The key points of the 537 Accountability PACT

Our elected leadership-537 men and women-is dysfunctional. We are lurching from manufactured crisis to manufactured crisis, with less time between each preventable looming disaster. Unless our elected leaders change their ways, one day a manufactured crisis will blow up into a real one, and the consequences will be uncontrollable. The 537 Accountability PACT is designed to resolve these manufactured crises sooner, or prevent them from happening in the first place.

The 537 elected leaders of our country form a permanent political class. As such, their actions are not directed toward the greater health and wealth of the nation, but rather to ensuring that they maintain or grow their political power. They are largely exempt from the law. By April 15th of every year, for example, citizens are supposed to have paid their taxes, and each Chamber of Congress is supposed to have passed a budget resolution for the following year. Citizens face fines for not filing taxes. Congress members face...nothing for not passing a budget.

The 537 Accountability PACT is designed to have our 537 elected leaders bear the burden of the policies that they implement, and be rewarded for the positive outcomes their policy choices yield. The PACT contains both carrots and sticks. Some examples of the sticks are below:

• Every elected member pays a base tax rate equal to the rate of Federal spending (including unfunded mandates) as a percent of GDP. No deductions, exemptions, etc. This base rate is paid on all income, including spousal, tax exempt, etc. The reason for this is simple: Under our progressive system of taxation, the 537 should already be paying at least this amount if the budget is going to balance. Consider President Obama: in 2011, the government spent about 24% of GDP, while President Obama paid less than 20% of his gross income in taxes. Simply put, not even the President paid his fair of taxes. By setting a base tax rate equal to the amount the government spends, our leaders will be motivated to ensure that every dollar is spent wisely.
• Every elected member pays a marginal rate that is equal to the maximum rate that any citizen faces through a combination of federal tax and benefit phaseouts. This would be at east equal to the combined highest income tax and Medicare rate, but may be much higher. This should lead to tax code simplification and a comprehensive approach to our benefits system.
• Elected members face a surtax if the budget process, tax rates, and any required debt ceiling increases are not passed in a timely manner. Members may also face a surtax for missing other legally mandated deadlines that are not budget related but are important to a well functioning government. Deadlines are not changed; rather, an enforcement mechanism is added to existing deadlines.
• Elected members face a surtax for an out of balance budget. If they voted for an out of balance budget or for a debt ceiling increase then they pay a higher surtax. A portion of this latter surtax carries into the future. We will be paying interest on the debt forever; those who vote to burden us with this debt should pay for it over time as well.

As mentioned earlier, the PACT also offers carrots. Bonuses are awarded for on-time budgets and surpluses, and these bonuses compound. Furthermore, increased pensions will be granted if the budget is in surplus over a Members' term of service.

The bonus system is integral to the 537 Accountability PACT. Once a bonus has has been awarded for a few years, the compounded bonus will be a significant percentage of base pay, and failing to get the bonus will result in a large cut in pay. Thus, the 537 will be very motivated to continue the good practices that have earned them the bonus over the previous years.

Our elected leadership is dysfunctional, and the result is high unemployment, large deficits, low growth, and the financial health of the company in jeopardy. Implementing the 537 Accountability PACT will reduce the turmoil and get the 537 focused on fulfilling their legally mandated duties on time. The result will be a more stable, better governed, and more prosperous America.

For more detailed explanations of the 537 Accountability PACT, please read the other posts. They include more more in-depth information than the brief overview above.