THE CRUZ FIVE FOR FREEDOM
The Obama Administration has little to show for its out-of-control spending. We have a stagnant economy, lagging job creation, and the lowest labor-force participation since the Carter Administration. The Obama economy has burdened each American household with the equivalent of $57,000 of federal debt. Under such stifling circumstances, it’s no wonder that 84 percent of college graduates do not have a job lined up after graduation, and 13.2 percent of young adults are out of work. The Obama economy is sinking our next generation further and further into debt, while the ever-expanding federal government is creating fewer jobs, less growth, and scarcer opportunity. The current level of spending is not only irresponsible, but immoral and unjust to future generations.
No responsible parent would leave their children with hundreds of thousands of dollars in debt; we should not allow the government to do this to our children and grandchildren either. It’s time for Washington to tighten its belt – no more reckless spending or handing out favors to K-Street lobbyists while hard-working Americans are left to foot the bill.
It’s time for bold change. Change that stops Washington from squandering Americans’ money; that scraps the current tax code and replaces it with a single, fair, low rate for all; that reins in Washington’s costly regulations; that honors the People’s work with the dignity it deserves; and that finally gets the government out of our pockets and off our backs.
Of course, because entitlements constitute roughly two-thirds of federal spending, no government spending plan is complete without addressing entitlement reform. And in the coming months, I will be laying out a detailed plan to do just that, to strengthen and preserve Social Security and Medicare, and to ensure their fiscal strength for decades to come. But we should start with federal discretionary spending.
I have already introduced the Cruz Simple Flat Tax, which reduces the existing seven individual rates to one low rate of 10 percent for all Americans; eliminates the corporate carve-outs and loopholes; and requires every business to pay the same Business Flat Tax of 16 percent. Under my plan, the after-tax income of all Americans goes up by double digits, compliance costs go down, and the economy booms. The Simple Flat Tax is so simple and transparent, in fact, that Americans will be able to fill out their taxes on a postcard or smartphone app.
One important upshot of the Simple Flat Tax is that it allows us to eliminate the IRS. That agency, as we know it, administers a rat’s nest of laws and loopholes that allow it to wield unfettered power and that embolden it to target political opponents.
If elected, I will abolish the IRS. But I won’t stop there. We will abolish four cabinet agencies as well. And we will sharply reduce the alphabet soup of government entities, beginning with the ABCs that should not exist in the first place: The Agencies, Bureaus, Commissions, and other programs that are constitutionally illegitimate and harmful to American households and businesses – including the Consumer Financial Protection Bureau. It’s time to return to a federal government that abides by our constitutional framework and strips power from unelected bureaucrats.
We must break apart the federal leviathan that has ruled Washington and crept into our lives. Once we dramatically reduce the size of government – paired with fundamental tax reform and regulatory reform – we will reignite the promise that has made this the freest and most prosperous nation in the world.
To start the process of reducing the scope and cost of government, I will institute the following five reforms, which are estimated to save more than $500 billion over 10 years:
- Five for Freedom – abolish 4 unnecessary cabinet agencies and the IRS.
- 25 Federal “ABCs” – eliminate 25 Agencies, Bureaus, Commissions, and other programs.
- Grace Commission 2.0 – reinstitute President Reagan’s Panel on Cost Control (“The Grace Commission”) to identify waste and inefficiency.
- Congressional accountability – amend the Constitution to require Congress and the President to balance the budget, and enact the REINS Act.
- Federal hiring freeze and reform– institute a freeze on the hiring of federal civilian employees across the executive branch, and reform automatic worker raises.
Estimated Savings of Over $500,000,000,000 in 10 years
1. FIVE FOR FREEDOM:
During my first year, I will fight to abolish the IRS, the Department of Education, the Department of Energy, the Department of Commerce, and the Department of Housing and Urban Development. To do that, I will press Congress relentlessly. And I will appoint heads of each of those agencies whose central charge will be to lead the effort to wind them down and determine whether any programs need to be preserved elsewhere because they fall within the proper purview of the federal government. I do not anticipate lists to be long.
