Rsc Budget Cut Cap and Balance--long Doc--final

7/31/2019 Rsc Budget Cut Cap and Balance--long Doc--final

1/43

REPUBLI

STUDY

COMMIT

CUT,CAPA Budget f

AN

EE

AND BALANrFiscal Year

Marsc.jordan.

E2013

ch 2012ouse.gov


2/43

REPUBLICAN STUDY COMMITT

CUT, CAP, AND BALANCE: A B

Page

EE

DGET FOR FISCAL YEAR 2013

ntentionally Left Blank


3/43



T A B L E O

CHAPTER 1

CHAPTER 2 S

CHAPTER 3 J

CHAPTER 4 B

APPENDIX C

A

A

S

EE


C O N T E N T

HE NEED FOR REAL

HANGE

PENDING

BS THROUGH GRO

UDGET PROCESS RE

ONSTITUTIONAL

UTHORITY STATEM

DDITIONAL RESOU

MMARY TABLES

S

5

14

TH 27

FORM 31

E

NT 34

CES 35

39


4/43



Page

EE


ntentionally Left Blank


5/43



CHAPTER 1AN OPENLETTERFROMTHEREPUBLICANSTUDYCOMMI

or the past three years, our nalumbered under the strangleh

excessive debt, record levels ospending, and job-killing governmeregulation. There is no doubt aboutPresident Obama and the Democratin the United States Senate have beedangerously asleep at the wheel of tAmerican economy. In February, thsubmitted a budget to Congress wit

the same tax and spend policies. Amore than 1000 days since the Senatpassed a budget, its clear that the SDemocrats have taken a pass at leaas a resultthe tough choices that lerequires.

As a result of this leadership void,

families and businesses have been fnavigate a winding, rocky, and uncWhether it is balancing the family bmake ends meet or making payrollthe week, American families and bucutting back and being more produ

F

EE


|THE NEED FOR REAL

TTEE(RSC)ion hasld of

federalntit: at best,c majoritynhee President

more of

d withe lastnateershipandadership

merican

rced tortain road.dget tot the end ofsinesses aretive. The

The evidence suggests thatfailed policies has been sub

President Obama, this natitwo punch of higher food apinching our pocketbooksthe shopping cart or the gapicture is not much better.most recent statistics, morethe unemployed have beenthan six months. And acro

hundreds of thousands offrustrated by fruitless attehave simply dropped out o

Our nation has reached a crand it will take strong andto guide the nation from itsand to fulfill the promise of

potential. The RSC believecontained within this budgBalancewill set the coursegrowth and job creation annation the opportunity to f

CHANGE

the cost of thesetantial. Under

n has seen the one-nd energy pricesvery time we fill uptank. The jobs

According to thethan 45 percent ofjobless for mores the country,

iscouraged workers,pts to find jobs,the labor force.

itical decision point,ffective leadershipeconomic slumberour countrys vast

that the policiestCut, Cap, andor economicwill give our

lfill its potential.


6/43



At a more fundamental level, the Rthat a budget should be anchored infoundational principles of individuliberty and a free-enterprise marketThis budget proposal reflects these

Specifically, Cut, Cap, and Balance laplan to balance the federal budget i

by cutting spending, getting governthe way so Americas businesses haability to grow and create jobs, refortax code to make our nation more cand providing for real improvemenMedicare, Medicaid, and Social Seclong-term.

The path this budget lays out woulevery American better off by creatinopportunity through a time-tested rtransforming economic stagnation ieconomic strength. As the old provthere is no time like the present. It imake a changereal changeand cnations challenges and set a true co

prosperity.

Jim JordanChairman, Republican Study CommittScott GarrettChairman, Republican Study Committand Spending Task Force

ROBBING FROM OUR CHILDREFUTURE. In February, President Oreleased his Fiscal Year (FY) 2013 bUnder the policies proposed by the

FY 2013 budget, the federal budget

EE


C believesthe twolsystem.eliefs.

s out afive years

ment out ofe theming thempetitive,s tority in the

makeg economiccipe fortorb goes,

s time tonfront oururse to

e

e Budget

NSama

dget.residentsill never

Figure 1 shows that there isof red ink under the PresidCBO estimates that the bud2013 will total $977 billion.record levels of governmenbecome the norm since Preoffice in January 2009. If wpath, by FY 2022, our defici

billion. The net effect of cotough decisions means thatand FY 2022, the President$6.4 trillion in deficit spendIts important to remembercatastrophic levels of spennorm. As of September 30,

deficits in U.S. history willlast five years. In the pastnational debt has grown as

2008: Debt passes $ 2009: Debt passes $

trillion marks; 2010: Debt passes $ 2011: Debt passes $trillion marks.

