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  • Supercommittee: Maximize Nonsecurity Spending Cuts, Do Not Raise Taxes

    The Heritage Foundation has consistently urged, and continues to urge, that the congressional Joint Select Committee on Deficit Reduction, known as the Supercommittee, “go big” with its recommendations, to “drive federal spending down — including by fixing ever-expanding entitlement programs — toward a balanced budget, while preserving our capability to protect America, and without raising taxes.”  Heritage provided a detailed plan by which the Supercommittee could accomplish that goal.  Heritage President Edwin J. Feulner made clear that “[t]his battle is about both getting spending under control and limiting the size and scope of government.” As he said, “[m]ore taxes means more government.”

    Public discussion of the Supercommittee has focused on two possible outcomes — either the Supercommittee process reduces future deficits by $1.2 trillion or automatic statutory adjustments in discretionary spending limits (enforced by automatic cuts called “sequestration”) under the Budget Control Act (Public Law 102-25)(BCA) reduce future deficits by $1.2 trillion.  There has been little focus on the third possible outcome, which is a combination of the first two.  Under the third possibility, the Supercommittee process yields some deficit reduction, but less than $1.2 trillion, and sequestration makes up the difference, yielding a total of $1.2 trillion in deficit reduction.

    Section 401(b)(2) of the BCA set as a goal for the Supercommittee “to reduce the deficit by at least $1,500,000,000,000 over the period of fiscal years 2012 to 2021.”  Sections 401(b)(3)(B) and 402 require the Supercommittee to vote, not later than November 23, 2011, on “a report that contains a detailed statement of the findings, conclusions, and recommendations” and “proposed legislative language to carry out such recommendations.”  Congress will then consider the Supercommittee legislation under expedited procedures, the key features of which are that the legislation is not subject to amendment and receives a vote on final passage not later than December 23, 2011.

    Under sections 251 and 251A of the Balanced Budget and Emergency Deficit Control Act as amended by sections 101 and 302 of the BCA, if January 15, 2012, arrives and Supercommittee legislation has not been enacted that achieves at least $1.2 billion in deficit reduction for fiscal years 2012 through 2021 (that is, 80% of the goal assigned to the Supercommittee), automatic statutory adjustments in discretionary spending limits take place for fiscal years 2013 through 2021.  To determine how much deficit reduction is necessary to meet those adjusted discretionary spending limits for each of the nine fiscal years of 2013 through 2021, section 251A(3) provides as follows:

    (3) CALCULATION OF TOTAL DEFICIT REDUCTION.—OMB shall calculate the amount of the deficit reduction required by this section for each of fiscal years 2013 through 2021 by—

    (A) starting with $1,200,000,000,000;

    (B) subtracting the amount of deficit reduction achieved by the enactment of a joint committee bill, as provided in section 401(b)(3)(B)(i)(II) of the Budget Control Act of 2011;

    (C) reducing the difference by 18 percent to account for debt service; and

    (D) dividing the result by 9.

    Thus, if Supercommittee legislation is enacted by January 15, 2012, but it provides less than $1.2 trillion in deficit reduction over fiscal years 2012 through 2021, the Office of Management and Budget will calculate the amount of spending cuts necessary to achieve a $1.2 trillion reduction, giving “credit” toward those spending cuts for the amount of deficit reduction achieved in the Supercommittee legislation, if any is enacted, and applying some additional rules relating to direct spending and Medicare.  The reduced spending limits as so calculated would then be enforced through a statutory sequestration process, beginning with a sequestration on January 2, 2013, for fiscal year 2013.

    Heritage hopes conservatives on the Supercommittee and in Congress as a whole will stand tall and protect Americans from a tax increase.  As Dr. Feulner said, more taxes means more government.  If the Supercommittee has the will to do so, it can muster even more than its statutory deficit reduction goal through spending cuts alone.  The Supercommittee should not recommend a tax hike and the Congress should not hike taxes.  Period.