Internal Revenue Services
Americans spend far too much time, energy, and resources answering to the agency whose harmful conduct extends far beyond collecting large portions of the people’s hard-earned dollars–top IRS officials have targeted individuals based on their political and religious views and threatened their First Amendment rights. The IRS has become a partisan arm of the Obama Administration and an avenue for the Washington Cartel to further benefit its members, to the detriment of working Americans.
Essential to abolishing the IRS is wiping clean the cob-webbed tax code and starting over with the Cruz Simple Flat Tax, which sets one low rate of 10 percent for all individuals and enables them to fill out their taxes on a postcard or smartphone app. The Simple Flat Tax also taxes all businesses at the same, fair Business Flat Tax of 16 percent, removing the loopholes and backhanded funding of big businesses and special interests. The Simple Flat Tax fundamentally changes the tax code and abolishes the IRS as we know it. The remaining personnel needed can be housed in a drastically smaller division of the Department of Treasury.
Ineffective Spending:
- Since 2011, there have been multiple serious allegations that top IRS officials have repeatedly committed felonies, including lying to Congress and disclosing the taxpayer and donor information of conservative groups, such as the Texas Public Policy Foundation and the National Organization for Marriage. The Obama Administration’s IRS also handed over to the FBI and the Department of Justice the legally protected taxpayer information of more than 12,000 grassroots organizations in order to launch investigations into the political speech activities of these nonprofit groups.
- The IRS has repeatedly attempted to stifle citizens’ First Amendment rights. As grassroots activist Toby Marie Walker detailed in her testimony before the Senate Judiciary Committee, the IRS has forced citizens to hand over blog posts, tweets, radio interviews, planned-event data, and lists of every candidate with whom they have had a relationship. If Walker and fellow leaders of the Waco Tea Party failed to comply, they could be penalized for perjury.
- Every year, Americans spend about $500 billion and 6.1 billion hours on tax compliance. That time is the equivalent of 152 million Americans each working a full 40-hour workweek solely on taxes – or, alternatively, 59,580 Americans working a 40-hour workweek every week from the time they are 18 until they are 67.
Department of Education
Educational opportunity thrives on choice, ingenuity, and diversity; the Department of Education squelches all three. Largely created as an outgrowth of Lyndon B. Johnson’s Great Society, the Department of Education has existed in its current form since 1980. Despite its stated aim to bring equal access to all, it has failed to close the gap between low-income communities and other communities, and instead has led to one-size-fits-all solutions imposed on millions of students with differing educational needs. Eliminating the Department of Education not only restores the states’ constitutional power and saves taxpayers billions of dollars, it returns decision-making to parents and local communities, and liberates students and teachers from a failed top-down approach. The growing federal role in education spurred by the Education Department has led to perverse mandates such as Common Core and counterproductive laws such as No Child Left Behind.
We should repeal every word of Common Core. And, as President, I will direct the Secretary of Education to immediately end the federal government’s mandates that seek to force states to adopt this failed attempt at a universal curriculum.
Even more broadly, we need to get the federal government out of education altogether. The Department of Education has the third largest discretionary budget in the federal government, and it provides 10 percent of funding for K-12 education. Yet, with that 10 percent share, it imposes significant requirements on states and schools, forcing them to submit to federal bureaucrats. Education has traditionally been a state matter; the people closest to students know them best – parents and teachers know far more than Washington bureaucrats – and we are already witnessing remarkable reforms by state and local governments to increase school choice and resist Common Core standards. We need to restore parent and student choice and remove federal barriers to children’s success.
A Cruz Administration will eliminate the programs in the Department of Education that are wasteful, ineffective, and fail to achieve better student outcomes. We will perform a careful review of remaining programs to assess how best to return those responsibilities to state and local communities.
The lion’s share of K-12 funding will be block granted to the states, including Title I funding and the Individuals with Disabilities Education program, while the Indian Education program and Federal Impact Aid will be transferred to existing departments. Pell Grants will also remain intact and can be transferred to the Treasury Department. This will result in higher quality education, more tailored to local needs, at a lower cost.