Unfortunately, the debt is eto grow rapidly into the futmost recent budget proposdebt increase to nearly $26with substantial tax increas

small businesses and famili

no end to the tidents budget. Theget deficit for FYThis is a result oft spending that haveident Obama tookcontinue on this

t will remain at $728

tinuing to postponebetween FY 2013policies will total

ing.

that theseing are not the2012, the five largest

ave occurred in thefour years, thefollows:

0 trillion mark;1 trillion and $12

3 trillion mark;

4 trillion and $15

pected to continueure. The Presidentsd that the nationalrillion by 2022, evens on American

es.


7/43



DEBT AND MORE DEBT.Much lindividual or family overspends, w

federal government spends more thin tax revenues, it goes into debt. Yyear, as the U.S. continues to overspborrow money to cover its overspenadd to our national debt.

Figure 2 shows how the Presidentsto address our nations debt. Begin2013, debt held by the public totalsof the economy. By FY 2022, this shat an historically high level of 76.3 p

h l f l h k f h l

977

702

539

0

200

400

600

800

1,000

1,200

2013 2014 201

BillionsofDolla

rs

Figure 1. The Pres

SOURCE: Congressional Budget Office

EE


ke when anen thean it collectsar-after-endanddingwe

budget failsing in FY8.7 percent

are remainsercent.

b

familys monthly income.the outstanding debt will rthe family becomes a greatthe credit card company thstarted spending recklessly.increased risk, the credit caincreases the interest rate o

Much like the example aboborrowing gets charged tonational credit card. In realis really just the sum of thedebt. We pay interest on ocardor our national debt.

d d b l

529488 510

602638

2016 2017 2018 2019 2020

dent's Budget: Deficits

t a certain point,ach a level at whichr financial risk ton before the familyTo adjust for this

d companythe credit card.

e, our nationshat amounts to aity, this credit cardnationalr national creditAs the national

f f

678728

2021 2022


8/43



INTEREST PAYMENTS AND THDOWNGRADE. When the U.S. ma

interest payments on its debt, therespend on other priorities such as nasecurity, scientific research, and heaFigure 3 shows just how much interpaying on our national debt.

Under the Presidents budget, in FYnation will collectively owe $237 bilinterest on our national credit card.amount in perspective, this equals nthe spending by the Departments ofAgriculture, Education, HomelandHousing and Urban Development, JState combined Under President

78.780.4

79.4

60

65

70

75

80

85

90

2013 2014 2015

Percentage

Figure 2. The PresiEconomy


EE


DEBTkes large

s less toionallth care.st we are

2013, ourion inTo put thisearly all of

ecurity,ustice, andbamas

The truth is that uncontrollvery real consequences. Othe first time in our nationnations long-term credit radowngraded from the goldrating. The rating agency,

justified the downgrade bathe US had not taken crediour nations overspending.as our nation continues to arun up the balance on ourour credit rating will be indowngrade. This could lecatastrophe that would impAmerican.

78.277.2 76.6 76.4 76.3

2016 2017 2018 2019 2020

ent's Budget: Debt As a Share of th

d spending hasAugust 5, 2011, forhistory, our

ting wasstandard AAAtandard & Poors,ed on the fact thatle steps to addressMuch like a family,ccumulate debt andational credit card,anger of anotherd to a financialact every single

76.3 76.3

021 2022


9/43



237 255300

0

200

400

600

800

2013 2014 2015

BillionsofDolla

rs

Figure 3. The Presi


9

8

9

4

6

8

10

12

14

16

Percenta

ge

Figure 4. The Presi

Share of T

EE


370

442

513

581

642

2016 2017 2018 2019 2020

ent's Budget: Net Interest Paymen

1011

1314

15

ent's Budget: Interest Payments as

ax Revenues

692743

021 2022

s

15 15

a


10/43



The danger we face lies in our excesspending and the growing interestthat result. As the interest paymentnational credit card take up an increlarge share of our nations income (trevenues), our already damaged crebecomes at risk of another downgra

