Reader Opinions:

How Should We Defeat the Debt?

Our national debt is growing by more than $1 million every 30 seconds. This rapid debt accumulation means serious personal consequences for you and your family.

There's no shortage of suggestions on how Congress can tackle our country's debt crisis. We've listed some of the popular ideas below. Let us know what you think by rating them up or down.

Submit ideas of your own here. Or, let your Representative know what you think.

Increase the Federal Tax on Motor Vehicle Fuels

The federal government currently levies an 18.4 cent tax on each gallon of gasoline you purchase for your car (unless it’s diesel fuel, in which case the tax is 24.4 cents). The Congressional Budget Office estimates that raising the tax on gasoline by 50 cents per gallon would bring in $600 billion in additional revenue in the next ten years. However, it would also raise the cost of a 10-gallon fill-up by $5.

Increase Pension Contributions for Federal Employees

Most federal employees have three separate retirement accounts: a 401K-style plan, a federal pension, and Social Security. One recent op-ed from progressive think tank Third Way estimates that, for each $1 a federal employee contributes to their pension account, taxpayers contribute $14. Some have suggested increasing federal employees’ contributions to their own pensions as a way to reduce taxpayer liability and the national debt.

Allow Only Select Bush Tax Cuts to Expire in 2011

Some proposals suggest letting the Bush tax cuts expire for those individuals in the top two tax brackets. That covers individuals currently earning ~ $171,000 or more, and families earning ~$209,000 or more. Opponents point out that individuals making $160,000 or more already pay 60% of all income taxes.

Allow All Bush Tax Cuts Expire in 2011

Some have argued that the tax cuts President Bush enacted in 2001 and 2003 should be allowed to expire. Allowing tax rates to return to their pre-2001 levels would mean a tax increase for Americans of almost every income level.

Replace Medicare with a Private Choice Program

Representative Paul Ryan has proposed an alternate form of Medicare for Americans currently age 55 and under. The federal government would provide eligible seniors with a voucher to put toward their medical expenses, instead of reimbursing medical providers directly. Low-income Americans would receive a larger voucher than wealthy Americans.

Increase Age of Medicare Eligibility

Currently, seniors are eligible for the Medicare entitlement at age 65. Due to the retiring members of the “baby boom” generation, the cost of Medicare is projected to double in the next ten years. Some have suggested increasing the age that seniors are eligible to receive Medicare.

Freeze Hiring of Federal Employees

Jobs with the federal government have typically been viewed as “recession proof;” they’re one of the few employers that keep hiring new employees during an economic downturn. But growth in the size of government also means growth in its cost. Legislation like the Federal Workforce Reduction Act would freeze hiring for all but those deemed essential government employees.

Shrink the US Military

In 2009, the US spent about $700 billion on national defense. There have been a wide range of proposals to either shrink the size of the military, or to shrink the amount of money the military spends on defense goods (think: airplanes or ships). Some reports have raised concerns that too steep a decline in military spending could put our national security at risk.

Freeze Federal Spending at 2007 Levels

A total spending freeze would require setting an acceptable level of government spending in advance, and then adjusting spending on all federal programs to meet that level. One Senator has put forth a plan to freeze all federal spending at 2007 levels; others have suggested freezing all federal spending other than entitlement programs (e.g. Medicare and Social Security).

Institute a National Sales Tax

Commonly referred to in news stories as a Value Added Tax (VAT), a new 10 percent national sales tax would be paid to the federal government by businesses and ultimately passed on to consumers through higher prices. In some European countries, for instance, restaurant patrons see the VAT reflected in the final total on their bill.

Increase Social Security Taxes

Americans contribute a percentage of their paycheck to fund the Social Security entitlement. Only income up to $106,800 is currently taxed. Some have proposed amending this tax so that it applies to all earned income.

Raise the Social Security “Retirement Age”

Americans born between 1943 and 1954 are eligible for full Social Security benefits starting at age 66. The “retirement age” rises gradually to 67 for those born after 1954. Republican and Democratic legislators have suggested that a further increase in the retirement age would reduce Social Security’s fiscal burden on future generations.