The D.C. Public School Funding and the Opportunity Scholarship Program will persist because Washington D.C. is under the federal purview of Congress and it is constitutionally appropriate for those programs to continue to be overseen at a federal level. But those programs can be run by another department, and the Education Department can be shut down.
Ineffective Spending:
- Since the Department’s inception in 1980, the federal government has spent nearly $1.5 trillion on education.
- It cost the U.S. $151,000 per student to put the graduating class of 2009 through public school; adjusted for inflation, that is nearly three times the amount we spent on the graduating class of 1970.
- Despite this outrageous spending, education outcomes have either stagnated or declined. The nation’s report card, first administered in 1992, shows that the disparity between white and black 12th grade reading scores has increased – showing African American students half a grade further behind their peers, and totaling a nearly three grade-level difference.
Department of Energy
The Department of Energy has never discovered a barrel of oil. Instead, it actively hinders innovation and discovery as it selects “winners” – that frequently go on to lose millions of dollars, even going bankrupt – while making it harder for entrepreneurs to succeed. Created by the Carter Administration in 1977, the Department of Energy was designed to direct a national energy policy. Two years later, those directives included mandating room temperatures and distributing rationing coupons for gasoline. The Department of Energy has since caused taxpayers to fund politically motivated programs that prop up favored interests.
In August 2015, for example, the White House announced the start of the Department of Energy’s Clean Energy Impact Investment Center, an effort to raise public awareness of climate change. This program, along with the EPA’s job-killing, cost-inducing Clean Power Plan, exemplifies the ways in which the Obama Administration has used the Department of Energy as a partisan tool for furthering its agenda, at taxpayer expense.
While the Energy Department as a whole serves no critical role and stifles growth through unnecessary regulation, a few programs – such as the Federal Energy Regulatory Commission, Nuclear Defense Capabilities, and cleanup and decontamination programs –maintain our security and should be transferred to other departments.
The Department of Energy serves as a handmaid to the Washington Cartel, and rather than allow it to stifle growth through costly regulations, we should unleash the energy renaissance that will be propelled by innovators and hardworking Americans.
Ineffective Spending:
- The government does a poor job acting as a venture capitalist to finance start-ups and innovation. The 2009 stimulus bill granted $80 billion to politically preferred energy projects. Since then, Obama’s Department of Energy and other agencies have funded 33 faltering green-energy companies, including giving $553 million to Solyndra, $25 million to Evergreen Solar, and $43 million to Beacon Power – all of which have filed forbankruptcy.
- The Government Accountability Office has designated the Energy Department’s cleanup program “at high risk for fraud, waste, abuse, and mismanagement.” The Energy Department itself estimates that its cleanup program costs escalated from $180 billion to $240 billion in two years. In 2009, a project delay in Tennessee caused the cost of that assignment alone to reach $781 million.
- The Energy Department directly employs 16,000 workers and employs another 100,000 workers as contract employees; this costs each household an average of $243 per year.
Department of Commerce
It’s rare to find a policy idea that both President Obama and Heritage Foundation President and former Senator Jim DeMint support, but abolishing the Department of Commerce is one such anomaly. Former Secretary of Commerce Robert Mosbacher characterized the Department as “nothing more than a hall closet where you throw in everything that you don’t know what to do with” – an expensive repository, costing taxpayers roughly $10 billion a year. The only sure thing it accomplishes is growing the Washington Cartel and promoting special interests over the American people. We could do without such a scheme.
For decades, the Commerce Department has funded useless projects. In one such case in 1981, it funded grants to Bedford, Indiana, to build limestone replicas of the Great Wall of China and the Egyptian pyramid of Cheops. Though the project was never completed, it is emblematic of the futile expenses billed to taxpayers.
The federal government should promote free trade for all, yet the Commerce Department has favored the few. That said, there are several functions that should be retained through other departments or agencies, including the functions of the U.S. Census Bureau, the Bureau of Economic Analysis, the U.S. Patent and Trademark Office, the National Institute of Standards and Technology, the National Telecommunications and Information Administration, the National Oceanic and Atmospheric Administration, and the Bureau of Industry and Security.
