The United States desperately needs a temporary compromise in order to avoid falling off the fiscal cliff for which I propose a 4-stage plan and strategy to address their immediate fiscal issues. The thrust of this solution is founded on a problem solving approach that would meet the needs of a bipartisan strategy and would also resolve the impasse resulting from divergent political values and doctrines.
The 4-stage plan includes:
STAGE 1: An immediate agreement to temporarily extend the Bush tax cuts in exchange for temporary relief in the debt ceiling until more permanent measures can be obtained. This agreement would be contingent on a strict timeline for development of a comprehensive and detailed plan and strategy for resolving fiscal issues before the U.S. Federal Government. The timeline would not be allowed to exceed the period of the first two fiscal quarters of 2013 and would be managed in such a manner as to minimize additional debt load. The agreement would also be contingent on a consensus view of the basic means and criteria to be addressed in Stages 2 to 4 of the Strategy. These issues include the following:
(a) Exploration of measures to restructure the existing and projected Federal Government debt loads through means such as debt swapping of interest bearing instruments;
(b) A commitment to review and prioritize essential, preferred, and optional budgetary expenditures;
(c) Immediate restrictions on strictly non-essential overtime expenses provided in the exercise of government services;
(d) Immediate restrictions on contract-letting to non-government third party organizations for non-essential services;
(e) An agreement to develop and overhaul the U.S. Tax Code with a view to establishing tax fairness with minimal impact on the business community.
(f) A commitment to priority areas of government spending, including social security, health care, military, judicial, educational, infrastructure, etc., which should include exploration of viable options for improved means of funding as, for example, may be gained by access of the Federal Government to market-place investments.
STAGE 2: A commitment to provide a detailed Level 2 and 3 Plan to develop recommendations for Items (a) through (f) of Stage 1. This Plan would be developed by the bipartisan House and Senate Committees in close consultation with the Treasury Secretary of the Administration. A firm commitment is required to develop the Level 2 Plan and submit it to Congress before the end of the 2nd Quarter, Fiscal Year 2013. The detailed plan must specify and distinguish those actions that may be taken immediately to address pressing fiscal policy issues, and those actions needed to address long- term structural issues in the fiscal planning.
STAGE 3: A commitment to pass legislation by the 3rd Quarter to take the immediate actions identified in Stage 2. The timeline should be coincidental with the expiration of the extended Bush tax cuts, and the extended relief of the debt ceiling provided in Stage 1.
STAGE 4: The passage of a bill to overhaul the U.S. Tax Code to address the long-term structural fiscal issues optimizing for both the prioritized government services and investments, as well as to spur and secure continued health and robustness in the U.S. Business Sector.