GOP proposes $1.3 trillion in savings over next 10 years
posted at 1:36 pm on May 25, 2010 by Ed Morrissey
Democratic attempts to paint Republicans as the Party of No got a little tougher today with the release of a new plan from the House Republicans on the Budget Committee. The GOP has demanded spending cuts, and today the group led by Rep. Paul Ryan (R-WI) laid out a preliminary slate of specifics. If adopted, they predict that they can save over $1.3 trillion over the next ten years. In the preamble, the GOP caucus slams the Democrats for failing to provide a budget for FY2011:
Having shoveled out trillions of dollars in new spending and debt, House Democratic leaders now admit they cannot budget for all of it – and won’t even try. For the first time, the House will fail even to propose a budget. Instead the Democratic Majority will resort to an ad hoc, spend-as-you-go process that abandons any pretense of governing.
The primary responsibility of any Congress is to develop a budget for the next fiscal year. One hundred and ten Houses have managed to meet that responsibility, even when the chambers were narrowly divided along partisan lines, and when control between Capitol Hill and the White House was divided between Republicans and Democrats. In this year, Democrats have an 18-seat majority in the Senate, more than a 70-seat majority in the House, and they control the White House. What possible excuse could Democrats have for not producing a budget, other than incompetence or dishonesty?
In contrast, the Republicans list a number of spending proposals to close the budget gap, most of which has already been introduced to the House and ignored by Nancy Pelosi. It counters the entire narrative of the Party of No, showing that Republicans have attempted to offer ideas to reduce spending and the national debt, or at least to slow down the growth in both. Had Democrats decided to actually produce a budget, they would have had to consider the following:
- Cancel Unused TARP Funds. Prohibit the Treasury Secretary from entering into new commitments under the Troubled Asset Relief Program [TARP]. Ending TARP would prevent up to $396 billion in additional disbursements; CBO estimates savings of $16 billion. H.R. 3140 introduced by Rep. Tom Price of Georgia.
- Cancel Unspent ‘Stimulus’ Funds. Rescind all unobligated budget authority authorized under the “stimulus” bill and dedicate to deficit reduction. Saves up to $266 billion. H.R. 3140 introduced by Rep. Tom Price of Georgia.
- Cut and Cap Discretionary Spending. Return non-defense discretionary spending to pre-Obama (fiscal year 2008) baseline levels. Saves up to $925 billion. Legislation introduced by Reps. Ryan and Hensarling (H.R. 3964) and Rep. Jim Jordan of Ohio (H.R 3298) include caps on discretionary spending.
- Reduce Government Employment. Hire one person for every two who leaves civilian government service until the workforce is reduced to pre-Obama levels (exempting the Departments of Defense, Homeland Security, and Veterans Affairs). Saves an estimated $35 billion. H.R. 5348 introduced by Rep. Cynthia Lummis of Wyoming.
- Freeze Government Pay. Freeze Federal civilian pay for 1 year. Saves an estimated $30 billion.
- Adopt the Legislative Line-Item Veto. Enact a constitutional line-item veto law. The President’s FY 2011 budget included terminations, reductions, and savings that would achieve $23 billion in one year. While Congress may not accept all these savings, the Line Item Veto can help reduce spending. H.R. 1294 introduced by Rep. Paul Ryan of Wisconsin.
- Reform and Bring Transparency to Fannie Mae and Freddie Mac. Reform these companies by ending conservatorship, shrinking their portfolios, establishing minimum capital standards, reducing conforming loan limits, and bringing transparency to taxpayer exposure. According to CBO, the cost to taxpayers of putting government in control of Fannie and Freddie is $373 billion through 2020. Saves an estimated $30 billion. H.R. 4889 introduced by Rep. Jeb Hensarling of Texas. H.R. 4653 introduced by Rep. Scott Garrett of New Jersey.
- Create a Sunset Commission. Establish a commission to conduct systematic reviews of Federal programs and agencies, and make recommendations for those that should be terminated; and provide for automatic sunset of programs unless expressly reauthorized by the Congress. H.R. 393 introduced by Rep. Kevin Brady of Texas.
The biggest gain would come from rolling back non-defense discretionary spending to FY2008 levels, which would save $925 billion over ten years. That, by the way, was the first of the Democratic Party budgets produced by Nancy Pelosi after taking the gavel in January 2007. It might be better to go back to FY2000 or FY2001, before Republicans and Democrats combined to add hefty increases in nondefense discretionary spending, but FY2008 is at least an improvement — and a good start.
Fannie and Freddie reform might be the most stabilizing of the proposals. Except for the unfunded mandates of Social Security and Medicare, Fannie/Freddie represent the greatest threat of potential future liabilities for the American taxpayer. Instead of containing that damage, Congress allowed the Obama administration to uncap the Fannie/Freddie line of credit, making their bailouts bottomless. Until we rid ourselves of that liability and force Fannie, Freddie, and the FHA to return to proper lending standards, we risk further collapses.
The Republicans have published their ideas on how to return to fiscal responsibility and accountability. It may not be complete, but it’s better than anything seen from the Democrats, who seem intent on proving that they can’t even budget, let alone govern.
Republicans are also launching their America Speaking Out project, which will allow Americans to give feedback to their elected representatives about cutting spending and restoring fiscal responsibility. I’ll talk with Rep. Michele Bachmann about that today on The Ed Morrissey Show, which starts at 3 pm ET!
Update: My point on budgets was really limited to the House, not Congress as a whole, although I don’t believe that we’ve had a Congress that has failed to produce a budget at all. We’ve had plenty of them not produce a budget on time. Thanks to Dustin at the Rightosphere for the clarification.
Update II: To Dustin’s point, the Republican Congress in 1999 failed to approve a final budget resolution, as noted by Ben Daniels on Twitter. The House did, however, produce a budget that stalled in the Senate. It’s still a good point to make, although it’s equally good to note that in 1999, a Republican Congress was dealing with a Democratic President.