Republican Study Committee Proposes Spending Cuts

Today the Republican Study Committee (RSC), the caucus of conservatives in the House of Representatives, announced their proposal for reducing our budget deficits. The plan was introduced by RSC Chairman Rep. Jim Jordan (R-OH) and leader of the RSC's Budget and Spending Taskforce, Rep. Scott Garrett (R-NJ). Dubbed the Spending Reduction Act of 2011, it uses the new House majority's promise to bring non-security federal spending for the remainder of FY 2011 down to FY 2008 levels as a starting point, and then takes it to another level.

Looking ahead, the RSC plan goes even further than the party leadership's pledge by proposing to cut non-defense discretionary spending back to FY 2006 levels beginning with FY 2012 and keeping it at that level through 2021. It also proposes to cut or eliminate over 100 federal programs. All told, they project their plan will reduce the deficit by $2.5 trillion over the next ten years.

The proposal to cap FY 2012-2021 non-defense discretionary spending at FY 2006 levels provides the bulk of the plan's savings, coming out to $2.29 trillion over that ten year span. The plan would eliminate automatic increases for inflation for future discretionary appropriations to go with the caps on the non-defense discretionary piece of the budget and also cut the federal workforce by 15% over time through limiting new hiring. Along with the $80 billion saved by reducing FY 2011 spending to 2008 levels, this portion of the savings increases to $2.37 trillion.

Included in this large sum of projected cuts are $330 billion that have been directly accounted for by targeting specific programs. The proposal directs for the sale of excess federal property, eliminates funding for the acquisition of new federal office space, slices federal travel budgets in half, cuts the federal vehicle fleet by 20%, and halves funding for congressional printing and binding. Then there are numerous smaller savings the plan has identified. They advocate cutting funding from over 100 programs: from the Community Development Fund, New Starts Transit, Intercity and High Speed Rail grants, research at the Department of Energy, USAID, Amtrak, and even economic assistance to Egypt, among many others.

Additionally, the plan calls for cuts to a couple items of mandatory spending in the current budget. These are some of the bigger ticket items that provide additional savings. The proposal advocates for the repeal of the remaining stimulus funds, eliminating federal control of Fannie Mae and Freddie Mac, and repealing the Medicaid FMAP increase in the "State Bailout" which would save $45 billion, $30 billion, and $16 billion, respectively.

Savings in the RSC Proposal 10-Year Savings
Specified cuts to over 100 programs in non-defense discretionary spending $330 Billion
Additional savings from discretionary controls $2.04 Trillion
Rescind un-used Stimulus Money $45 Billion
Eliminate Federal Control of Fannie Mae and Freddie Mac $30 Billion
Repeal Medicaid FMAP Increase in "State Bailout" $16 Billion
Total Savings $2.5 Trillion

The specific cuts, as well as the ambitious overall targets, proposed by the RSC are an important contribution to the burgeoning fiscal responsibility discussion. We applaud this latest effort to draw attention to our federal budget deficits and the national debt and provide specific ideas.

At the same time, we must recognize that we cannot solve our fiscal problems solely by reducing non-defense discretionary spending, even with the substantial cuts proposed by the RSC. As the RSC said in a statement unveiling the proposal:

“This bill represents the first step in the process, not the last. To achieve long-term fiscal stability, we must finish the race by making the tough decisions Congress has put off for far too long."

Defense spending cuts, entitlement reform, tax expenditures and revenue must all be on the table. If left unchecked, the growth of these areas of the budget, especially mandatory spending, will drown out all the savings in the Republican Study Committee proposal, and more. The RSC should be commended for offering these ideas, but we also hope that the RSC members and other policymakers will start working together to formulate a viable, comprehensive fiscal plan, and not simply talk past each other.