    If the Supercommittee pulls together seven votes for spending cuts only, but the spending cuts are not large enough to reach $1.2 trillion in deficit reduction, then the automatic statutory adjustments in discretionary spending limits will make up the difference, to provide for $1.2 trillion in deficit reduction.  As a practical matter, Congress will, either in the Supercommittee legislation itself or in legislation enacted promptly thereafter, need to correct the BCA impact so as to fully fund defense notwithstanding the automatic statutory adjustments, with associated offsetting reductions to non-security spending.

    Conservatives, please remember and achieve the objective: drive federal spending down — including by fixing ever-expanding entitlement programs — toward a balanced budget, while preserving our capability to protect America, and without raising taxes.

    Posted in Featured [slideshow_deploy]

    8 Responses to Supercommittee: Maximize Nonsecurity Spending Cuts, Do Not Raise Taxes

    1. Jeff, Illinois says:

      Same old tired GOP talking point(s) . . over and over . . favoring the wealthy . . Oh wait, I mean the JOB CREATORS. The GOP thinks the american public is completely stupid. The world is much smaller today than in the past. Propaganda will be discerned and dismissed! . . It's over!! It's time for intelligent debate . . and the GOP better find a creditable candidate to run for president, not ill-informed idealogues, just grandstanding to appeal to the bumper sticker crowd.

    2. America is tracking the trend line to End Of Empire laid by
      Rome-Spain-Holland-England
      Over extension worldwide on Debt.
      Small group own most of the wealth
       
      10% own 70% net wealth  80% own 15%
      10% own 70% financial wealth  80% own 7%
      10% take 50% individual Income  50% take 13%
       
      70/15  70/7  50/13  = 190/35

      Simplistic– clear picture—can you see it? Congress cannot! White House cannot!

      Each of 10% own $7 of net wealth and each of 80% own $0.18
      Each of 10% own $7 of financial wealth and each of 80% own $0.09
      Each of 10% take $5 of individual income and each of 50% take $0.16
       
      $7  to  18 cents ratio: 700:18
      $7 to 7 cents 700:7
      $5 to 16 cents 500:16

      Is that not a picture of Third World Country?
      Is that not a picture of England in End of Empire?
      Is that not a picture of a Dictatorship

      • Stirling says:

        Playing the wealth distribution card doesn't quite fit. The flaw with your numbers is that at any given time people (young and old ) are moving from one income class to annother based on their time in life and earning of wealth. Some start with nothing, some are fortunate enough to have wealth passed on to them by their parrents or grandparrents. Reducing this to sheer numbers is an insult to the american ideal of being able to overcome the hand you are dealt and succeed to a better outcome thru hard work. Hold up those 10% as examples of what the 80% can become if they don't become a mouthpiece for the media putting down the greatest country in the world.

    3. 1980—2010
      borrowed 13,000B.–Reagan 60% tax cut for top 1% started redistribution of income-wealth
      Today 10% own 70% net wealth–70% financial wealth-get 50% individual income
      80% own 15% net wealth–7% financial wealth-50% get 13% individual income
      That is why we went from top 5 to bottom 5 on Equality in Oecd nations.
      That is why we went from a Democracy to a Corporate Aristocracy

    4. LevinFan says:

      This is bit over my head, but this much I get: “more taxes means more government.”

      Hoping that every member of Congress gets the message!!

    5. Larry White says:

      It may be too simple and certainly too late but…Congress (535 elected members) has failed miserably in not passing budgets recently! What makes anyone believe 12 elected members can or will do any better? Only one dissenting vote on either side and they fail again._
      This is not politics as usual; The Liberal Democrat (missing “ic” mine) Congress has not passed a budget since April 2009! We know why…if the TRUTH OF THEIR SPENDING were known they would not be re-elected.. Thanks Heritage for shining the light every day.

    6. Stirling says:

      Big Government Left and Right are just putting on a political PR show for the country and world.. Financially they are talking pennies in a bucket of Trillions of dollars, and the results cant bind future congress anyway. Raising taxes would achive nothing anyway since any revenue increase would be thrown down the drain on more government programs which loose money hand over fist like Solyndra. Washington is the biggest PONZI Scheme in the world, they have long lost any financial sense and respect of those who elected them.

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