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View Full Version : Here’s a Promising Plan to Finally Get a Grip on Federal Spending




Swordsmyth
07-27-2019, 05:33 PM
The massive spending deal, negotiated by Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi and agreed to by the president, looks poised to kill off the Budget Control Act of 2011—the law that was meant to restrain federal spending.
With that law on the way out, the question arises: Where can fiscal conservatives turn to exert real and lasting fiscal discipline?
Thankfully, two members of Congress have introduced a bill to do just that.
The Maximizing America’s Prosperity Act—or MAP Act—is a bill proposed by Rep. Kevin Brady, R-Texas, and Sen. Mike Braun, R-Ind., that would limit federal spending to a fixed portion of the economy, adjusted for economic conditions.
The bill would enforce that spending limit by triggering automatic spending cuts when Congress fails to abide by the cap. The spending cap would then be slowly lowered year by year to achieve budget balance.
The end goal of this bill is to get federal spending back down to the level of federal revenue. This would bring the country leaps and bounds closer to the lean federal budget we need and toward finally stabilizing the debt.
The MAP Act builds off the best parts of the 2011 Budget Control Act and would correct some of its shortcomings, such as broadening the scope of spending that can be cut and doing away with the defense/nondefense bifurcation.
The Budget Control Act was limited by the fact that its spending caps only applied to about one-third of the federal budget—discretionary spending—while nondiscretionary (or mandatory) spending was allowed to continue growing unabated. In addition, it placed separate caps on defense and nondefense spending, creating incentives to lift the caps on both sides.
Spending on mandatory programs like health care and retirement are the real drivers of growth in our deficits and debt. By largely exempting these programs from spending limits and cuts, the Budget Control Act failed to address a structural defect that continues to plague our budget.
The MAP Act takes a better approach. It would fold all spending that isn’t interest on the debt under a single spending cap.
This would address both problems with the Budget Control Act. By making all programs subject to cuts, it would increase the likelihood of Congress agreeing on a savings package even though it may contain some things different lawmakers may not like.
In addition, the MAP Act would take important steps to account for the laws or provisions that require private actors, states, or local governments to spend their own money to carry out federal programs.
The MAP Act would subtract these unfunded mandates from the spending caps, preventing politicians from pushing spending binges off the federal balance sheet onto other entities, like states.
The MAP Act is not perfect. Like the Budget Control Act, it would exempt certain programs from its automatic spending cuts or sequestration—mostly mandatory spending programs like Social Security and other designated benefit and welfare programs.
Additionally, the MAP Act would limit required spending cuts to a maximum of 5% of the overall budgets of affected programs, even though some programs may need more severe cuts.
Nonetheless, the MAP Act would be a strong and needed step forward. Congress needs fiscal rules to restrain and reduce its spending and the federal debt. Without effective fiscal restraints (https://www.heritage.org/blueprint-balance/policy-agenda/fiscal-restraint-the-budget-process) as part of the budget process, lawmakers are prone to support bloated programs and unsustainable spending increases like the one we’re witnessing now.

More at: https://www.dailysignal.com/2019/07/25/heres-a-promising-plan-to-finally-get-a-grip-on-federal-spending/

Zippyjuan
07-27-2019, 05:54 PM
The Budget Control Act was limited by the fact that its spending caps only applied to about one-third of the federal budget—discretionary spending—while nondiscretionary (or mandatory) spending was allowed to continue growing unabated.

Which is exactly what this plan does as well. It exempts non-discretionary spending too.


The MAP Act is not perfect. Like the Budget Control Act, it would exempt certain programs from its automatic spending cuts or sequestration—mostly mandatory spending programs like Social Security and other designated benefit and welfare programs.

Additionally, the MAP Act would limit required spending cuts to a maximum of 5% of the overall budgets of affected programs, even though some programs may need more severe cuts.

So a cut of not more than five percent to less than one quarter of the entire budget. Take a $4.5 trillion budget and cut programs by about $60 billion. Assuming your "exempted programs" don't grow by more than that. If we make the assumption that there are no changes in either that other spending or tax revenues, we can get rid of our $1 trillion deficit in about 17 years- assuming they stick with the plan.


The end goal of this bill is to get federal spending back down to the level of federal revenue. This would bring the country leaps and bounds closer to the lean federal budget we need and toward finally stabilizing the debt.

"Leaps and bounds" meaning reducing the total budget by 1.3% a year (assuming the maximum cut is applied to all of the non-exempted parts of the budget). That is the maximum cut- actual cuts may be smaller.

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