FY 2015 Budget (Passed)

[Lumine]

Well, first of all, I apologize for the delay, I spent too many days trying to determine the extent of the deficit and new expenditures of Atlasia, and in the end it was evident that I was not going to be able to get the actual sums. As a result, I have sent this incomplete proposal so I can work with the Senate in order to get a budget passed.

In terms of spending it has become way too evident that we engaged on a massive spending spree through 2014 without caring for the consequences, and that puts us at a major problem when it comes to this budget, because we have literally no idea of the spending involved in the Duke-Scott education bill and whether the new Healthcare system will reduce costs (although I hope it will), not to mention all the other spending projects.

It was a campaign pledge of mine to raise military spending and I have done so in a measured way (which means that I have no intention of signing a budget without a significant increase here), something that I also did with international affairs and with the NASA budget (which is ridiculously low when compared to OTL United States), and to compensate for those raises I propose minor spending cuts in all substantial areas in the order of $1-2 B, which will enable us to reduce a potential deficit without causing major harm to most areas of spending.

Needless to say, I consider TNF's amendment unworkable and hostile.

[Lumine]

I will oppose any increase in military spending and will make delay any attempt to do so insofar as possible, by any means necessary.

Well, then we might as well throw away any remnant of realism from the game. It's ridiculous to pretend we can carry on with the current levels, much less slash them again in half as if having a military was pointless and unnecessary.

[Lumine]

Working on it right now, and I'll have a proposal soon enough! (I manged to get an estimate for the Duke-Scott bill, I am going through Health Care costs now)

[Lumine]

You must be logged in to read this quote.

[Lumine]

Alright, I'll be honest: the situation is very complicated. I managed to calculate some of the extra expenses, but there's a point in which I can't find a way of calculating the Health Care expense without a GM estimate, and I have failed in discovering the effect of Nixcome as well. Thing is, with the new spending and the lowering of the Payroll Tax from 8% to 6.1% (Note: I had to include that change in the budget, the initial proposal neglected this already enacted change) there is an effective gap to be filled, and with the situation starting to stabilize after the civil conflict I do not thing it's in the interest of anybody to continue fiscal irresponsibility and allow a big deficit nor I do think it's a good idea to just keep raising taxes in the hope that it will solve our economic woes.

What I am going to propose is not going to be popular, but I feel is in the interests of all of us that we lower spending in the form of minor cuts across most of the different areas (with some exceptions, like the minor raise I ask for defense spending and other areas which would be risky to cut). Likewise, I will also propose minor increases on certain taxes in order to fill the gap without unfairly burdening a specific sector. I have assumed that the new Health Care system will lower the expenses, and I have proposed minor spending on this area because I believe the reform will lower the expense and to account for the losses in the payroll tax.

Thus, my attempts at reducing spending (to a level that some might find unacceptable, I know), and assuming a flat $1000 B for Health Care and a similar debt expenditure than 2013-2014 we would be looking at spending levels that are about $13-14 B lower than the Averroes Budget, with the advantage that we would cover most of the extra spending and things like the Duke-Scott Education bill, thus allowing us to focus the tax raises and make them less pronounced to cover up the loss of revenue. I decided not to raise the bottom and top Income taxes because in the first case I don’t believe it’s a good idea to raise the taxes on this group and regarding the second it has already been pointed out that 60% is already a high rate (although lowering it means a bigger deficit). I also refrained from experimenting with the creation of more brackets on the income taxes for the time being.

[Lumine]

I'm trying to be pragmatic in the sense that spending has to be cut and I prefer the cuts to be small instead of causing major harm, but what cuts would be agreeable to the Senators who have objected?

[Lumine]

So, if I still may, these are the cuts as I understand them. Please correct me if I'm wrong:

4B - Military Retirement
2B - CIA
0.3B - various NR&E points
6.64B - Farm subsidies
1B - Highways
1B - Air Transport
0.61B - Community and Regional Development
2B - Elementary and Secondary Education
2B - Universities
+35B - Duke Scott & Universal Education
2.2B - Unemployment Insurance
11.4B - Elderly Insurance
2B - Housing Assistance
2.58B - Food Stamps

Are those cuts made from the Nix budget, or from a previous proposal?

More or less, yes, and most are made from the Nix budget. The exception would be transportation, which I believe was in my initial basic proposal.

I'm actually supportive of Bore's amendment, and I am happy to see most of the cuts retained. I'm not sure if I am the actual sponsor here since I'm not a Senator, but the amendment is mostly friendly for me.

