RSC Budget Plan Would Fundamentally Shift the Budget Course

COMMENTARY Budget and Spending

RSC Budget Plan Would Fundamentally Shift the Budget Course

Apr 27th, 2018 3 min read

Commentary By

Justin Bogie @JustinBogie

Senior Policy Analyst in Fiscal Affairs

Frederico Bartels

Policy Analyst for defense budgeting

The Republican Study Committee budget for fiscal year 2019 would balance the federal budget in 10 years and unlock reconciliation to reform entitlements. Tanarch/Getty Images

The Republican Study Committee has released its fiscal year 2019 budget proposal, “A Framework for Unified Conservatism.”

In light of the recent budget-busting deal and projections of trillion-dollar deficits returning, the plan sends a strong message: A truly conservative budget is the answer to the unsustainable budget course the nation is on.

The RSC framework does just that. The budget would balance in less than 10 years, reform Social Security, utilize reconciliation to make changes to Medicaid, Medicare, and welfare programs, and would reshape the role of the federal government.

The House and Senate Budget Committees should build on the RSC’s work and pass a balanced budget that unlocks reconciliation this year.

The framework for the RSC budget is as follows.

Balances the Budget in Less Than 10 Years 

The RSC budget would reach balance by 2026, just eight years from now. This is particularly remarkable in that it assumes a permanent extension of the Tax Cuts and Jobs Act and does not assume greater economic growth, which would in fact likely result from the extension.

In total, the proposal would cut spending by over $12.4 trillion and reduce deficits by $10.7 trillion.

Follows Sound Defense Budgeting Principles

The framework gives ample resources for our military to confront threats that we face as a nation. This simple concept has not been the norm since the Budget Control Act of 2011 became law.

The BCA forced three errors in defense budgeting: resource-guided budgeting, parity between defense and non-defense spending, and using Overseas Contingency Operations as an escape valve. The RSC budget remedies all three of these errors.

The RSC proposal promotes a threat-oriented budget. It grants resources to defense in accord with the missions that we have assigned to our military, rather than limiting defense spending with an arbitrary cap.

The proposal would move ongoing Overseas Contingency Operations to the base defense budget, which is its proper place.

There is one puzzling element in the RSC’s defense budget, however. There is unexplained decrease of $41 billion in the defense budget from 2023 to 2024. Additional context is needed to identify what environmental change will enable our defense budget to decrease five years from now.

Reverses the Latest Budget Deal and Reshapes the Role of the Federal Government 

The RSC budget would reverse the fiscal year 2019 budget cap increases that were passed in this year’s Bipartisan Budget Act, and would maintain spending below current cap levels through 2021. The framework also removes the firewall between defense and non-defense spending created by the Budget Control Act, allowing defense spending to remain a top budget priority.

The RSC proposal would cut base non-defense spending by over $2 trillion. It would achieve savings by focusing on the constitutional role of a limited federal government and reforming or eliminating programs that fall outside of that scope.

Reforms Social Security and Calls for Medicare, Medicaid, and Welfare Reform Through Reconciliation

Social Security, Medicare, and Medicaid are the biggest drivers of the country’s ballooning debt. Left unchecked, they will consume almost all federal revenues within 10 years.

The RSC budget would makes much-needed reforms to reduce the cost of these programs and ensure they remain viable for future generations.

First, the plan adopts the Social Security Reform Act. This includes reforms such as increasing eligibility age to 70, more accurately accounting for cost-of-living adjustments, and modernizing the benefit formula. It also makes commonsense changes to the Disability Insurance program.

Next, the RSC budget calls for Congress to produce reconciliation legislation to reform Medicare, Medicaid, other welfare programs, and repeal Obamacare. In total, the plan could achieve over $8 trillion in savings through reconciliation.

Extends and Expands Mandatory Sequestration

Under the Budget Control Act of 2011, discretionary spending caps are set to expire in 2021 and automatic mandatory cuts would end in 2027. The RSC budget would expand the mandatory cuts beginning in 2022 and would extend them through 2028.

Under this proposal, annual mandatory savings would increase by $54.7 billion—the amount that non-defense discretionary spending was supposed to be cut each year under the Budget Control Act. It would also greatly expand the number of programs to be cut under sequestration, including programs such as the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families, among other welfare programs.

The RSC’s Framework for Unified Conservatism shows that the time for action is now. In order to change our current unsustainable budget course, strong and immediate reforms are needed.

It is more important than ever that the House and Senate adopt a truly conservative budget and unlock reconciliation, the most powerful tool for instituting meaningful spending reforms.

This piece originally appeared in The Daily Signal