GOP Spending Plan

via: Patriot Post

House Republicans hit the ground running in their attempts to bring fiscal sanity to Washington as promised in the 2010 midterms. However, it took many years and both political parties to bring us to the brink of fiscal disaster, so it’s natural to be skeptical that Republicans can truly make a change. First up is the national debt, which passed the $14 trillion mark this New Year’s Eve. The debt ceiling of $14.2 trillion will be reached soon.

Republicans have vowed to vote against raising the debt ceiling unless there is a concrete plan in place to reduce federal spending. If the debt ceiling is not raised, the government “shuts down” and will default on a number of loans. Obama economic adviser Austan Goolsbee called the idea of not raising the ceiling “insanity.” What’s really insane, though, is automatically raising the debt limit every time it’s reached without working to reduce that debt. When Obama was a senator, he didn’t think it insane to vote against raising the debt ceiling in 2006. (In 2007 and 2008, he simply didn’t vote.) Then again, Obama is much happier when we do what he says, not what he does.

As for spending cuts, the new GOP proposals and rules will surely lead to a showdown with spendthrift Democrats. The GOP goal is to remove 21 percent of the $477 billion that has been approved for domestic discretionary spending this year. Republicans also want to take back $12 billion from the president’s $814 billion stimulus package that has yet to be allocated. The House leadership is also developing a new set of rules that may hold spending in check.

For starters, the so-called “pay as you go” rule is history. Democrats under Nancy Pelosi lauded paygo as their plan to keep spending under control. In theory, any spending increase had to be offset by a tax increase or a spending cut elsewhere in the budget. In practice, Democrats exempted any spending increases on entitlements, which is where the biggest spending abuses exist. Besides, Democrats never actually wanted to cut anything, so they exempted everything else as “emergency” spending. Republicans have introduced a new plan where even increases in mandatory spending will require equal spending cuts elsewhere in the budget.

Republicans will also require budget projections to be reported out further than the traditional 10-year window, which will make it harder to hide deficit spending. Spending reduction accounts will also be established to hold money slashed from spending bills to reduce total amounts appropriated. In the past, money cut from an earmark or a program was merely added elsewhere in the budget, resulting in no real cost savings.

As a countermeasure, the White House is calling for true cuts to its least favorite institution — the Pentagon. The Armed Forces will absorb a $78 billion cut over five years, including a reduction of nearly 50,000 active duty soldiers and Marines over that time. These will be the largest cuts since before 9/11.

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