That said, I would like to see the possibility of increasing the NASA budget (I believe it's far too low if we can to get more ambitious things done in that front), and, if the proposal raises enough revenue, reverting some of minor cuts in the international area. I'm not sure if Bore's proposal actuall raises the Healthcare Payroll tax back to 8%, but if that was the case then the situation may not be as nearly as complicated.

[Lumine]

I must say I actually think Bore's proposal is better in some aspects, especially given that our Financial Transaction Tax is already high by OTL standards and increasing it might not be a good idea. Likewise, why does it say that spending is actually increased despite the cuts? Is that a typo?

[Lumine]

I wanted to lower taxes during my presidency but we just can't afford to do it with all of the programs we have in atlasia.

My tax plan was pretty much dead on arrival, but I mainly introduced it for the debate more than anything. I couldn't let the senate stall on my watch.

And yeah, my education bill didn't help but I felt it implemented some necessary changes.

All in all, I think we are really going to need to change the way we all deal of economic policy, since we had to wait until the budget to see the negatives of programs that looked fantastic and easy to support on paper.

I am concerned about increasing the number of brackets and that it could add to the complexity of the tax code.

Trust me, so was I. But I don't see any other way to make the system more progressive without significant cuts to spending to account for lost revenues.

Well, another alternative comes forward if we are able to get an estimate on the effects of the Health Care Reform (I just couldn't find the right data myself), as one of the arguments we put forward was that it could reduce the high spending that the old system meant. I chose to propose a trillion for Health Care as a very conservative estimate, but it the effects were more positive than originally thought we could reduce enough spending to reduce some of the changes in the tax code. 

[Lumine]

I wanted to lower taxes during my presidency but we just can't afford to do it with all of the programs we have in atlasia.

My tax plan was pretty much dead on arrival, but I mainly introduced it for the debate more than anything. I couldn't let the senate stall on my watch.

And yeah, my education bill didn't help but I felt it implemented some necessary changes.

All in all, I think we are really going to need to change the way we all deal of economic policy, since we had to wait until the budget to see the negatives of programs that looked fantastic and easy to support on paper.

I am concerned about increasing the number of brackets and that it could add to the complexity of the tax code.

Trust me, so was I. But I don't see any other way to make the system more progressive without significant cuts to spending to account for lost revenues.

Well, another alternative comes forward if we are able to get an estimate on the effects of the Health Care Reform (I just couldn't find the right data myself), as one of the arguments we put forward was that it could reduce the high spending that the old system meant. I chose to propose a trillion for Health Care as a very conservative estimate, but it the effects were more positive than originally thought we could reduce enough spending to reduce some of the changes in the tax code. 

The savings are not as great as they could have been since all five regions are functioning as a monopoly right now since none took the step to allow competition. Not even the IDS, though we were coming close before Scott departed from our midst.

In your opinion, Yankee, would it be feasible to lower the spending in Health Care to, say, 950 or 900 billion on the assumption that the system would be saving us that much money? If so, then I woul propose an amendment to lower that amount so we can reduce some of the tax increases for at least the middle class, and I think we would have a balance acceptable to at least a majority.

[Lumine]

Thank you, Yankee!

Now, the reasoning behind this proposal is to conciliate the fact that a more progressive tax system is going to pass either way with the concern that some of the tax rates might be too high or might not benefit some sectors of the population, so the idea here is to follow the premise of a much cheaper Health Care System by lowering its spending to 930 billion, with the only new expense being the expansion of the space program (which is still believe is key for the future). All in all, we save 64 billion in spending and we reduce it to 30 billions or so lower than the Averroes Nix budget despite this year's increases.

I still lack expertice when it comes to tax rates, but I have cancelled the raise of the Financial Transaction Tax, corrected the mistake in the Health Care Payroll tax (the formal change to 6.1% to 8% lacked the proper symbol) and lowered most of the income taxes by 1% per bracket with a few exceptions.

You must be logged in to read this quote.

[Lumine]

Alright, I understand that there are major concerns with this, and finding a common ground is certainly in the interest of all here.

I guess my main questions for the opposed Senators are, what type of cuts could you support when it comes to health care spending? And, what tax cuts (all of this based on the current Polnut amendment that was adopted, not mine) would you consider and for which brackets? I'd like to think we could at least make some advances in that area.

[Lumine]

Well, I would like to propose another amendment that most of the Senate can support, so I ask again:

What type of cuts could you support when it comes to health care spending? And, what tax cuts would you be willing to consider and for which brackets?

[Lumine]

Military spending cuts are, in my view, out of the question because the current spending levels are way too low, hence why this budget includes an increase in that area (that will end up being lower than intended). The reason why I propose Health Care is because the 2014 reform was aimed at reducing the costs and the expenses that area meant, hence why I think the cuts would not be as damaging as some predict.

