With taxes off the table, Congress searches for creative new ways to pay for government.

Mining for Dollars: With taxes off the table, Congress searches for creative new ways to pay for government.

By Danny Vinik/Politico

In July, the House passed a marquee program to fund drug research, one of the year’s most forward-looking pieces of legislation, with a huge lineup of sponsors in both parties. It would cost more than $10 billion. Some of that would come from cuts in Medicare and Medicaid: paying less for x-rays, for example, or reducing reimbursements to states for certain medical equipment.

And almost $7 billion would come from selling oil.

Yes, oil.

The bill’s top sponsors, House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Rep. Diana DeGette (D-Colo.), were getting creative. New programs cost money to operate, and money usually means taxes. But taxes these days are almost a declaration of war—so lawmakers with ambitious new plans, from health care to highways, have started to scour the landscape for new sources of funds.

Money without taxes sounds like wishful thinking, but in this age of political polarization and congressional gridlock, congressional aides and budget thinkers have started to get innovative about locating new pots of money for the government to spend without taxing its citizens.

What are these ideas? They tend to fall into a few big categories. One is running government programs by charging their users rather than the population overall; another is to cash in assets the government currently owns, like land and quasi-government entities. And there are certain pots of money, like oil reserves and untaxed overseas corporate profits, that have long been eyed by Congress, and could—in theory—be tapped to help fund new laws.

All of them have shortcomings, some political and some accounting. But a tour through the possibilities gives a sense of the range of ideas in the congressional playbook—and a menu of ideas that might just find their way into a budget deal between President Barack Obama and congressional Republicans.

PERHAPS THE BIGGEST family of idea is user fees. The federal government already charges people all kinds of fees. Many are quite small—you might pay $15 admission to a national park, or 47 cents for a stamp. Others are huge: A drug company pays more than $1 million to apply for a new-drug approval. Ranchers pay to allow their livestock to graze on federal lands; drivers pay 18.4 cents per gallon of gas, whether they know it or not, to fund federal highway maintenance. In theory, user fees are supposed to ensure that those who benefit from certain government programs pay for them. There’s an element of fairness that appeals even to conservatives: Drivers, roughly speaking, pay for highways to the extent that they use them. But in practice, user fees can end up as a bit of a slush fund for government, which is actually less fair than a normal tax: The Murray-Ryan budget deal, for instance, raised airline fees as a way to offset sequestration overall, so air travelers found themselves subsidizing a whole swath of domestic programs.
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Creating new fees is also an option. The administration’s proposal includes a number of new fees, including a $2.50 charge that livestock producers would have to pay per head per month for cattle to graze on Forest Service lands and a new administrative fee from the Federal Housing Authority. (The revenue generated from these fees would be tiny—$15 million per year from the grazing fee and $30 million per year from the new FHA fee.)
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IT MIGHT BE unthinkable to privatize the Pentagon, but there are plenty of ways the U.S. government could spin off agencies for cash. The most attractive, for many people, are company-like assets such as Amtrak and the Tennessee Valley Authority.

MORE of a long but interesting read of Privatization Proposals at........

http://www.politico.com/agenda/story/2015/10/federal-government-funding-tax-alternatives-000279