Ineffective Spending:
- The Commerce Department’s Economic Development Administration has long been known as the “congressional cookie jar.” Its projects have included grants for a wine-tasting room, a conference center in Alaska, and a tourism-promotion program in the Northern Mariana Islands.
- The Commerce Department’s cronyism has long enabled politicians to fill the pockets of their benefactors: as far back as the 1960s, the Department financed the purchase of iceboxes for Eskimos and a tourist facility near a canceled West Virginia radio telescope. In November 2008, Harry Reid delivered a $2 million check to the University of Nevada for the “Harry Reid Research and Technology Park.”
- The Department of Commerce favors some companies over others. For example, it has granted crude oil exemptions only to a handful of companies over the past 40 years. In the summer of 2014, the Department granted limited waivers to only two corporations.
Department of Housing and Urban Development
Real solutions to restoring hope in American households will not come from Washington. One need only to examine the last half-century of failed “War on Poverty” programs, out of which HUD was born, to understand this. We have spent roughly $22 trillion on means-tested welfare programs since 1964, yet the poverty rate has remained virtually unchanged. Poverty goes far deeper than a person’s pocketbook. It is both material and spiritual, and the reason federal bureaucrats are so ineffective at solving it is they fail to realize that there is no subsidy – or substitute – for hope. In order to solve real poverty, we must recognize the federal government’s limited role, and return power to state and local communities who know the people in their neighborhoods, and have a direct and personal stake in finding solutions.
The Department of Housing and Urban Development has exacerbated higher housing costs for low-income communities. HUD undercuts its own goal by creating distortions in the housing market, attaching strings to its money, and imposing top-down control on local communities.
Federal housing reform is a critical part of welfare reform; rather than perpetuating poverty and trapping families in dangerous communities and under-achieving school districts, we must empower people to rise out of dire circumstances. Section 8 housing will be reformed as part of a larger antipoverty and welfare-reform agenda consistent with policies that are family-centered, opportunity-inspired, and work-focused. Programs like the Office of Fair Housing and Equal Opportunity, and veterans’ homeless assistance grants, will remain intact—they will be transferred to the Department of Justice and Department of Veterans’ Affairs, respectively.
Ineffective Spending:
- In July 2015, the Office of Inspector General for HUD discovered that the federal government provides public-housing assistance to over 25,000 families whose income exceeds HUD’s 2014 eligibility limits. Some were even millionaires. The OIG estimated that taxpayers will pay $104.4 million for the housing of these families over the next year.
- HUD has often attached unnecessary and burdensome requirements to its funding – in one instance in New York’s Westchester County, it required HUD-funded projects to have three bedrooms, though that would more than double the county’s costs from $51.6 million to roughly $100 million.
- Although the Department’s programs are ostensibly designed to help move families out of downtrodden neighborhoods, they have failed. They often confine low-income families to dangerous neighborhoods.
2. TWENTY-FIVE FEDERAL “ABCs”
The rate at which we are spending is unsustainable. And federal programs often fail to support their purported beneficiaries while instead propping up special interests. There are far too many members of Congress who willingly hand out special favors to select industries and friends.
Let’s break the Washington Cartel and restore power to the people. Let’s stop handing over billions to federal favorites. We will sharply reduce the alphabet soup of government entities, beginning with the “ABC”s that should not exist in the first place: The Agencies, Bureaus, Commissions, and other programs that are constitutionally illegitimate and harmful to American households and businesses. The following 25 ABCs are emblematic of the types of government functions I will examine, downsize, and reform to limit federal overreach. But these are just a start.
