Republican Study Committee Budget Sets the Right Priorities
The fiscal year
2005 budget resolution proposed by the Republican Study Committee
(RSC) represents real progress towards fiscal responsibility.
Although full details are not yet available, this budget should be
seriously considered by lawmakers interested in restraining runaway
This budget is
strong in four key areas:
discretionary spending. The RSC budget sets priorities by fully
funding the President's defense and homeland security requests,
while calling for a 1 percent reduction in the rest of the
discretionary budget. With discretionary spending up 39 percent
since 2001, many of these programs can afford to tighten their
belts. This proposal would save $6.1 billion in the first year
entitlements. The RSC budget includes instructions to reduce
non-Social Security mandatory spending by a modest 1 percent. Given
that the government's own auditors have identified over $100
billion in waste, fraud, and abuse in entitlement programs,
lawmakers should not consider unreasonable these savings of $7.7
billion in the first year.
and expanding tax relief. Unless Congress takes direct action,
recent tax cuts for working families, parents, and married couples
will expire this year. The RSC budget provides instructions to
extend the current expiring tax cuts and also to provide new tax
relief that is necessary to strengthen the economic recovery.
federal budget process. Budget process reform is perhaps the
most important aspect of the RSC budget. The current budget process
is in such shambles that budget decisions are rarely enforced,
loopholes are routinely abused, and no real spending limits exist.
In order to assure real enforcement, the RSC budget would require a
stand-alone vote to bypass any of its restrictions. It would also
make it more difficult for lawmakers to bypass their spending
ceilings by labeling regular spending as "emergencies." Finally, it
would allow lawmakers to apply appropriations savings to tax relief
or deficit reduction, rather than automatically redirecting it to
of A Responsible Budget
The RSC budget
represents important progress towards fiscal responsibility.
Congress should build on the proposal and seek a final budget that
accomplishes key goals:
discretionary spending at its 2004 level.
spend billions on outdated, wasteful, lower-priority programs.
Congress should do what millions of families do: set priorities and
balance every higher-priority spending increase with a
lower-priority spending cut.
significant entitlement reform. Entitlement programs such as
Social Security and Medicare are projected to nearly double in cost
over the next decade on their way to eventually overwhelming the
rest of the federal budget.It is impossible to rein in federal
spending without serious, structural entitlement reform, including
delaying the implementation of the new Medicare drug benefit until
its costs are fully known.
Make the tax
cuts permanent. Recent tax rate reductions have provided
incentives to work, save, and invest that helped bring surging
productivity and will lead to more new jobs. However, the
uncertainty of whether the tax cuts will expire creates
difficulties for businesses making long-term investment plans and
for families worried about their taxes increasing sharply. Making
the tax cuts permanent would help families, businesses, and the
federal budget process.
Lawmakers still cling to a budget
process created in 1974. Over the past 30 years, successive
Congresses have punched this process full of holes, and federal
spending has correspondingly tripled. The current budget process
provides no workable tools to limit spending, no restrictions on
passing massive costs onto future generations, and no incentive to
bring all parties to the table early in the budget process to set a
framework. Real reform, such as the Family Budget Protection Act
(HR 3800), would assure that the budget process reflects the
nation's budget priorities.
currently tops $20,000 per household and is rising every year.
Reining in runaway spending requires setting priorities and making
difficult decisions. The RSC budget represents a strong first step
back to fiscal responsibility.
Brian M. Riedl is Grover M. Hermann Fellow in
Federal Budgetary Affairs in the Thomas A. Roe Institute for
Economic Policy Studies at The Heritage Foundation.