Despite projected federal government spending exceeding $50 trillion over the next 10 years, the so-called "super committee" has failed to reach an agreement on cutting our anticipated federal deficit by a mere $1.2 trillion. As long as charting economic policy is defined as a choice between spending cuts and higher taxes, our two competing political regimes will never find common ground. We would do better to redefine the issues: what should be the amount and composition of federal spending? How should we finance it?
Our country was founded on the principle of limited government as guarantor of freedom and economic opportunity. I think that both sides could agree (one grudgingly) that the private sector operates more efficiently than the public. The public sector may be the guarantor of economic opportunity, but the private sector is the creator. All things being equal, the economy will grow faster with a greater share of national assets deployed in the private sector.
On the other hand, both sides could agree (the other equally grudgingly) that taxation in America should be progressive; those with the ability to pay more should do so. There is no need to debate the "fairness" of this. It is "settled science" for Americans; it has been the basis of our tax code for the better part of a century in good times and bad, through Republican administrations and Democratic.
There is presently a lot of squawking about the top 1 percent. Apparently, many think this group should pay an even higher share of taxes. Perhaps they should (as they have in the past), but it would in no way mitigate the real source of our discontent: an economy that is not growing fast enough to produce jobs or an increasing standard of living for the American middle class. Debating tax policy now is putting the cart before the horse. The real issue is what the government should be doing. Then we can worry about how we should pay for it.
The federal government is a much-abused, 222-year-old monopoly. It suffers like most monopolies from the cumulative effects of a lack of competition and accountability. It has been poorly led and managed by a self-interested political caste in collaboration with narrow special interests. The result: much of what government does, it shouldn't be doing. Much of what it does, it doesn't do well. Much of what it does is contrary to the interests of the majority of Americans. Small wonder less than 15 percent of Americans have confidence in it. Instead of debating how to finance the government, we should concentrate on fixing it.
I believe that we should conduct a top-to-bottom restructuring, subjecting every department, agency, and program of the federal government to two tests: first, we should limit the federal government to doing only those things consistent with its constitutional powers that the private sector can't do, won't do, or we wouldn't trust to do; second, whatever the government does, it should be subject to the same standards as all other organizations -- efficiency, effectiveness, and honesty. Quite simply, we need a government that does the right things and does them well.
There would be little difficulty achieving consensus for greater progressivity in the tax code if all Americans, particularly those who are benefitting most, had confidence that their tax dollars were being spent wisely in support of a stronger, more prosperous economy for all.
Al Checchi is chairman of Join Together America, the former chairman of Northwest Airlines, and a former candidate for Governor of California. His new book is The Change Maker.