The House's overwhelming rejection of a clean debt-limit increase means that the two parties must now find major spending cuts. House Republicans say that they will not support a debt increase unless the Democrats agree to equal-sized spending cuts. If Congress raises the debt limit by $1 trillion, then it must also find budget savings of at least $1 trillion, over either five or ten years.
House Speaker John Boehner has promised to tie substantial spending cuts to upcoming debt-limit legislation. He said spending cuts will have to be at least as large as the dollar value of the allowed debt increase. Thus, if the legislation increased the legal debt limit by $2 trillion, then Congress would have to cut spending over time by at least $2 trillion.
The British royal wedding was splendid, and the bride and groom were a great match. As a fiscal wonk, my idea of a royal match-up would be marrying corporate tax cuts and business subsidy cuts. The Obama administration is talking about corporate tax cuts and Republicans are talking about cuts to farm subsidies. Might they get together over a cup of tea and work out nuptials?
In my quest to downsize the government, I’ve been looking at the Department of Labor budget recently. My vision is to cut federal spending to create a freer and more prosperous society. James Madison’s vision was for a federal government of “few and defined” powers.
The government’s air traffic controllers have been sleeping on the job, watching movies rather than guiding planes, and misdirecting the First Lady’s plane over Washington. There have been soaring numbers of airplane near misses caused by ATC errors over the last year.
My colleague, Tad DeHaven, showed us yesterday that even with the roughly $40 billion spending cut, total outlays will still rise substantially this year, fiscal 2011.
President Obama says that he supports a “balanced” plan of tax increases and spending cuts to tackle the government’s huge debt. The problem is that the fiscal mess in Washington is far from balanced.
Republicans and Democrats are currently battling over $61 billion, or less, in federal spending cuts for the remainder of the current fiscal year. The chart below puts that figure in perspective. It shows the annual increases in total federal outlays each year over the last decade.
House Budget Committee Chairman, Paul Ryan, introduced his budget resolution for fiscal 2012 and beyond today entitled “The Path to Prosperity.” The plan would cut some spending programs, reduce top income tax rates, and reform Medicare and Medicaid. The following two charts compare spending levels under Chairman Ryan’s plan and President Obama’s recent budget (as scored by the Congressional Budget Office).