“Spending cut” bills: political showcase or the real deal?

February 7, 2011

We recently told you Sen. Claire McCaskill (D-MO) crossed the aisle to sign on to S. 245, a bill that would cut federal spending to 20.6% of the economy (just above the historic average) over the next decade. Of critical note: this bill addresses not only discretionary spending, but also one of the largest entitlements and key drivers of future debt (Social Security)…and one of the most politically difficult to reform. Sen. McCaskill said of the risk involved in signing on to the bill:

“If this bill is distorted and twisted, it could cost me my Senate seat, but it’s a price I am willing to pay…. Getting control of spending is very, very hard, but we have to do it and we have to do it now.”

Newly elected Sen. Rand Paul (R-KY) also recently unveiled a plan (S.162) to cut $500 billion from the federal budget this year by reducing spending in several programs, and eliminating others altogether. Sen. Paul’s plan would cut $42 billion from the food stamp program, and eliminate the Corporation for Public Broadcasting, the Consumer Product Safety Commission, and the National Endowment for the Arts. The plan has been criticized for its relatively small cuts to defense spending.

Not to be outdone by their Senate counterparts, House Republicans are also, ostensibly, busy pushing for spending cuts. The House rules package included a 5-percent cut to congressional budgets, only to be one-upped by a self-imposed 9-percent cut by – believe it or not — the House Appropriations Committee. “This is the beginning of a serious and sustained effort to cut government spending,” said Rep. Tom Cole (R-OK), a member of the Appropriations Committee.

Among the spending-cut bills proposed in the House last month:

First, Rep. Kevin Brady (R-TX), senior member of the Ways and Means Committee, details several proposals in his Cut Unsustainable and Top-heavy Spending (or “CUTS”) Act (H.R. 235). These include cutting spending by $153 billion over five years by reducing by 15 percent White House and congressional budgets; reducing the federal workforce by 200,000, and imposing a three-year pay freeze across federal agencies, according to the Washington Post. Among CUTS’ other savings proposals are ending unemployment insurance payments to those with more than $1 million in assets, slowing the growth of foreign aid by 10 percent for development and humanitarian assistance, and eliminating grants to large- and medium-sized hub airports.

Brady cited Republicans and Democrats on the President’s deficit commission who “agreed these cuts need to be made.” He likened the federal government to an American business, saying, “There’s not a business in America that’s survived this recession without rightsizing its workforce, without having to become more productive with fewer workers. The federal government can’t be the exception.”

The Republican Study Committee [RSC] — which represents two-thirds of House Republicans, including almost 75 freshman – also proposed a package of cuts (H.R. 480) they claim would slash $125 billion from non-defense discretionary spending in this fiscal year, return spending to 2006 levels in the years after that, and achieve $2.5 trillion in savings over the next decade. Some of the savings in this bill include: $30 billion from immediately selling off Fannie Mae and Freddie Mac; $16 billion in cuts to federal assistance of state Medicaid costs; decreasing the federal subsidies of Amtrak, the Corporation for Public Broadcasting, and the National Endowment for the Arts; eliminating high-speed rail funding; and cutting $40 billion in so-called “stimulus” funds (even for projects that have already begun).

Finally, House Republican leadership last week revealed a plan to cut spending this year, as was expected. Regrettably, the plan would only cut $30 billion, rather than the $100 billion they’d promised prior to last year’s election.

We at Public Notice heartily applaud these Members’ efforts to be part of the solution. However, while all of these bills address various spending programs, none take as comprehensive an approach as is required to make real progress toward spending and debt reduction.

So while we will continue to highlight – and to applaud, as appropriate – Members’ ideas for spending cuts, we know that: 1) simply introducing a bill doesn’t change anything; and 2) trimming around the edges isn’t enough to get our fiscal house in order. The entire budget must be addressed, and quickly.

We hope the recent flurry of “spending cut” bills will translate into real, significant spending reform when the President proposes, and Congress writes and acts to implement, the nation’s budget for the new year.

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