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  • RSC Balances the Budget While Obama Doubles Down on Debt

    Rep. Tom Price (R-GA)

    Last week, Congressman Jim Jordan (R-OH) and Tom Price (R-GA) introduced the Republican Study Committee (RSC) FY2011 budget. This is a welcome fiscal blueprint that would restore fiscal discipline to the nation and avert a Grecian formula meltdown. It also does an excellent job of drawing a sharp distinction between a conservative fiscal plan and the liberal proposal presented by President Obama’s budget. Comparing President Obama’s own budget projections to the RSC’s tells the story of two very different futures for the United States. While the focus is primarily spending and revenue targets, there are sound policy recommendations in the RSC blueprint. One budget sees a nation sinking deeper and deeper into debt while another envisions a significant reduction in spending growth and a return to balanced budgets within the decade.

    The numbers paint a striking picture:

    Deficits

    Obama: The 2019 deficit is projected to reach $908 billion, and in 2020 would climb to more than $1 trillion. Over ten years the Obama budget runs $8.5 trillion in deficits.

    RSC: Balances the budget within ten years and achieves surpluses in 2019 and 2020. Over ten years the RSC budget runs $2.5 trillion in deficits.

    DIFFERENCE: In a ten year window the RSC budget will run $6 trillion fewer deficits than the Obama budget.

    Debt

    Obama: The President’s budget will send debt held by the public to $18.6 trillion in 2020, up $11 trillion from the 2009 level of $7.5 trillion.

    RSC: Debt held by the public under the RSC plan will reach $12.9 trillion in 2020.

    DIFFERENCE: In 2020, the RSC budget projects debt held by the public $5.6 trillion under the President’s projection.

    Discretionary Spending

    Obama: Under the President’s plan discretionary spending is held relatively constant at approximately the FY2010 levels of $1.4 trillion. Over ten years the Obama budget expects to spend $13.6 trillion.

    RSC: Returns discretionary spending to FY2008 levels and freezes it until 2019. By 2016 discretionary spending levels will dip back below $1 trillion for the first time since 2005. The RSC accomplishes this goal by limiting spending and adopting sound policies including:

    • Eliminating Intercity and High Speed Rail Grants, saving $1.6 billion annually.
    • Enacting an earmark moratorium, saving approximately $15.9 billion per year.

    DIFFERENCE: Over ten years the RSC budget will spend $3.2 trillion less in discretionary spending than under the President’s budget.

    Entitlement Spending

    Obama: Spending on Medicare, Medicaid, and Social Security alone will reach $2.6 trillion by 2020. Bear in mind just five years ago, in 2005, total outlays were $2.5 trillion. This includes the wars in Afghanistan and Iraq and all domestic spending. While the Obama budget does note that his fiscal commission will examine the long-term fiscal outlook, it does nothing to restrain entitlement spending this year and the recently passed health package makes things even worse.

    RSC: Under the RSC budget spending on these three programs still increases, but at a slower rate. Though Social Security spending remains untouched, Medicare would grow at a rate equivalent to economic growth, and Medicaid would increase with inflation. The budget would also repeal the Troubled Asset Relief Program (TARP), which could save taxpayers up to $36 billion, and completely repeals the government takeover of health care (the Patient Protection and Affordable Care Act, and the Health Care and Education Reconciliation Act). Finally, to restrain future entitlement spending the RSC proposes adopting a key Heritage-Brookings Fiscal Seminar proposal that places Medicare on a limited 30-year budget. Currently, no such control exists and entitlement spending is permitted to grow unchecked.

    DIFFERENCE: Over ten years the RSC budget spends approximately $3 trillion dollars less on the major entitlements than the Obama budget.

    Taxes

    Obama: As Heritage budget expert Brian Riedl outlined in his backgrounder, the Obama budget would, “raise taxes on all Americans by nearly $3 trillion, and raise taxes for 3.2 million small businesses and upper-income taxpayers by an average of $300,000 over the next decade.”

    RSC: The RSC budget makes all the 2001 and 2003 tax relief, and the Alternative Minimum Tax “patch” permanent. In addition, the budget would fix the Congressional Budget Office baseline to assume current policy and put revenue and spending on equal footing. Under current CBO rules, tax hikes are assumed and must be “paid for” to simply continue the status quo.

    DIFFERENCE: The RSC budget would extend tax relief for all American families and businesses by $1.7 trillion in the first five years, and keep taxes around their historical levels.

    The contrast could not be clearer. President would continue to take the country down an unsustainable fiscal path caused by out of control entitlement spending. The RSC’s numbers would take the nation in the direction it needs to go.