I would like to send a new proposal, reducing the proposed cuts from 60 billion to 25, lowering the proposed increased in the space budget in my last proposal, keeping the current Financial Transaction Tax and a small tax cut for the second and the third bracket.

You must be logged in to read this quote.

[Lumine]

By the way,
Would it be possible to have an estimation of the revenue?

Well, I have requested the help of the Game Moderator on this, I hope to have an answer soon. 

[Lumine]

Lumine, you are going to need to find someone else to offer any subsequent amendments. If I can get on again before Monday, it will be a miracle.

Understood, Yankee, and thanks for all your help. I am still waiting on an answer from the GM, and I will not offer any further amendments until then.

[Lumine]

The GM is still working on the numbers with the Deputy GM (I believe he stated so in his office), so we will have to wait a couple more days for us to get the idea of the actual revenue we are going to have with the current version.

[Lumine]

A motion to table? I would sincerely ask the Senate to reject such a motion, the least thing we need is to delay this for an unknown number of weeks because of what the Senator believes is a lack of compromise. And I resent that idea, because I have tried my best to conciliate my own views with the views of the Senate, and indeed I have already asked what would be acceptable for a majority of them in certain issues.

I have sent a message to Barnes given that he is still Deputy GM regarding the numbers and if there was a chance of him releasing them. I am willing to pass a budget and concede the fact that tax reform might not be possible given the limited time we have, but passing one without knowing what the revenue is would be, in my opinion, too irresponsible.

[Lumine]

Right, I have talked to Barnes and he does have some revenue numbers (although not all of them) and I have asked him to send. Once I have them I'll present them to the Senate, and I guess we'll decide from there, depending  on whether we have a GM nominee. I should note that one Atlasian has indeed showed interest in the the position, so there's hope!

I also fully support Windjammer on raising marijuana and alcohol taxes, and I believe it's a far better idea than to just raise taxes on the higest bracket without any concerns.

[Lumine]

Right, I've spoken to Barnes, and this what we have:

Cynic started work on the Income and Corporate taxes, and while he gave an initial estimate the truth is that said numbers are somewhat different that the Averroes Budget (Edit: I changed the phrasing here, it didn't sound good):

You must be logged in to read this quote.

There also other estimates that were unable to be finished, although I would like to note that  since the Health Care Payroll Tax was raised again to 8% then we should get a very similar number than the 2014 one ($853.4 B).

You must be logged in to read this quote.

[Lumine]

So with the financial transaction tax, we now have 50 Billion more?

So I guess we're not in deficit?

Well, given that the earlier work was based on reducing spending as much as possible (or at least as much as the Senate and the Administration could support), and since we have raised some other taxes (Gas, Marijuana, Tobbaco and Alcohol) then that assumption is plausible.

If I may address the Senate briefly:

I was collaborating with Cynic to create the budget numbers when the recent events transpired.  I can confirm that the numbers presented by the President are the numbers that I forwarded to him following Cynic's resignation. 

Since I am not the Game Moderator, it would be inappropriate for me to develop these numbers any further on my own.  I will, of course, be happy to assist Kalwejt once he is confirmed as GM, and I will also offer assistance to the Senate if you deem it necessary.

I thank you for your attention.

Thanks for the assistance, Barnes! If I may ask, could you provide us with your opinion on Cynic's numbers regarding the Health Care Payroll Tax, the Gas/Tobbaco/Alcohol taxes and the Oil Spill Protection?

[Lumine]

From my point of view that amendment is unfriendly. It's pretty clear the goal there is less focused on actual spending reduction and more focused on a political attack on the Justice Department. These cuts, especially the gutting of Federal Law Enforcement, are bound to hit the Federal Government very hard when to comes to reacting and preventing critical situations.  

Furthermore, how can we actually be sure that the Justice Department is "grossly over-funded"?

[Lumine]

Ah, so we should just cripple an entire Department because you and others don't like that Zuwo and Rpryor are trying to enforce the laws of Atlasia? Brillant logic, I must say.

[Lumine]

There are reasonable doubts on the actions of the former President, the Justice Department has found them compelling enough to act, the Supreme Court has allowed the case to move forward, and a jury will decide, period. I find it rather surprising that a situation like that would be enough for people to wish to cripple our Justice Department.

[Lumine]

I would appreciate it if we could keep this outside the budget discussions and on the appropriate thread, so I will just note that putting words on the mouth of the Supreme Court is certainly an accurate, honest and brilliantly persuasive line of argument.