Figure 4 shows just how much of ainterest payments are on the federal2013, interest will take up nine perctax revenues. The credit rating ageour credit rating on a number of facincluding how much the country spinterest payments on our national cThe so-called danger zone for do

generally occurs at a 14 percent interevenue share. According to the noCBOs latest analysis of the Presidethe U.S. will cross that threshold in

-585

-345-26

-409

-34

000

-800

-600

-400

-200

0

BillionsofDollar

s

Figure 5. Added

EE


siveayments

s on ourasinglyaxdit ratingde.

urdenbudget. Innt of ourcies baseors,nds on

edit card.ngrade

rest-to--partisants budget,019.

Families facing outsized cresee their interest rates rise,interest payments increase.card is no different. If we srates because of a credit dopressures such as inflation,event, our national credit cskyrocket.

Figure 5 shows how signifiinterest rates on our debt coverall budget picture. TheCBOs deficit projections oassuming no changes to cubars represent our deficitsin interest rates. According

will total nearly $3 trillion2022. If our nations borrointerest rates on governmebondsincrease by just onefor the next ten years, our n$1 trillion deeper in debt ovthrough-2022 period.

9 -302-220 -196

-258 -280

4-388

-317-302

-372-403

ost of One Percent Interest Rate In

Blue bars represent current

dit card balancesnd as a result,Our national credite higher interestngrade, economic

or some unforeseenrd tab could

antly higheruld impact ourblue bars representer the next ten yearsrent law. The greenssuming an increaseto the CBO, deficits

etween 2013 anding costsor thet notes, bills, and

-percentage pointation will be nearlyer the 2013-

-279-339

-412

-482

rease


11/43



CUT, CAP, AND BALANCE: THEupon the following common-sense

The budget should balance with Our proposal balances the

The budget should strengthensustainability.

Our proposal makes comincreased choices and impprograms bank account.

The budget should reduce spenmore effective and efficient. Our proposal cuts agency

Americas businesses have

The budget should terminate fe Our proposal does what A

these tough economic time The budget should prohibit ear

Our proposal prohibits ear

The budget should embrace refoit. Our proposal puts fair rule

stifles private-sector job cr

The budget should keep taxes lo Our proposal prevents tax

historic average, and make

Specifically, this proposal sets the

REDUCE SPENDING. Repeal ObamaCare to eliminate $ Set discretionary spending at $93

EE


PRINCIPLES. The Republican Study Commitrinciples:

in ten years without raising any taxes.federal budget in 2017.

edicare, Medicaid, and Social Security to ensu

on-sense reforms to strengthen Medicare andoved services, and saves Social Security by strhere are no changes for seniors currently 55 ye

ing and trim down the size of the federal gove

pending below 2008 levels and gets governmethe ability to grow and create jobs.

eral programs that are unconstitutional, duplimerican families across the country have beens.

arks.marks and eliminates pork-barrel spending.

rms that make it is easier to reduce spending t

s in place to prevent out-of-control Washingtoation.

w and include pro-jobs tax reform.increases, repeals ObamaCare tax hikes, keepss the tax code simpler, flatter, and fairer.

ollowing common-sense policies.

636 billion in additional spending over ten yea1 billion in FY 2013 (the level proposed in last y

tees budget is based

e their long-term

edicaid by offeringngthening thears and older.

rnment to make it

t out of the way so

ative, or harmful.equired to do in

an it is to increase

spending that

the tax burden at its

rs.ears House-passed


12/43



SAVE MEDICARE. Put Medicare on the path to lon

Medicare should transition to aRepublican budget, which provipower of competition among priwould not affect individuals cur

Strengthen Medicares long-terMedicare eligibility age for thosindividuals currently age 55 an

REFORM MEDICAID. Block-grant Medicaid and remo

empower the states with maximthereby improving the quality ovulnerable Americans. Based ofunding for Medicaid and the C

levels for the next ten years. Thi4160).

