helping craft a balanced approach to resolving the deficit without falling over the fiscal cliff, we can do that. Let us combine Democratic objectives with efficient Republican solutions. Obama’s goals with Romney means. Barack’s values with Mitt’s tool bag. It has been done before: Obama already used the Romney healthcare mandate for his plan. Why not use some of his fiscal ideas as well?
Such a program could be crafted by the old and new NH house delegation – all relative moderates - to ensure that we can act before the cliff. It could be supported by the Senate delegation which straddles the aisle.
Such a process could rebuild the center of American politics. How can a Republican house refuse a program that?
- Limits deductions to $50,000, in particular mortgage deductions and healthcare costs - but without changing the tax rate
- Reduce capital gains to zero percent on first home capital gains and k401 up to 1 mill per person. Exclude second homes, flipped homes (resale within 2 years) and non 401k investments. Charge the rest as normal income, ensuring that no boss pays less then his secretary.
- Raise other new revenues through new fees and charges, using the Romney Massachusetts approach. Focus on activities like cleaning up sites, a carbon tax to be used for utilities and a “fat and sugar” tax for food products.
Throughout, focus on eliminating deducations rather then reducing them. That reduces administrative work, makes investments tax neutral and eliminates lobbyists. Democrats should focus on increasing the percentage of people paying only payroll taxes to at least 50 percent.
In reducing expenses the plan should focus on the big ticket items: defense, healthcare/Medicaid and social security.
- Defense should focus on what the military needs most, eliminating or postponing high cost cold war items. JSF could be a good place to start, even though it’s a wonder of engineering
- Social security payments could also be treated as a tax deduction, i.e. tax free for the great majority of retirees. Longer term we should ensure that "healthy life" expectancy and retirement age are brought in line. With exceptions for those whose job significantly reduces healthy life expectancy: the military or physically heavy and dangerous work, starting with the generation that can still invest in early retirement through their 401ks if they so wish.
- Health care should now focus on competition and cost among providers and insurers and less administration
- Government administration needs a major push to increase the use of online information technology especially in dealing with citizens. No government service should be worse than airlines in providing information.
The President gets what he wanted: no cliff, no deficit and a fair solution in which those who can afford it contribute pay at least the same as their secretaries.
The details will change. This is just a first stab which can be adjusted. But promoting such a plan as a delegation could be a major win=win for NH. With the new delegation showing its effectiveness, the old delegation its bipartisan qualities and NH shows that we don’t only lead in the primary season but in pragmatic reform.