Cut, Cap, and Balance – It’s What the Cool Members of Congress are Doing

The nation is plagued with a $14.3 trillion debt and a deficit that exceeds $1 trillion.  This is happening as the country struggles to emerge from one of its worst economic downturns in history.  Just as any household that is faced with economic woes, Congress should cut (spending), cap (spending) and pass a balanced budget amendment.

Cut: The first order of business needs to be spending cuts.  The federal budget is bloated with unnecessary and wasteful spending, and there are plenty of recommendations to cut spending.

Let’s start with the Congressional Budget Office (CBO), which detailed a number of spending cuts in its March 2011 report, “Reducing the Deficit: Spending and Revenue Options.“ The cuts are broken up into three categories: Mandatory – savings would total $29 billion in one year and $590 billion over five years; Discretionary (Defense) – savings would total $10 billion in one year and $178 billion over five years; and  Discretionary (All Discretionary Activities Other Than Defense) – savings would total $13 billion in one year and $147 billion over five year.  All told, savings would exceed $900 billion over five years.

Budget Committee Chairman Paul Ryan (R-Wisc.) offered his plan, “The Path to Prosperity: Restoring America’s Promise” which cuts $6 trillion in spending over the next decade.

Even President Obama offered some spending cuts.  On February 14, 2011 President Obama released his fiscal year (FY) 2012 budget he estimated a total spending level for FY 2012 of $3.7 trillion and a deficit of $1.6 trillion.  In conjunction with the budget, President Obama released his Fiscal Year 2012 Terminations, Reductions, and Savings list which outlines $33 billion in potential spending cuts.  While there are some good recommendations to cut spending, the total amounts to less than one percent of the $3.7 trillion budget and it fails to address entitlement spending, which is projected to be 64 percent of the budget.

Cap: It is imperative that spending be capped at 18 to 20 percent of gross domestic product.  It is also critical that those caps are enforceable.

Balanced Budget Amendment: The Holy Grail of fiscal policy, a Balanced Budget Amendment (BBA) will force Congress to keep and maintain a balanced budget.  The key to a BBA is to make sure that Congress will balance the budget with spending cuts rather than tax increase that is why any BBA should require a two-thirds vote in both chambers to raise taxes and a three-fifths vote in both chambers to raise the debt limit.  And, any BBA should require the President submit a balanced budget to Congress each fiscal year.

America is going bankrupt and cut, cap, and balance are 3 easy ways to get back to fiscal sanity.  The Taxpayers Protection Alliance urges everybody to go to http://www.cutcapbalancepledge.com/index.php to sign the pledge.