SAFEGUARD SOCIAL SECURIT Strengthen Social Securitys lon

the Social Security full-retiremeretirement age of 70. This polic

ENACT PRO-GROWTH TAX REF Prevent any new tax increases othat is simpler, flatter, and fairer

EE


-term solvency. The RSC believes, that over tholvent, premium-support system as proposedes Medicare enrollees a greater menu of choicvate insurance plans, and improves the qualityrently age 55 and older.

finances. This budget would slowly phase inborn in 1958 and after. This policy makes noolder.

e Washington D.C.s burdensome red tape. Tum flexibility to determine Medicaid eligibility

care and access to vital services for the neediethe model set by the successful welfare reforildrens Health Insurance Program (CHIP) wil

s proposal follows the RSCs State Health Flexi

.-term finances. This budget would slowly phat age for individuals born in 1958 and after tomakes no changes to individuals currently ag

RM.the American people. This budget proposesin line with the RSCs Jobs Through Growth A

e long term,d by the Houses, harnesses theof care. This policy

an increase in thehanges to

is budget wouldand benefits,t and mosts of 1996, federall be set at current

ility Act (H.R.

se in an increase inn eventual full-55 and older.

smarter tax codect (H.R. 3400).


13/43



THE LAUNCHING OFF POINT.tough choices lie ahead. While not

that our country will be on the rightplace? Figure 6 shows that our budbalance in FY 2017. This means thatpushing our interest payments to trioff our national credit card debt whSocial Security, upon which so manbrighter future for his children and

-723

-382

-177

-800

-600

-400

-200

0

200

2013 2014 2015

BillionsofDollars

Figure 6. The RSC'

SOURCE: Republican Study Committee

EE


here is no doubt that the road to a balanced bueasy, the proposals contained in this budget wi

path. What can Americans expect if this budget deficits would decrease from $723 billion inwe will not be irresponsibly charging our natillion-dollar levels. Instead, our nation will bele improving federal programs such as MedicaAmericans rely. Most importantly, every Amrandchildren.

-65

28 77 6289

125

2016 2017 2018 2019 2020 2021

s Path to Balance in 5 Years

Red bars represent deficits.

Blue bars represent surpluses.

dget will mean thatll be a guarantee

t were put intoY 2013 and reachnal credit card andble to start payingre, Medicaid, anderican can expect a

118

2022


14/43



CHAPTER 2

he American people know wpolitical class is unwilling oracknowledge: Washington D.

spending problem is threatening ou

prosperity. A recent Pew Researchstudy found that 7 in 10 Americansreining in our nations deficits shoulpriority for Congress. This represepercent increase from 2007. For theAmericans said taming deficits is juimportant to our nations future asagainst terrorist threatsechoing fo

Chairman of the Joint Chiefs of StaffMullens famous line that the singlthreat to our national security is ourThis recognition, and mounting convoters to pull the emergency brakespending in the 2010 election. WhilHouse Republican majority has fouthe tide, we must do more.

FREEZE DISCRETIONARY SPENIn FY 2013, the RSC budget proposediscretionary spending be at the levin last years House-passed budgetminus the sequestration under the B

T

EE


|SPENDINGat thenable to

C.sr nations

enterelieve thatd be a topnts a 30first time,t asefendingmer

Admiral, biggestdebt.

cern, ledn runawaythe new

ht to stem

ING.s thatl proposedesolutionudget

Until the budget is balanceassumes that total discretiofrozen at this $931 billion abudget is balanced, from F

discretionary spending is alinflation. Within the discrtotal, the RSC budget fundslevel as the House Republicfrom $554 billion in FY 201FY 2022.

In order to meet the RSC b

spending cap, it will be necprograms that are wasteful,constitutionally questionabsense reforms put forwardRSC Sunset Caucus, the RSor the RSCs Spending Rednumber of options:

ELIMINATE THE CORPOPUBLIC BROADCASTINdefinition, should not havesupported media outlets, esoften convey political newsFurthermore, the Corporati

, the RSC budgetary spending isount. After the2018-22, total

lowed to grow withtionary spendingdefense at the samean budget, growingto $699 billion in

dgets discretionary

ssary to eliminateduplicative, ore. The common-o this end by the

Repeal Task Force,ction Act include a

RATION FOR. A free society, by

government-pecially ones that soand opinion.ons mission of


15/43



ELIMINATE THE ECONOMICDEVELOPMENT ADMINISTRAT(EDA). The EDA is an improper fufederal government, essentially rediwealth in the name of economicdevelopment.

