As Americans watch their paychecks stagnate, their jobs disappear, and their savings shrink, Washington continues its relentless expansion of spending, deficits, and debt. Federal outlays are soaring, the deficit just eclipsed the $1-trillion mark, and the Federal debt is on a path to consume resources matching the size of the entire economy. This year, more than half of Federal spending is outside the annual control of Congress, and the non-defense share of the remainder is growing at double-digit rates. More troubling is the long-term budget outlook, as the Nation begins to see the front edge of an entitlement crisis. In the long run, current Federal policies are likely to produce $62 trillion in unfunded liabilities, according to estimates by the Government Accountability Office [GAO]. These long-term problems threaten both the beneficiaries dependent on Federal programs and, ultimately, the entire U.S. economy.
The current budget process lacks sufficient controls to attack this problem. More important, Congress has increasingly abused the process, and exploited its loopholes, to make the problem far worse. While budget process changes cannot, by themselves, get control of spending and debt, they can give Congress and the President the tools to fix the most serious economic problem facing the country. To that end, The Spending, Deficit, and Debt Control Act does the following:
- Creates a Legally Binding Budget. Gives the budget the force of law; calls on Congress and the President to agree, early in the process, on binding budget parameters; and promotes shared accountability for fiscal outcomes, rather than constant finger-pointing.
- Establishes Real, Enforceable Limits on Spending and Deficits. Places firm caps on both discretionary and mandatory spending, as well as total spending and deficits – and enforces these limits with automatic spending reductions aimed at the programs with the highest spending growth.
- Addresses the Entitlement Crisis and Other Long-Term Liabilities. Requires Congress to address the fiscal burdens mounting on future generations, and the huge unfunded obligations already looming; provides a means of slowing the long-term growth of the government’s largest entitlements; and requires regular review of entitlement spending, with a fast-track mechanism for placing these programs on a sustainable path.
Read the full report here.