However, it's true that liberals have an obligation to lay out their ideas for long-term deficit reduction, as they criticize the right for being deficit peacocks and hypocrites. With that in mind, here goes:
- Let the Bush tax cuts expire. That means all of them.
- Draw down troop levels and aid in Iraq and Afghanistan. Rethink our commitment to stationing so many troops in places like Germany and South Korea.
- Take a long, hard look(PDF) at the defense budget. Do we need a new SSBN? What about those cost overruns on the DDG-1000 program? Ditch the MV-22. Stop getting involved in insurgencies. There's much more. The report in the first link has a bunch of good ideas.
- Close the carried interest loophole, reinstitute and expand the estate tax, put capital gains taxes more in line with income taxes. Stop legislating through the tax code. There's definitely more reform in the tax code that's possible and needed. I'm not familiar enough with the issues to make specific recommendations there.
- Get rid of the mortgage interest deduction and the employer health insurance deduction.
- Get health care costs under control. Start moving away from a fee-for-service model in the health care sector. Massachusetts is looking at this, and it already works at the Mayo Clinic. There are some promising pilot programs in the ACA, and as we see how they work, they can be ramped up or shut down as appropriate. Ensuring that death panels are fully insured would help.
- Reduce or eliminate crop and corn ethanol subsidies.
- Means-test Social Security and Medicare. Sorry, but if you've got a really nice pension or a massive 401k the government shouldn't be on the hook for your retirement pay. As Andrew Sullivan put it, SS and Medicare should be billed as social insurance against poverty in retirement, not as guaranteed benefits.
- Raise the cap on payroll taxes for the aforementioned entitlement programs.
- Raise the gasoline tax by at least $0.50/gal.
- Put a price on carbon, either through a tax or cap and trade system.
- Reform public employee pay. Move from a benefit-heavy, salary-light structure to one in which employees are given better pay, but have fewer legacy costs. No, conservatives, public employees are not paid better than private sector employees.
- Raise taxes on junk food, soft drinks, alcohol and tobacco. If you're going to abuse your body and cost the government hundreds of thousands of dollars through Medicare later in life, you can start paying for it now.
- On a local level, institute congestion pricing in major metropolitan areas.
- Invest in IT infrastructure for the federal government. A small amount of money now could enhance productivity and save lots of money in the future.
- Abolish the Senate. (Just kidding.)
At the end of the day, health care costs are still the number one driver of our structural deficit problem. If we get those under control, we get our deficits under control. Now let me get Doug Elmendorf on the phone, and I'll let you know if I managed to balance the budget with all that...
Edit to add: In the short-term, the absolute best way to get deficits under control is a strong economic recovery. Fewer people on medicaid and unemployment and who are instead paying taxes would take a huge burden off the books. But nobody seems to care about that...