« BACK  |  PRINT

RS

EDITOR OF REDSTATE

Cut, Cap, and Balance

By: Erick Erickson (Diary)  |  May 27th, 2011 at 02:36 PM  | 

RESIZE: AAA

As you probably have heard by now, the United States has reached its statutory debt limit, and the Treasury Department each day performs “extraordinary measures” to prevent the federal government from having to make any real choices to reduce debt or prioritize spending.

As of right now, only one entity on Capitol Hill has put forward a serious, robust plan to truly reform the way Washington budgets and spends taxpayer dollars, so that we never again hit the debt ceiling.  It’s the U.S. House Republican Study Committee (RSC)—and the plan is called “Cut, Cap, and Balance.”

The RSC, led by Rep. Jim Jordan (R-OH), articulates its Cut, Cap, and Balance plan in a letter, soon to be sent to House leadership (I’m told they have 90 signatures on the letter so far but are still gathering more). In the letter, they first state unequivocally that they will not vote for a debt-ceiling increase without accompanying cuts and reforms, saying, “…if we do not reverse the out-of-control spending that has led us here, it would be grossly irresponsible for us to extend the limit on the national credit card.”

Exactly right.

Then the RSC makes its demands:

  1. Americans deserve immediate spending cuts that demonstrate that we are charting a swift path toward a balanced budget.  We must implement discretionary and mandatory spending reductions that would cut the deficit in half next year.
  2. To ensure that spending cuts continue, we need statutory, enforceable total-spending caps to reduce federal spending to 18% of Gross Domestic Product (GDP), with automatic spending reductions if the caps are breached–an approach taken in a bill by Rep. Mack and in another bill by Reps. Kingston, Flake, and Graves.
  3. To fundamentally and permanently reform the way that Washington budgets and spends, we must send to the states a Balanced Budget Amendment (BBA) with strong protections against federal tax increases and including a Spending Limitation Amendment (SLA) like the statutory spending caps described above.  Rep. Joe Walsh has introduced a BBA with a spending limit provision (H.J.Res. 56) that has already earned the support of 47 Republican senators.

In short: Cut, Cap, and Balance.

Learn more about this plan at the website http://www.cutcapbalance.com/, and let’s help our friends at the RSC build more support for it.

Tags: ,
Get Alerts

COMMENTS

POSTING RULES  |  LOGIN TO COMMENT  |  REGISTER TODAY
  • http://www.redstateeclectic.com enrique

    Although it doesn’t bring down the debt the plan would be a reasonable first step in some fiscal sanity in Washington. Although, isn’t part of the GDP calculated including government spending? Kind of makes the GDP designation a fungible benchmark especially in light of how the gov’t calculates inflation, unemployment, etc.

    When they control the statistics they control the results.

  • Death_of_the_Donkey

    if enacted. Sorry to burst everyone’s bubble, but the fact is government spending is not only a component of GDP (rightfully so, unless you think that say Lockheed doesn’t add to the economy), but a cut of the current deficit in half in one year (deficit is roughly $1.5 trillion, so $750 billion in cuts) would bring on an extremely deep recession (with accompanying unemployment and stock market collapses). Also, I don’t even see how this is remotely feasible since the entire non-defense discretionary budget is only like $400 billion, which means if we cut ALL of that we would still have to cut another $350 billion off current defense, social security, or medicare (which I cannot imagine would win us anything). The real solution to our economic morass is to reform entitlements and gradually reduce the defense and non-defense budgets back to inflation adjusted 2000 levels (so as not to hurt the current recovery, which would compound the debt problem by reducing revenues again and causing a vicious negative feedback loop).

  • skorrent1

    Forty seven GOP SENATORS?

  • Adjoran

    Federal spending exploded in the last couple of years ostensibly to cover the financial meltdown bailouts and the extraordinary “stimulus” spending which was promised to keep unemployment under 8%.

    In what universe do these huge increases for specific “emergencies” now become a rock-bottom line for government spending?

  • Adjoran

    BUT the real problem is that we aren’t helping to solve this problem by focusing on it to the exclusion of the others. A clear majority of Americans put either “the economy” or “jobs” as the single issue with which they are most concerned. Only 12% put the fiscal issues at the top, as Rich Lowry pointed out yesterday.

    We could be hammering Obama on jobs, economy, energy prices, food prices – the bread and butter issues which usually win, but which Democrats MUST have to win. But it’s all deficits and Medicare all the time, allowing the Democrats to focus on Medicare and Grandma going off the cliff.

    No one should doubt that to really fix the fiscal problems we will need to control the Senate and the White House, too. We will win them next year if don’t forget to talk about the things people care about most instead of giving Obama’s failing performance a pass on accountability.

