The Republican Study Committee (RSC) has released a 10-year budget blueprint that reins in federal spending, balances the budget, and modernizes the federal budget process. While President Obama’s budget would bury the nation in $9.5 trillion of additional debt over the next decade, the RSC would accumulate just $1.8 trillion of debt over the next eight years before balancing the budget in 2020. And they accomplish this without raising taxes.
Much of the RSC budget builds on the bold plan offered by House Budget Committee Chairman Paul Ryan (R-WI). Both plans create a Medicare premium support system built on choice, competition, and transparency, thus averting program bankruptcy. Both turn Medicaid into block grants to the states. Both plans also repeal Obamacare, fund defense at the President’s level, and support revenue-neutral tax reform that lowers tax rates and broadens the tax base.
The RSC plan goes beyond the Ryan plan in a few areas. The RSC plan implements Medicare premium support reforms sooner by providing an opt-in in 2017. It provides a smaller Medicaid block grant than the Ryan proposal, cuts more deeply into other mandatory spending like farm subsidies, and cuts domestic discretionary spending more sharply. The RSC would also gradually increase the Social Security eligibility age. Overall, the RSC would spend $9 trillion less than is indicated by the Congressional Budget Office’s 10-year baseline.
Like the Ryan plan, the RSC plan requires a two-thirds supermajority vote to bypass its budget rules. These reforms will provide a budget process more in line with America’s budget priorities.
The RSC budget could be improved by addressing Social Security more aggressively. Also, capping the explosive growth of anti-poverty spending (such as the plan authored by Representative Jim Jordan [R-OH]) would help Washington design a more rational welfare system. The substantial proposed reductions in total domestic discretionary spending are impressive, but are otherwise difficult to assess without more details about where the cuts would fall.
Overall, the RSC budget provides yet another strong contrast to President Obama’s timid budget of rising spending, soaring debt, and higher taxes. While the President’s budget would continue running trillion-dollar deficits even during the (assumed) peace and prosperity at the end of this decade, the RSC proposal actually balances the budget. It reforms taxes and returns spending to pre-recession levels. Like the Ryan plan, the RSC budget starkly refutes those who claim that controlling deficits without tax increases is impossible or that rising government spending and deficits are inevitable.