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Federal (Including Military) Spending Per Household = $29,043 in F2010
Federal Entitlement Spending Per Household = More Than Half ($16,670)

F2010 USA Inc. Expenses =
$3.5T

[Pie Chart Data]
Net Interest Payment $196B 6%
Social Security $707B 20%
Medicare + Federal Medicaid $724B 22%
Unemployment Insurance + Other Entitlements $553B 16%
Defense $694B 20%
Non-Defense Discretionary $431B 12%
Discretionary One-Time Items $152B 4%

F2010 USA Inc. Expenses Per Household = $29,043

Entitlements $16,670
Social Security $5,939
Medicare + Federal Medicaid $6,087
Unemployment Insurance + Other $4,644
Defense $5,828
Non-Defense Discretionary $3,619
Discretionary One-Time Items $1,277
Net Interest Payments $1,649

Note: Non-defense discretionary spending includes infrastructure, education, law enforcement, etc. Discretionary one-time items includes TARP, ARRA, and spending on GSEs. Source: White House Office of Management and Budget, Census Bureau, Bureau of Economic Analysis.

KP
CB
www.kpcb.com
USA Inc. | What Might a Turnaround Expert Consider? 333

At a High Level, With Focus on Improving Operating Efficiency,
USA Inc. Might Consider Ways to Do Things Like…

• Consider empowering an independent / 3rd party auditor with expertise in government operations around the world / corporate turnarounds to conduct a broad-ranging audit of USA Inc.’s operations.
• Restore strong rules for budget process: Require annual budget resolutions and reconciliation; PAYGO* to limit spending, enforce annual appropriations process consider biennial budgeting.
• Consider giving the President ‘line-item’ veto / rescission authority.
• Empower commissions analogous to the military base closing panels to review and consolidate government functions and agencies, as well as aid to State and local governments.
• Seek flexibility to manage performance and terminate poor-performing Federal employees.
• Develop flexible / long-term compensation plans including bonus payments for Federal employees when annual budget deficit reduction goals are met.
• Privatize government real estate and other assets with little use, expanding on current efforts to trim $3 billion in government-owned real estate.
• Identify additional opportunities to increase public/private investment, management and operations to drive innovation and investment in infrastructure

Note: PAYGO is the practice of financing expenditures with funds that are currently available rather than borrowed.
Source: KPCB and Alvarez & Marsal Public Sector Services, LLC.

KP
CB
www.kpcb.com
USA Inc. | What Might a Turnaround Expert Consider? 334

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