We are at the start of a serious conversation about government spending. In response to the president’s budget proposal for FY 2012, the House Budget Committee put forth a plan which leaves defense spending and Social Security untouched but proposes $6.2 trillion in federal spending cuts relative to the president’s budget over the next ten years. This, in turn, was followed by a Republican Study Committee plan in which all spending categories were on the table, including Social Security, and which cuts federal spending by $9.5 trillion relative to the president’s budget over the next ten years.
This chart illustrates federal spending under these three plans:
Under each plan, spending levels are projected to grow, albeit at a slower pace than the economy. The differences in spending are meaningful: By 2021, there is a $1.5 trillion difference in the level of spending called for between the president’s budget and the RSC’s proposal.
What I find most interesting is how President Obama’s unserious plan– in that it makes no attempt to cut spending or debt, or even to include recommendations from his own deficit commission — was deemed worthy of serious discussion when it came out, while the more thoughtful Ryan and RSC plans were pronounced dead on arrival. And they may be. However, unsustainable overspending leads to debt and deficits. That means that these competing budget proposals mark the beginning of a budget conversation that must end in a tenable plan to reduce federal spending.