ELIMINATE THE LEGAL SERVICCORPORATION. This entity has ncontinued to offer services duplicatioffered by states, localities, bar assoand private organizations, but alsoin lobbying, advocacy of leftist causlitigation against the federal govern

ELIMINATE THE NATIONALENDOWMENT FOR THE ARTS.arts is an inappropriate function of tgovernment and is nowhere justifieConstitution. Support for the arts cand more properly be supported byfundsand local government funds.ELIMINATE THE NATIONAL LA

RELATIONS BOARD. The DepartJustice already oversees a wide varicriminal, and administrative issues,anti-trust, voting rights, and majoracquisitions and can surely handle cunfair labor practices. The departmdo so without the pro-big-labor biaspartisanship endemic to the NLRB.

ENTITLEMENT PROGREPEAL OBAMACARE. The RSCrepeals Obamacare and provides $0the next ten years This reduces ma

EE


IONction of the

stributing

ESot merelyve of thoseiations,as engageds, andent.

unding thehe federal

in then easilyprivate

BOR

ment ofty of civil,includingergers and

laims ofent couldand

AMS

budgetfor it overdatory

MAKE MEDICAID MORACCOUNTABLE, AND AMedicaid is a voluntary fpartnership program that sservices for the most vulneincluding the poor, chronicchildren, the elderly, and pMedicaid is the largest fedewelfare program, and it accof all federal transfer paymBesides often failing to proeven access to care, it groweach year while hamperingWashington red tape.

State and federal Medicaid

$400 billion in FY 2010, andannual increases of 10 percyears. Medicaids open-endstructure encourages statesexchange for receiving betpercent of federal matchingObamacares planned enrolnew beneficiaries, spendin

budgets. Even now, stateson Medicaid than anything

Separately, the ChildrensProgram (CHIP) provides afamilies above Medicaids ilevel. In both of these progrfocusing on the specific nee

states must maneuver thromaze of one-size-fits-all rulStates may petition the fedeexemptions, yet it can takedecision.

EFFECTIVE,FORDABLE.deral-statebsidizes healthcare

able Americans,lly ill and disabled,egnant women.ral means-testedounts for 40 percentnts to states.ide quality care ormore unaffordable

states with more

spending surpassed

estimates predictnt over the next tened entitlementto spend more ineen 50 and 74funds. With

lment of millions ofwill bankrupt state

re spending moreelse.

ealth Insuranceid to children income-eligibility

ams, instead ofds of their citizens,

gh a bureaucratics and mandates.

ral government forears to get a


16/43



H.R. 4160, the State Health Flexibilitlegislation would create a Medicaidblock grant that answers governorsmore independence to use federal fway that works for their state. Freespending at the FY 2012 level savesover ten years compared to the projincreases under current law.

This legislation would also encourabetter control waste, fraud, and abuproviding state policymakers certaiamount of federal assistance they caupon. Continuing these welfare prowithout such reforms is immoral anstates most vulnerable citizens wit

promises.

STRENGTHEN MEDICARE. Theadopts the Republican House budgsave Medicare from bankruptcy anchanges to Medicare for those curreyears and older. However, the RSCrecognizes that the U.S. is facing un

demographic challenges. Medicarecovers more than 47 million seniors,baby boomers reach retirement ageClearly, we live in an aging nation,roughly 40 million Baby Boomers wthe demands on the Medicare progrUnfortunately, Medicares financial

will be unable to meet the additionaplaced on the system. For FY 2012,revenues will account for more thanof all Medicare expenditures, and thwill spend $25.7 billion more than itAccording to the Congressional Bu

EE


y Act. Thisand CHIPcalls fornding in aing2 trillioncted

e states toe, whilety of the

n relygramsd leavesempty

SC budgetts plan tomakes notly 55

alsorecedented

urrentlyand 10,000very day.nd the

ill doubleam by 2023.

