The Spending Reduction Act of 2011 appears at first glance to be a meaningful step in the right direction. It’s important not to get too carried away with big numbers, though: $2.5 trillion is a lot of money, but spread out over ten years it averages $250 billion. In FY 2008, the feds spent $3 trillion, so the cuts represent less than 10 percent of total spending before the fiscal debacle over the past two years.
Still, the proposed reductions in future spending are meaningful. Most of the “savings” get us back to the FY 2008 levels, and most of this will come from imposing macro limits on future spending by eliminating automatic increases in appropriations due to inflation, resetting the budget baselines to FY 2008 levels, and reducing the federal payroll by not filling vacancies created by attrition. These aren’t trivial changes. Without establishing FY 2008 as baseline, the effective political baseline will be FY 2010, which would accept and embed the much bigger government established during the recession.
The plan also claims to cut or eliminate 100 other programs. Alas, many of these programs have been on the chopping block since the Reagan administration — Legal Services Corporation, USAID, Amtrak subsidies, Davis-Bacon repeal — and have survived.
Nevertheless, even if this plan does little more than establish a baseline for fiscal restraint leading up to the next presidential election, it will serve a valuable purpose. This is a menu of waste and a set of budgetary benchmarks and milestones that can be used to score Democrats and Republicans.
I worked with Rep. Jim Jordan, chair of the Republican Study Committee, when he was in the Ohio Senate, and he was one of the few elected officials willing to spend political capital on political principle. One always worries if the political process inevitably corrupts the best among us. This plan appears to signal that he is serious about creating a better political environment for conservative fiscal principles. Let’s hope he and his colleagues can stay the course and gather momentum for real change.
— Samuel R. Staley is Robert W. Galvin Fellow and Director of Urban & Land Use Policy at the Reason Foundation.
Right, I like the plan, but it depends a lot on future congress's following the plan which won't happen. I think it would be great to bring things down relatively painlessly, but they need to find actual immediate cuts as well. Of course, the bigger problem is entitlement spending having gotten too far out of whack with how they were set up (like social security covering 20 years of retirement instead of 8).
Reply to this commentLinkReport AbuseWhy didn't they cut defense, that's the biggest budget hog? These Republicans are spineless.
Reply to this commentLinkReport AbuseJust like the debt ceiling raises in the past gave a license to spend it ALL, limiting planned cuts to relatively low per-year numbers like these are an automatic license to achieve "most" but not all. The plan that will work "after Washington" and the inertia that city exerts will announce cuts of $20 trillion. Then we'll be lucky to get $3 trillion in actual cuts.
Reply to this commentLinkReport AbuseCutting defense for the sake of cutting defense, no - the % of money being spent on defense is below the historical "norm."
Now, if you want to cut particular expenditures to get rid of the "constituent service" aspect of defense spending, then we should talk.
My preference, though, would be to put those $$$ to use buying us real, necessary defense capability.
Reply to this commentLinkReport AbuseBudget cuts projected in the future are not very "meaningful." Show me cuts here and now and I'll pay some attention. Spend less this year than you take in this year, and I will call it meaningful.
Reply to this commentLinkReport Abuse@Josh:
Yeah, except for the fact that the sole purpose of the Federal Gov't is nat'l defense, its outrageous we spend 20% on defense.
I mean, we only spend 20% on Social Security? C'mon Fed! How do you expect people to live in Florida for half the year and the Adirondacks for the other half? Do you know how expensive it is to avoid seeing their children and grandchildren? We need more non needs based Social Security so we can further undermine human behavior. Sure, no civilization has severed multi-genarational dependency until now. But we're America, we can do it!
Reply to this commentLinkReport AbuseA step, but only a step. And its really of course only a suggestion of a step, in that nothing of consequence will make it past Reid's Senate and Obama's pen. But the hearts of this new GOP Congress seem quite an improvement over the Frist/Hastert cohort. The GOP has one chance left: win the Senate and WH in 2012, and then prove that they are more than merely "the ones who want to raise the school lunch voucher by only 4%, as opposed to the 6% upon which the Democrats insist."
Reply to this commentLinkReport AbuseA great step. Not the finished product but I'm joyful!
Reply to this commentLinkReport AbuseI think it is great that the GOP is proposing all these major pieces of legislation early in the game. It is important for the public to see that the GOP isn't the one saying "No." Having the House to ourself during the run up to the election could be really bad if we don't use it well. But the way things look to be going, this could be the foundation for a victory in 2012.
Reply to this commentLinkReport AbuseTargeted cuts are something I can get behind, but across the board cuts do not make sense. For example, the Department of Justice is underfunded in some areas, especially along the SW border (Texas, Arizona, New Mexico), as is the judiciary in those areas, too. Drastically cutting DOJs budget will result in hiring freezes that will harm an already over-worked and underpaid public employee sector. That's right, underpaid. Prosecutors, especially for the first few years, are paid a lot less than private sector attorneys, while at the same time working long hours at a difficult job--a job I assume most Americans want done right. Just something to think about when there is talk of taking a huge cut out of the budget.
Reply to this commentLinkReport AbuseLike KDW says, need to cut defense and entitlements. No bloody sacred cows. Getting our fiscal house in order is priority #1. BTW, more than a few of us conservatives are pretty burned out on the Afghan war too - I'm with George Will on that one.
Reply to this commentLinkReport AbuseI'm with Lawdog, it's ridiculous that we spend only 20% on national defense. In the not too distant past, we spent upwards of 50% of the ENTIRE budget on defense, not just the "discretionary" part. But that was in the days when entitlements were a relatively small portion of the federal budget. When the Korean War broke out, we immediately DOUBLED the defense budget. Today we don't have that latitude, because so much spending goes to "non-discretionary" or "off-budget" items like Social Security. We've really dug ourselves into a hole. Hopefully this new Congress understands that the first law of holes is, "stop digging".
Reply to this commentLinkReport AbuseWhat does the Dept of Education do with $47 billion every year? If that department suddenly ceased to exist ... would anyone outside D.C. notice?
Reply to this commentLinkReport Abuse$2.5 Trillion in 5 years not 10 years! Goodbye to Commerce, Energy and HHS.
Reply to this commentLinkReport AbuseIt is a lot less than $2.5T. The cash flows need to present valued. It is roughly 72% of the 2.5T figure assuming it 250 per year.
Reply to this commentLinkReport Abuse@Josh Lanch:
"Why didn't they cut defense, that's the biggest budget hog? These Republicans are spineless."
Sorry, that is incorrect. Social services account for a much larger portion of the budget.
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Reply to this commentLinkReport AbuseI will not believe that anyone is serious about cutting spending until they propose cutting the home interest tax deduction, the state income and sales tax federal tax deduction, and the special tax treatment of health benefits/401(k)/IRAs. There's no difference between HUD housing vouchers and the home interest mortgage deduction. Any takers?
Reply to this commentLinkReport AbuseGood start, now go after "entitlements."
Reply to this commentLinkReport Abuse@Josh Lanch:
"Why didn't they cut defense, that's the biggest budget hog? These Republicans are spineless."
Not only are your calculations incorrect, as pointed out by "Tom Coste," but defense is one thing government is supposed to be doing, while social services is something it is prohibited from doing.
Reply to this commentLinkReport AbuseHey Brooks and Tom,,,what are you fools,,you state the Govt only suppose to provide for defense? What part of Article One,Section Eight dont you understand? It clearly states "The Congress shall have the power to lay and collect Taxes,Duties,Imports and Excises to pay the Debts and provide for the common Defence AND GENERAL WELFARE OF THE UNITED STATES",,,should I keep going on? What part of that dont you understand?
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