Our country is in financial trouble. Until the feds stops borrowing and printing more money, we must look for ways to curb spending in other ways. Republicans in Congress and on the presidential campaign trail understand government spending is out of control and are pushing for reforms to rein in spending and balance the budget. But in an increasingly-polarized Washington, it’s harder than ever to push for budget reform.
Republicans have an opportunity take strong action, even if it means ruffling some bureaucratic and special-interest feathers. The following are five party-neutral proposals Republicans could jump on to cut federal spending.
1. Let Medicare negotiate for lower drug prices or buy drugs from Canada. Our government spends billions of dollars on prescription drugs annually through Medicare and Medicaid. Federal legislation now in Congress would allow the secretary of Health and Human Services to negotiate with pharmaceutical companies the best possible prescription drug prices for seniors, potentially reducing costs for more than 37 million beneficiaries of the program.
The Medicare Prescription Drug Price Negotiation Act would repeal the law that prohibits Medicare from negotiating those prices, though companion bills have languished in both houses since 2013. Proponents say this bill could save the federal government nearly $160 billion over the course of a decade. A 2013 study from Center for Economic and Policy Research concluded the savings could be much higher, ranging from $230 billion to $541 billion over 10 years.
A simpler fix is to allow the federal government and citizens to buy their prescription drugs from Canada, where prices are vastly lower.
It’s time Congress did what is right for America rather than what the pharmaceutical lobby wants them to do.
2. Ban secret pharmaceutical company kickbacks. Doctors who inject drugs into patients are highly incentivized to use the most expensive drugs possible. For example, the drug company that makes Lucentis gives secret payments of up to $50,000 annually to promote the use of the drug.
Lucentis costs about $2,000 per injection, while another drug shown to be just as effective, Avastin, costs just $50 per injection. The Washington Post reported that “[D]octors choose the more expensive drug more than half a million times every year, a choice that costs the Medicare program, the largest single customer, an extra $1 billion or more annually.”
3. Allow veterans to use any U.S. hospital for health care. Our veterans deserve convenient, timely, first-class medical service — service our VA hospitals have failed to provide. VA hospitals should be converted to private or nonprofit institutions, and all veterans should be added to a Medicare Advantage program.
The cost of the huge, ineffective infrastructure of VA health care would shrink, and veterans would get better service, no matter where they live.
4. Allow corporate profits parked overseas to be repatriated at a lower tax rate. An estimated $2 trillion is parked abroad and won’t come back to the U.S. until corporate-tax rates are lowered here. The companies have already been taxed on those earnings overseas and would likely come back, if the U.S. tax rate were cut from 39 percent to 10 percent.
If just half the money – $1 trillion – were repatriated, then the U.S. Treasury would receive a $100 billion windfall in “found” revenue and the economy would get a jolt of activity.
5. Stop paying Social Security to rich people. Social Security was intended to be a retirement safety net – supplemental income so no one has to retire in poverty. Social Security benefits to people with more than $1 million in assets or with $100,000 in annual income are costly, and few would defend them.
The wealthiest among us don’t need, and shouldn’t get, Social Security – especially since Social Security ran a $39 billion deficit in 2014. In July, the system’s trustees warned that Social Security was projected to hit insolvency by 2034 if major reforms aren’t enacted.
It’s time for less talk and more action from Congress and presidential candidates on balancing the budget. There are obvious, bipartisan measures that would make an immediate impact to reduce government spending. All that’s missing is the political will to enact them.
Gary Shapiro is president and CEO of the Consumer Technology Association (CTA)TM, the U.S. trade association representing more than 2,000 consumer electronics companies, and author of two New York Times best-selling books. Connect with him on Twitter: @GaryShapiro. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