resources

l demandseneral50 percente trust fundtakes in.get Office,

daunting challenge. Medicwe do not improve the prothan later. Unless we take cto strengthen Medicares fiimprove the programs quaMedicare will not be in a pcurrent, let alone future, beTo address these challengesour budget proposes graduMedicare into a health insusimilar both to the system tCongress and their staffs ecurrent Medicare Part D prwhich allow seniors to choprovided on a regulated ex

changes would not affect acurrently 55 years of age or

By introducing the powerfchoice and competition inplans and providers will bedeliver value for taxpayer adollars. The similar approa

Employee Health Benefitsthe Medicare Part D progrademonstrated success in coof healthcare costs while insatisfaction and quality of cBeginning in 2023, enrolleecreated private insurance

premium subsidies to heltheir health insurance policdirect this premium supporplan of their choice offeredexchange. This includes pras a traditional fee for servi

re will go broke ifram sooner rather

ommon-sense stepsancial footing and

lity of care,sition to helpeficiaries.

, beginning in 2023,ally transformingance programat Members of

joy, and to thegram, both ofse among planshange. These

y individualolder.

l forces of consumeredicare, health careincentivized tond beneficiaryhes used by Federal

rogram (FEHB) andm havetrolling the growthreasing patient

are.

in the newlyarket would receive

p offset the cost ofes. Seniors cant payment to theon a regulatedvate plans as welle option. To


17/43



Under the RSCs proposal, wealthiewould be required to pay slightly mannual premiums than those with ffinancial resources, and conversely,seniors would receive higher healthsubsidies. Even today, in the curreMedicare program, wealthier seniorhigher premiums in the Medicare Pservice program. This reasonable prwould help put the Medicare progrwhole on more sound financial footiExperts on both sides of the politicathat providing Medicare enrollees amenu of choices, harnessing the pocompetition among private insuran

and improving the quality of care wsubstantially improve Medicares lofiscal outlook.

ADJUST THE MEDICARE ELIGIAGE TO REFLECT LIFE EXPECTSince Medicares creation in 1965, inadvances in science and medical tec

have increased average life expectaresult, the average length of time inare covered by the program has incrwell. According to the U.S. CentersControl and Prevention, the averagexpectancy in the U.S. was 78.7 year1965, it was 70.2 years. We have evebelieve this trend will continue.

Not only are Americans living longare also living better. To address thedemands on Medicare, this budgetraising the age of Medicare eligibilitmonths every year beginning with t

EE


seniorsore inwerpoorerinsurancet

s payrt B fee-for-

oposalm as ang.

aisle agreegreaterer ofe plans,

ouldng-term

ILITYNCY.dependentnology

cy. As aividualseased asfor Diseaselife

s in 2010. Inry reason to

r, but theyincreasedroposes

y by twoose born

the rising costs of health caGovernment Accountabilitthat each year, Medicare mbillion in improper paymefraudulent or erroneous ovhealthcare providers. MalcHarvard University, a top scare fraud, argues that estiauditors do not accuratelyimproper payments. Sparroimproper payments accounpercent of federal health sp$120 billion.

A separate analysis from thestimates that cutting the

payment rate by 50 percentbillion in savings for next yWhile this budget does notsavings from reductions infraud, and abuse, the RSCfraud, and abuse must be aSTRENGTHEN SOCIAL S

RSC budget makes no chanSecurity for those currentlyThis budget would slowlyin the Social Security full-reindividuals born in 1958 an

Social Security is the nationprogram and an essential p

millions of Americans. In 2time in the programs histobegan operating at a cash dmore on benefits than it coltaxes. Over time, this growdrain the Social Security tr

e. The independentOffice estimateskes about $17ts, defined asrpayments to

om Sparrow ofpecialist in health-ates by federaleasure all types of

w believest for as much as 20nding, or nearly

e Cato Instituteedicare error-

would result in $29ar alone.assume explicit

edicare waste,elieves waste,dressed.