  • http://www.hakubi.us/ Neil Stevens

    But it doesn’t make it meaningful.

    An economy growing by government spending is not healthy anyway.

  • dajeeps

    Ronald Reagan did what he had to do to right the ship. He started right away, and it did bring on a recession. It was a short but deep one, followed by a quick recovery. It takes a little bit of time for resources (all kinds of capital) that are not efficiently allocated to adjust, but it finally got us out the inflationary spiral and back to being efficient and making real money.

    Now back to 2011, one should consider what will happen if the needed reallocation never occurs. The government cannot keep spending just to prop up a dysfunctional economy forever, which will only become much worse because sooner or later the only way to sustain it will be to fire up the printing press and adjust the output setting to mega-high. There is no Bretton-Woods Accord to patch together with accounting tricks (LBJ). There are no more gold windows to close(Nixon). We could not possibly tax our way to prosperity, or out of that kind of problem. If we don’t stop it now, there will be no way to grow our way out, if it is even remotely possible at the present.

    Whatever happens to fix this mess, it will take plently of courage, and most of all, real leadership. Ronald Reagan had it all, and certainly hope that one of the horses in the race on the Republican side have at least some of what he had – otherwise we’re in for a real bumpy decade.

  • cmac1225

    This is what the government needs to show.

    Will there be some painful adjustments? Of course, but the economy needs to be self-sustaining and not propped up. Otherwise, continued spending by the government to provide everything to everyone makes me think austerity could become a reality.

  • dajeeps

    The BBA just treats the symptoms, but doesn’t cure the statism disease; which is at the root of all the spending issues. After ObamaCare passed despite the massive public outcry against it, one really has to wonder about where the loyaties of of these people, the ruling class, actually lie and whether the thirst for power is just way too compelling a force to be contained with spending limits.

    It seems to me that the BBA would just change the way they accomplish their goals, not defeat them, and trade one set of spending and debt problems for another. And really, if we thought state governments were just mere shadows of their former selves now, I can only imagine what will happen to them afterward. They surely won’t survive hyper-extended interpretations of the commerce clause when the Federal government has virtually unlimited power to regulate but can’t spend. And for us, it would likely make little material difference because the cost to our wallets and liberty would be the same.

    Really, I think a better solution would be to reset the interpretation of the constitution back to what the Founders believed it meant. And to do that there need to be amendments to Article III and a clarification of the commerce clause. Add a BBA to that if we really want to, but unless or until Fedzilla is put back in its cage we’re not going to get to keep our money or our freedom.

  • almas

    Speaker John Boehner holds the winning hand and all he has to do is “hold ‘em.” A “NO” vote, or even no vote to raise the debt limit is a victory for the people that the iron fist of Senate Majority Leader Harry Reid and Spender-In-Chief Barack Obama cannot overcome. Sitting on his hands is a winner for Boehner and America, and will force a defacto balanced budget as government will be allowed to spend just like much of America, whatever comes in each month, paycheck to paycheck, and tightening the belt to the limit of 60% of budget authorizations, forcing elimination of waste, fraud, hundreds of duplicate programs, stopping the self-defeating wars, and weeding out of some of the 800,000 federal employees deemed to be non-essential before the last temporary budget extension. Obama and Reid are the real culprits and want an increase in the national debt limit without making real cuts in expenditures. Promises by politicians are worthless. Actions speak louder than words, and now is America’s best last chance for fiscal sanity and to not become Greece.

  • YnotNOW

    in that reduction of Government spending can (and will) cause short-term pain and dip in GDP, but will set us up for a longer-term (and not far off) growth in the economy as free enterprise is freed up to do what it does best – invest and make money by providing goods and services that people actually WANT to pay for.

    Government pays for goods and services that taxpayers are FORCED to pay for whether they want to or not. Which is why I always say that government spending and overreach is a moral issue.

    We must be willing to stand on the moral rightness to retain strength through the short-term blip caused by disruption in the economy when the Government backs out of its overreaching role.

  • YnotNOW

    in that reduction of Government spending can (and will) cause short-term pain and dip in GDP, but will set us up for a longer-term (and not far off) growth in the economy as free enterprise is freed up to do what it does best – invest and make money by providing goods and services that people actually WANT to pay for.

    Government pays for goods and services that taxpayers are FORCED to pay for whether they want to or not. Which is why I always say that government spending and overreach is a moral issue.

    We must be willing to stand on the moral rightness to retain strength through the short-term blip caused by disruption in the economy when the Government backs out of its overreaching role.