Spending in our Collaborative Democracy

Now that we understand how federal budgets are made and how the federal government faces an "unsustainable fiscal future" according to the GAO, we must look next at how government spending would work in our Collaborative Democracy.

In our Collaborative Democracy, there would be no annual federal budget for discretionary spending. The budget for each government department or agency would remain the same as the previous year, except possibly for a cost-of-living or inflation adjustment. A department or agency budget could only be increased by the people through a solution to an issue using the democratic solution process. However, a Federal Council could reduce costs through operational efficiency improvements and voluntarily lower their budget.

Issue solutions that lowered the spending in a government department or agency would lower its budget by that amount when implemented. Likewise, the budget would be increased by the implementation of any solutions that allotted additional funding. As you recall, each solution must include the source of funds to pay for any cost increase. This new form of participatory budgeting is built into the democratic solution process, putting the citizens in charge of federal spending.

Budgeting for projects

The solution to an issue might be a single project with a limited duration. For example, many of the infrastructure upgrades are one-time expenditures. Most of the Covid-19 expenditures were one-time as well (hopefully). Project-type solutions would allocate a single amount of funding to the respective department or agency for that project for a limited period. The department's operational budget would remain the same and the special project would have its own budget to provide for transparency and tracking.

There would be no cost-plus projects without a maximum cap. If a project were projected to run over the cap limit, a new issue would be required for the people to decide to spend more to continue the project. This would help control perpetual cost overruns for unrealistically bid projects, or at least give them attention. Perhaps if bids and proposals were transparent, thousands of citizens who were experts in project management and others expert in the specific industry would review the proposals and prevent many of the continual cost overruns.

Annual deficits affecting the national debt

Due to their perpetual budget, each department and agency would be stable and would continue operating as is until changed by issue solutions from the people. As there are no effective limits on spending currently in place, at the outset of our Collaborative Democracy there would be none. Each increase or decrease would come from a solution decision by the people for a specific issue. Every solution would list specifically what would be reduced or defunded if the issue lowered the budget. Likewise, increases would be specific with measurable success targets. The solution decision, its cost, and its impact would be clear.

If the combined spending total for the government were more than the tax and other government revenues for the year, the Fed would issue securities as they do now to cover the deficit, increasing the national debt. If the combined spending were less, the national debt would be paid down.

If the national debt continued to increase unsustainably, any member of a Federal Council or a citizen could submit an issue to reduce spending on something specific to help lower it. Citizens would likely increase spending in some areas and reduce it in others.

Reducing spending while improving results

For many years, I optimized business processes for large corporations as a consultant to make them more efficient, typically achieving 35% or more in operational savings on those processes. (Of course, I chose my projects carefully, analyzing areas of opportunity to identify those with the most potential.) Dr. Mikel Harry of iSixSigma estimates that there are 250,000 to 350,000 other similarly trained Six Sigma Black Belts working for US organizations. [19] Many of them are Lean experts as well. I can envision an army of volunteer citizen process experts working hand-in-hand with Federal Councils to produce savings by optimizing processes and removing waste. That would be the power of citizen owners and self-rulers collectively making our country a better place. It might be possible to produce sufficient savings to fund other areas where needed while reducing the deficit and the national debt.