ECURITY. The

ges to Social55 years and older.hasein an increase

tirement age ford after.

s largest singlert of retirement for

010, for the firsty, Social Securityficit and spendingects in payrolling cash deficit willst fund, and by


18/43



reforms are delayed, the deficit gromanageable. Fortunately, there is aThe RSC proposal would begin phareforms that protect seniors and preSecurity for future generations. Thiwould not affect those currently 55and older.

Specifically, we propose slowly incrretirement age to 70 years. This woaccomplished by increasing the full-age in two-month-per-year incremeworkers currently under 55 years olSpecifically, this proposal would infull-retirement age to 66 years and 2starting with those born in 1958. Th

retirement age would increase in twincrements per year, reaching 67 forin 1963 or later. For those born in 1the full-retirement age would remaiyears old.

This adjustment in the retirement arealign the Social Security normal re

age to account for dramatic increaseexpectancy since the programs creanoted by the Social Security Adminisince the program first began payinSocial Security benefits in 1940, theexpectancy for men reaching age 65increased nearly four years to age 8women reaching age 65, the averag

expectancy has increased nearly six84.

This common-sense, incremental approtects individuals near retirementchanges for younger workers comm

EE


s lessbetter path.ing in

serve Socialproposalears old

asing full-ld be

retirementts for

d.rease themonths

en, the full-

o-monththose born78 or later,

n at 70

e wouldtirement

s in lifetion. Asstration,

monthlyverage lifehas. Forlife

years to age

proachand makes

ensurate

OTHER SAVINGBalancing our budget is notCongress does not addressspending. Once Congress cmandatory programs autotaxpayer dollars each year.almost two-thirds of our na

budget.

While Social Security, Mediare among the most well-kprograms, the federal budgother mandatory programstaxpayer dollars for other pFor example, other mandat

includes providing benefitsrecipients, federal employestudents, to name a few. Inprograms spend almost 20nations taxpayer dollars.

Unfortunately, these progrregular oversight through

spending process. As a resperforming programs can cmoney indefinitely. The GAccountability Office (GAannual reviews in 2011 andduplicative or overlappingprograms. Indeed, Congreone significant program in

While these reports coveregovernment, they illustratechallenge confronting Conresponsibility that your taxused wisely. The savings obelow constitute a necessar

OPTIONSpossible if

mandatoryreates them,atically spend

They account fortions $3.6 trillion

care, and Medicaidown mandatoryt contains many

that redistributeurposes.ry spending

for welfares, farmers, andfact, theseercent of our

ms do not receiveongress annual

lt, poorlyontinue wastingvernment) released two2012 that list asmore than 1,500s has not eliminated

ore than a decade!

the entire federalthe scope of theress to fulfill itsayer dollars betions outlinedstep towards


19/43



INCOME SECURITYBUDGET FOR MEANS-TESTEDPROGRAMS. In 1996, a Republicapassed, and Bill Clinton signed, theResponsibility and Work OpportuniReconciliation Act. This law turnedFamilies with Dependent Children (

program into a reformed Temporarfor Needy Families (TANF) prograHowever, 16 years later, there are stapproximately 70 means-tested welfspending programs. Since Presiden

Johnson declared a War on PovertAmericans have spent $16 trillion otested welfare. All levels of govern

spend another $10 trillion over thebased on recent projections.

A means-tested welfare program prbenefits to individuals based on incin contrast to Social Security, Medicother such entitlement programs thbenefits linked to contributions ma

individual. In order to confine beneintended beneficiaries, means-testephase out as income increases. Theouts, along with the tax code, resultextremely high implicit marginal tamany individuals. These rates can epercent. In other words, some indivmade financially worse off by gettin

government assistance and earningmoney than by staying on governmassistance. The RSC proposes cappispending for these benefits, limitingof means-tested government benefitwill cause the return from work to i

EE


ELFARECongress

Personaltythe Aid toAFDC)

Assistance.

illaret Lyndon in 1964,means-ent will

ext decade

videsme. This isre, andt providee by the

fits toprograms

e phaseinrates for

xceed 100iduals areg off

morent

ng totalthe growth

s, whichcrease

130 percent implicit marginSpend Til the End, authored

Kotlikoff and Scott Burns, apeople are better off quittinliving off the government tand earning a low-wage. Abook, a married couple, eacwill have more spending por her job.