    Posted in Economics [slideshow_deploy]

    15 Responses to RSC Balances the Budget While Obama Doubles Down on Debt

    1. Billie says:

      Stop exemplifying religious rules. Man rules his own here, Mr. Obama. It is Muslim heritage that you respect the dementia to rule mankind.

    2. Billie says:

      Man rules his own here, Mr. Obama. It is of your religious heritage that you respect the dementia to rule mankind.

    3. Barbara Frances Delo says:

      This makes good sense. The American people should be allowed to keep more of their own money so they can decide for themselves what their spending priorities are rather than have the government increasingly take more and more of it and make those spending decisions for them.

    4. Dusty, Chicago says:

      There is a consistency to "thought" on the Left…more government, less liberty, and the U.S. and Israel are to blame.

      I believe that the Left's fundamental flaws are best described by this fascinating young blogger in Chicago:

      http://rjmoeller.com/2010/06/the-lefts-fundamenta

      Do yourself a favor and check it out!

    5. Pingback: RSC Balances the Budget While Obama Doubles Down on Debt | Citizen Gravity -

    6. Doug, USA says:

      If this plan to improve fiscal responsibility were implemented, it would be a huge help to our country. However, this won't happen until lawmakers of both parties adopt a new economic mission. Growth is unsustainable as an end in itself. Without a culture of wisdom, self-responsibility, and a general desire to do what is right and good, leaders are left with "growth at any cost", including debilitating debt.

      This argument is made more effectively at Truthsavvy:
      http://www.truthsavvy.com/content/debt-storm-wins

    7. Mike - Orlando says:

      I must admit to not being much of a fan of either political party right now. While the GOP budget proposal is 'better' than Obama's (it would be hard to create something worse) it's still not good enough. The cuts in the size and scope of government are not deep enough, and the curtailment of spending not broad enough (especially in the entitlement realm) to get the country back where it needs to be. Simply put, the country needs to run a balanced budget asap that generates a revenue surplus each year. In so doing, deficit spending is eliminated, preventing any further additions to national debt. The surplus also would allow the country to retire some of the debt currently owned by those countries that do not have our best interests at heart (i.e. China).

      Eliminate deficit spending and reduce our national debt and the country will grow stronger and more competitive. Contrary to what our current delusional president believes, America must be a strong leader in the world community to insure peace continues around the globe.

    8. Larry Welch, Idaho says:

      Tom Price and his colleagues have done a good job putting this plan forward; however, I was struck by their acceptance of "discretionary spending" as a seemingly necessary part of government spending. True, they took an ax to major programs, but when faced with major deficit and debt disasters, ANY discretionary spending must be completely eliminated. I am not a Sarah Palin fan but, her repeated plea for "common sense" needs to be heard by all government officials.

    9. Randall Holland, Arizona says:

      This RSC plan will never see the light of day from the MSM. The MSM will attack the RSC plan as more breaks for the rich while hurting the poor and minority.

      http://www.youtube.com/watch?v=r7Rtw9c3HdQ

    10. Drew Page, IL says:

      What makes anyone think that Democrats are going to listen to anything that Republicans have to say?

      Actions speak louder than words — we will have our turn to act in November.

    11. Tim AZ says:

      This plan is just a slower pace towards the collapse of capitalism. It does nothing to stop the liberal's progression toward socialism it only delays it. A real plan would undo everything Mao-Bama has done to the American citizenry and the usurpation of the Congress through unelected officials in the first year. Then the govt. must be downsized to the minimum necessary to carry out its functions as declared in the constitution. Setting liberals back a hundred years is what is needed to insure America's future.

    12. Walt Lueth Midland, says:

      I agree with Larry from Idaho and Mike from Orlando.

      The RSC plan is a start but entitlements have to stop.

      We need to have a revenue surplus so we can start to

      reduce debt. Say no to deficiet spending.

    13. Pingback: RSC Gets Budget Right, Defense Wrong | Conservative Principles Now

    14. Al Wunsch, Fl says:

      The GOP plan is a step in the right direction but as is opined above, it is not enough. Freezing at the 2008 vice 2007 or earlier levels would be better in their plan. Their problem is that the approach is to pare back but essentially stay on the same tack. I suggest that we take an approach that recognizes that the Fed Gov't has grown too big and is in areas that belong to the States. How can we return to limited Gov't without turning the country on it's head. If we must continue programs such as Medicare/caid and Soc Sec, then they need to be completely refurbished in the concept of free market and individual freedom principles, not "gov't take care of you" approach. The farther away you get from the problem you are trying to address, the more it cost and the less effective it is.

    15. Warren Saccoman, Fl says:

      If everyone read the Fair Tax book and would implment it all problems would be solved. We would have no more TAX LIABILITIES, and we would once more be the country I grew up in. Back to the Gold Standard.

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