As the public debate swirls over whether and how to limit the size and cost of the federal government, The Heritage Foundation’s longstanding efforts to shrink the government gain ground.
In May 2010, Heritage published Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity. The Heritage plan proposes to balance the federal budget within a decade and keep it balanced forever at no more than 18.5 percent of the total output of the American economy in goods and services in a single year, called gross domestic product (GDP). The government currently spends over 23 percent of GDP — which means that government is nearly a quarter of the depressed American economy.
The delegates to the Republican National Convention in Tampa, Florida, recently adopted a platform for their party noting that the federal government is “financially broken” and calling for “cutting spending” and “balancing the budget.” Congressman Paul Ryan (R-WI), addressing those delegates on August 29, 2012, said that “we will keep federal spending at 20 percent of GDP, or less.” Previously, President Obama noted, disparagingly, on June 4, that the Republican Party believes that “we have to drastically shrink government.”
For decades, Heritage has encouraged the public to focus on the importance of limited government in maintaining our liberty. The current public debate may well bring about a healthy, sharp focus on whether and how to reduce the size and cost of the federal government.
The public debate reflects progress toward the key Heritage fiscal objective: to drive down federal spending toward a balanced budget not to exceed 18.5 percent of GDP without raising taxes, while maintaining a strong national defense.
As it has for the past two years, so too in the coming years, Heritage will continue to fight for Saving the American Dream. The plan advances the principles of limited government, free enterprise, individual freedom, traditional American values, and a strong national defense. With national attention now focused on reducing the size of the government relative to the size of the economy — that is, shrinking the size and cost of government — key Heritage ideas are on the march.