GOP set to roll out $2.5 trillion in cuts over next 10 years
posted at 10:12 am on January 20, 2011 by Ed Morrissey
First came the ObamaCare repeal vote, and now Republicans on Capitol Hill will roll out their next effort to fulfill their midterm campaign pledges: massive budget cuts. The Daily Caller reports that the GOP in both chambers will introduce bills to strike $2.5 trillion in discretionary spending over the next ten years in order to bring federal spending in those areas to 2006 levels. However, Republicans expect considerable pushback from the White House and Democrats in the Senate:
Jordan’s “Spending Reduction Act” would eliminate such things as the U.S. Agency for International Development and its $1.39 billion annual budget, the $445 million annual subsidy for the Corporation for Public Broadcasting, the $1.5 billion annual subsidy for Amtrak, $2.5 billion in high speed rail grants, the $150 million subsidy for the Washington Metropolitan Area Transit Authority, and it would cut in half to $7.5 billion the federal travel budget.
But the program eliminations and reductions would account for only $330 billion of the $2.5 trillion in cuts. The bulk of the cuts would come from returning non-defense discretionary spending – which is currently $670 billion out of a $3.8 trillion budget for the 2011 fiscal year – to the 2006 level of $496.7 billion, through 2021.
Going back to 2006 levels would reduce spending by $2.3 trillion over ten years. It is a significantly more drastic cut than the one proposed by House Republican leadership in the Pledge to America last fall, which proposed moving non-defense, non-mandatory spending for the current fiscal year back to 2008 levels, which was $522.3 billion. Jordan’s proposal includes the recommendation from the Pledge for the current fiscal year, which ends in September.
The proposal would cut the federal work force by 15 percent and freeze automatic pay raises for government employees for five years.
Republicans will certainly score some points with their base for following through on cuts, especially since they go even further than promised. This essentially takes the federal budget back to the level last approved by Republicans, at least in non-defense discretionary spending. Eliminating subsidies for public broadcasting and Amtrak will play well with Tea Party activists and other grassroots conservatives.
It makes a great start on deficit reduction — but only a start, and really only an appetizer. The cuts amount to an average reduction of around $250 billion a year, which amounts to only one-sixth of the federal deficit this year. The main drivers of deficit spending are Social Security, Medicare, Medicaid, and other mandatory spending on entitlements. Even if Democrats agreed to these cuts, Congress would have to raise the debt ceiling by a significant amount to allow Treasury to sell bonds to fill the gap.
And don’t expect cheers from the White House in any case. Jordan’s bill ends the stimulus program and sends its remaining $45 billion back towards deficit reduction, which means the end of $6 billion earmarked for states already in budgetary crises. Another $16 billion meant to bolster Medicaid will make that situation even worse, since it will transfer more costs to the states (or more accurately, keep the states from transferring costs to the federal government) and set back the ObamaCare rollout. Expect Democrats to ramp up attacks on spending cuts using the same anecdotal strategy they attempted with the ObamaCare repeal vote this week.
Republicans have begun their majority session in the House well, but they will need to strengthen their resolve in the weeks ahead — especially since they will have to address entitlements in order to adhere to their midterm promises.