As the budget battle for fiscal year 2013 looms around the corner for Congress, all sides from President Obama to Rep. Paul Ryan (R-Wisconsin) to the Republican Study Committee (RSC) are having their say as to how things should run in the year (and decade) ahead. The countrys enormous debt-crisis, a still-struggling economy, and out-of-control welfare programs that are on the verge of bankruptcy, such as Medicare, Medicaid, and Social Security, are whats at stake. President Obamas proposed budget recommended an average of $729 billion in annual budget deficits from 2012 through 2022, a $1.9 trillion tax increase on American families and job creators, and a $3.8 trillion budget for 2013. Recently, RSC proposed a contrasting budget in hopes of reining in government spending and reducing the debt and deficit.
The RSC budget has three main goals: cut, cap, and balance. Essentially, the hope is that by aggressively critiquing programs and downsizing federal intervention, the government will be able to significantly reduce the rampant spending and balance the budget. The spending cuts are focused mainly on the extensive discretionary and unnecessary spending in the United States today. The RSC proposes to reduce unnecessary mandatory spending (other than welfare programs like Medicaid, Medicare, or Social Security) and repeal ObamaCare in order to save over $1.9 trillion over the next ten years. Additionally, it hopes to cap discretionary spending at $931 billion in 2013 and then systematically reduce non-defense discretionary spending by $48 billion by 2022.
While RSC hopes to continue to cut and balance the budget, it is careful to not completely eliminate programs such as Medicare, Medicaid, and Social Security. Instead, it proposes enacting new legislation that would make federal funding of these programs more effective and would prevent future out-of-control spending such as slowly phasing in eligibility ages for Medicare and Social Security.
Additionally, the RSC recently introduced legislation called the State Health Flexibility Act, which essentially caps federal funding for Medicaid and the Childrens Health Insurance Program (CHIP) at their FY 2012 grant levels and provides the states with a single block grant so that states may fund health care however they choose and in the best way for their individual citizens. Additionally, by capping the grant, the states will need to prioritize spending and focus it where the funds are most needed, instead of being rewarded with more funding the more that they spend (whether they spent it efficiently or not).
Finally, the RSC proposed to introduce a new tax code to encourage growth through the Jobs Through Growth Act. This legislation would essentially give taxpayers the choice between keeping the current tax code or switching to a simpler, flatter income tax.It would also cut the corporate tax rate from 35% to 25% and repeal heavy tax burdens, such as the Death Tax.
In taking all of these measures, the RSC is hopeful that the federal budget can be balanced in ten years, amazingly, without even raising taxes. According to RSC Chairman Rep. Jim Jordan (R-Ohio), We need a plan that makes the hard decisions now, not later, to solve our spiraling debt crisis. The RSC budget represents a clear, practical way to cut spending, balance the budget, and get the government out of the way so our economy can begin growing again.