At the risk of stating the obvious, the Obama administration and the 111th Congress are on a spending binge of catastrophic proportion. The American economy hasn’t seen such jeopardy at the hands of politicians since the Jimmy Carter Era.
Unfortunately, something’s got to give.
House Budget Committee Republicans, led by ranking member Paul Ryan (Wis.) and vice ranking member Jeb Hensarling (Texas), have a few suggestions. On Tuesday they unveiled a series of spending cuts they call the “Cut Spending Now” package that they estimate would save taxpayers $1.3 trillion.
That’s music to the ears of the American taxpayer. But is that actually possible? Is there a glimmer of actual hope for real change?
Specifically, the proposed cuts would:
• Cancel Unused TARP Funds. Prohibit the Treasury Secretary from entering into new commitments under the Troubled Asset Relief Program [TARP]. Ending TARP would prevent up to $396 billion in additional disbursements; CBO estimates savings of $16 billion. H.R. 3140 introduced by Rep. Tom Price of Georgia.
• Cancel Unspent ‘Stimulus’ Funds. Rescind all unobligated budget authority authorized under the “stimulus” bill and dedicate to deficit reduction. Saves up to $266 billion. H.R. 3140 introduced by Rep. Tom Price of Georgia.
• Cut and Cap Discretionary Spending. Return non-defense discretionary spending to pre-Obama (fiscal year 2008) baseline levels. Saves up to $925 billion. Legislation introduced by Reps. Ryan and Hensarling (H.R. 3964) and Rep. Jim Jordan of Ohio (H.R 3298) include caps on discretionary spending.
• Reduce Government Employment. Hire one person for every two who leaves civilian government service until the workforce is reduced to pre-Obama levels (exempting the Departments of Defense, Homeland Security, and Veterans Affairs). Saves an estimated $35 billion. H.R. 5348 introduced by Rep. Cynthia Lummis of Wyoming.
• Freeze Government Pay. Freeze Federal civilian pay for 1 year. Saves an estimated $30 billion.
• Adopt the Legislative Line-Item Veto. Enact a constitutional line-item veto law. The President’s FY 2011 budget included terminations, reductions, and savings that would achieve $23 billion in one year. While Congress may not accept all these savings, the Line Item Veto can help reduce spending. H.R. 1294 introduced by Rep. Paul Ryan of Wisconsin.
• Reform and Bring Transparency to Fannie Mae and Freddie Mac. Reform these companies by ending conservatorship, shrinking their portfolios, establishing minimum capital standards, reducing conforming loan limits, and bringing transparency to taxpayer exposure. According to CBO, the cost to taxpayers of putting government in control of Fannie and Freddie is $373 billion through 2020. Saves an estimated $30 billion. H.R. 4889 introduced by Rep. Jeb Hensarling of Texas. H.R. 4653 introduced by Rep. Scott Garrett of New Jersey.
• Create a Sunset Commission. Establish a commission to conduct systematic reviews of federal programs and agencies, and make recommendations for those that should be terminated; and provide for automatic sunset of programs unless expressly reauthorized by the Congress. H.R. 393 introduced by Rep. Kevin Brady of Texas.
“House Republicans’ continued effort to rein in runaway spending stands in stark contrast to the fiscal recklessness of this Congress and this administration,” Ryan announced in a statement. “The Majority’s unprecedented failure to budget provides no priorities for American’s hard-earned tax-dollars, exacerbates our looming debt crisis, and undermines the need for job creation and economic growth. To combat the explosion in federal spending, Republicans have identified over $1.3 trillion in spending we can cut now.”
Hensarling compares America’s current path to that of Greece.
“At a time when private sector employment is stagnant, so many of us are frustrated that we are living in an America that looks much different than the America that promised unlimited opportunity as a birthright,” Hensarling said. “The Obama administration and congressional Democrats have put us on an unsustainable path of too much spending, too much taxation, ballooning the federal budget and government hiring, resulting in record deficits and debt. This is the same path Greece once took. Despite repeated calls from the American people for fiscal responsibility, House Democrats will not even attempt to pass a budget. House Republicans are standing on principle and offering the ‘Cut Spending Now’ package, which could save American taxpayers $1.3 trillion.”
One thing we do know for certain: the current path is unsustainable.
The more the Republicans talk spending cuts the better. Should they win control of Congress come November, there will be no shortage of American voters ready to hold them to their words in January 2011.