Eliminate the following Agencies, Bureaus, Commissions, and programs:
- Appalachian Regional Commission
- Climate Ready Water Utilities Initiative
- Climate Research Funding for the Office of Research and Development
- Climate Resilience Evaluation Awareness Tool
- Consumer Financial Protection Bureau
- Corporation for Public Broadcasting (privatize)
- Corporation for Travel Promotion
- Global Methane Initiative
- Green Infrastructure Program
- Greenhouse Gas Reporting Program
- Legal Services Corporation
- National Endowment for the Arts
- National Endowment for the Humanities
- New Starts Transit Program
- Pacific Coastal Salmon Recovery Fund
- Presidential Election Campaign Fund
- Regulation of CO2 Emissions from Power Plants and all Sources
- Regulation of Greenhouse Gas Emissions from Vehicles
- Renewable Fuel Standard Federal Mandates
- Saint Lawrence Seaway Development Corporation
- Sugar Subsidies
- Transportation Investment Generating Economic Recovery
- UN Intergovernmental Panel on Climate Change
- UN Population Fund
- USDA Catfish Inspection Program
3. GRACE COMMISSION 2.0
In 1982 President Reagan brought together a group of business leaders, led by J. Peter Grace, to assess federal spending levels and evaluate areas of waste and fraud. The members of the Private Sector Survey on Cost Control, commonly referred to as the Grace Commission, worked like “blood hounds,” as President Reagan described, to improve government efficiency. The business leaders’ report recommended 2,478 “cost-cutting, revenue-enhancing” suggestions, without raising taxes, weakening defense, or harming social welfare. As Chairman Grace recognized then, “every dollar we can stop spending is a dollar that the government does not need to borrow.” Never has that been more needed than today. Grace Commission 2.0 will apply business principles to government spending, and ensure civil servants are actually doing what the title suggests.
4. CONGRESSIONAL ACCOUNTABILITY:
Balanced Budget Amendment
A strong balanced budget amendment is necessary to get back to fiscal responsibility, stop bankrupting our kids and grandkids, and keep Congress accountable to the American people. As President, I will fight to finally pass a strong Balanced Budget Amendment, which limits federal spending to a percentage of GDP and requires a congressional supermajority to ever raise taxes. In the private sector, quality companies do not spend money without first budgeting for expenses, and at the bare minimum, the government should do the same – it’s necessary for our posterity, and to be good stewards of Americans’ time and dollars.
REINS Act
In 1996, Congress attempted to gain control over federal regulations through the Congressional Review Act (CRA). Since then, agencies have added 60,0000 federal regulations, and only one has been undone through the CRA. The Competitive Enterprise Institute estimates that Americans paid a total of $1.86 trillion in federal compliance cost in 2013, which averages to $15,000 of hidden regulatory cost per household each year. President Obama’s regulations alone cost an additional $80 billion annually.
The REINS Act will stop giving Congress a backdoor to expanding federal expenses without as much as a yea or nay. The REINS Act requires Congress to approve of any regulation or major rule that will have an economic impact of $100 million or more and ensure that Congress does not unlawfully delegate its authority to unelected bureaucrats. As President, I will press Congress to pass the REINS Act, and will sign it into law.
5. FEDERAL HIRING FREEZE AND REFORM:
A Cruz Administration will institute a freeze on the hiring of new federal civilian employees across the executive branch; no vacant positions at this point may be automatically back-filled; no new positions may be created; and no circumvention will be allowed through the hiring of contractors.
For those agencies in which it is determined that a vacant position needs to be filled, I will authorize the hiring of a maximum ratio of one person for every three who leave.
I will also reduce the annual across-the-board adjustment for federal civilian pay so that rather than receiving automatic yearly raises, federal workers would have more opportunities for merit-based pay increases.
The federal civilian workforce exceeds 2 million workers and costs the taxpayers more than $260 billion each year in wages and benefits. Since the 1990s, compensation of federal workers has outpaced that of private-sector workers: on average, federal workers make 78 percent more than private-sector employees.
Through natural attrition, and spending restraint, we can meaningfully downsize the federal government over time so that we are no longer bankrupting our children and grandchildren. With a commitment to the common-sense prudence that any responsible family or small business must demonstrate – and a willingness to take on the cronyism of the Washington Cartel – we can reverse the disastrous spending and debt in Washington. And a Cruz Administration will do exactly that.
