The RSC and CPC Budget Proposals
This week the Republican Study Committee and the Congressional Progressive Caucus released their fiscal year 2013 budget proposals. So how do the proposals stack up to each other? We took a look at the proposals based upon; spending, taxes and deficits over 10 years. Take a look below to find out where each proposal stands. (You can find the RSC Budget here, and the CPC Budget here.)
Though not scored by an independent source, both budgets claim spending cuts over the long term. While the RSC Budget proposes cuts in discretionary spending to 2008 levels, the CPC budget finds major spending cuts in defense spending.
The RSC Budget cites “duplicative… or harmful programs” to be cut, to save taxdollars. Along with these cuts, the moratorium on earmarks currently in Congress is placed into law with the proposals passage. Savings of note in the RSC Budget include the elimination of certain federal agencies and by adopting the House Republican strategy to reform Medicare, Medicaid and Social Security. Agencies on the chopping block are the Corporation for Public Broadcasting, Economic Development Administration, the Legal Services Corporation, the National Endowment for the Arts and the National Labor Relations Board.
CPC points to defense cuts for both immediate and long-term savings. The immediate savings come from timely withdraw of troops from Iraq and Afghanistan, while other reductions would be made by ending the emergency contingency operations emergency supplemental funds and reduction of strategic capabilities, conventional forces, procurement and research and development programs. The CPC claims ending of the emergency contingency operations emergency supplemental funds, approximately $170 billion for FY 2012, over 10 years would accrue $1.8 trillion dollars in savings compared to current spending levels.
While the RSC budget proposes no new taxes, it does propose reforming the tax code to a “simpler, flatter and fairer” tax code. The proposal would adopt a freeze on any scheduled tax increases during FY 2012, plans to reduce the corporate tax rate to 25% while eliminating loopholes, and eliminates the death/estate tax, the alternative minimum tax and investment tax on inflation. The proposal also sets out a plan to reform the current tax codeinto just 2 income brackets, 15% for individuals making $50,000 in taxable income or 25% for those making more than $50,000. ($100,000 for joint filers) No projection on the amount of revenue was given.
The CPC proposes multiple new avenues to increase revenue over time. While individual rates are changed to add 5 new tax brackets, ranging from 45% to 49%, on those making more than $1 million dollars a year, the proposal also allows Bush-era tax cuts to expire in Dec. 2012. They do extend the marriage relief credits and incentives for children, families and education provisions of those same cuts. The budget would rescind the upper income tax cuts made in December and reduce the rate at which itemized deductions can reduce tax liability to 28%. The budget also reforms the US corporate tax rate to include income earned overseas, introduces a tax on banks with more than $50 billion in assets, a financial speculation tax, and reinstates the superfund tax. Lastly the proposal reshapes the estate tax to include a maximum rate of 65% on estates worth over $500 million dollars and a minimum of 45% on estates totaling $50 million. Overall, the CPC projects a net increase of $3.9 trillion in tax revenue over 10 years when compared to current levels.
Both the RSC and CPC budgets propose to bring the federal deficit to zero over a period of less than 10 years. According to the RSC budget, surpluses begin to take effect in 2017 and top $125 billion in 2021. The CPC projects surpluses beginning in year 2021 with $30.7 billion.
The budget proposals from these groups differ greatly, to say the least. However both budgets display recognition from both parties, the need to reduce deficits and bring our national debt under control, highlighting the fact that our growing fiscal problems are not based upon party lines, but instead are a growing concern for all Americans.