The RSCs Welfare Reform1167, would limit overall femeans-tested welfare progr2007 plus inflation growth.begin when the unemploy

6.5 percent. This is an overit does not require cuts to aInstead, choices would bebudget process. ConsistentRSC budget would cap matested welfare programs atinflation. This saves $260 b

FEDERAL RETIREQUALIZE CONTRIBUTIEMPLOYEES PENSIONCBO report found that, oncivilian employees receivebenefits than the average pemployee with similar char

this excessive benefit structbenefit system. Federal em1984 are entitled to a hybriincludes a 401(k)-style plangovernment matches up todefined benefit payment

al tax rate on her.

by Laurence

rgues that someg their jobs andan being self-reliant

ccording to theh earning $17,500,wer if one quits his

ct of 2011, H.R.deral spending onams to the level ofThis limit wouldent rate falls below

ll cap, which meansy specific program.ade through thewith this policy, thedatory means-

the 2007 level plusllion over ten years.

MENTONS TO FEDERALLANS. A recentverage, federal8 percent more inivate-sectoracteristics. Part of

re is the retirementloyees hired sincepension, which

that theive percent and a


20/43



number of years they worked. For t

federal worker who earns $80,000 aafter 30 years, this works out to $26,

Considering that federal workers coonly 0.8 percent of their pay to the FEmployees Retirement System, thisfor a shortfall. Taxpayers now chip ipercent of employees' salaries to kesystem solvent. The Middle Class Tand Job Creation Act of 2012 requirfederal employees to contribute motheir retirement annuity. However,were made for current federal emplRSC budget would require all federemployees to pay more towards the

retirement. This saves $110 billionyears.

ADOPT ACCURATE INFLATIONMEASUREMENT. Federal retireesreceive inflation protection for theirpensions based on the CPI-W (the cprice index for urban wage earners

workers) instead of the CPI-U (the cprice index for urban consumers). Taccording to most analysts, overstatactual level of inflation in the econohigher cost to taxpayers. The RSC bwould more accurately measure inflfederal retirees by basing it on the CU, resulting in a savings of $26 billi

years.

REFORM THE PENSION BENEFIGUARANTY CORPORATION. TBenefit Guarantee Corporation (PBsupporting federal agency created t

EE


e average

d retires400 a year.

ntributeederals a recipen 11.7p thex Reliefs newe towardsno changesyees. Thelr

ver ten

currentlyfederalnsumernd clerical

onsumere CPI-W,s they, at a

udgetation forhained CPI-n over ten

e PensionC) is a self-insure

insuring comparable risk b

private insurers, the PBGClevels to account adequatel

Congress alone has the autpremiums and has failed apremium levels. The inabiliproperly manage pensionpart, to the chronic and sevthe agency. At the end of Festimated liabilities exceedbillion. This budget recognreform the PBGC to ensuretaxpayer-funded bailout doSavings could potentially byears.

ADOPT A DEFINED COPLAN AND SLOW THEFEDERAL CONTRIBUTIFEDERAL EMPLOYEES HPROGRAM. The FederalBenefits Program (FEHB) pinsurance coverage to appr

million people, including feMembers of Congress, andThis is a consumer-drivencompeting private health plgovernment can pay up topremiums, and participantpercent of the premium pa

This level of premium suppwhat private sector compaprovide. This budget woulsupport for the FEHB progcover the first $5,000 of an ior the first $11,000 of a fami

cause, unlike

s unable to adjustfor risk.

ority to set pensionequately to adjustty of Congress toremiums has led, inre underfunding of2010, the PBGCs

d its assets by $23izes the need tothat a futurees not occur.

$10 billion over ten

TRIBUTIONROWTH OFNS FOR THEEALTH BENEFITSmployees Healthovides healthximately eight

deral workers,their dependents.rogram ofans. The federal5 percent of thepay, on average, 30ment.

ort is comparable toies currentlyoffer a premium

am that wouldndividual premiumly premium


21/43



AGRICULTURE SUBSIThe federal government distributes$10 billion and $30 billion in cash pfarmers and farmland owners eachof this money flows to producers ofwheat, cotton, corn, soybeans, and rbelieve agriculture cannot function

government subsidies, but fruit, velivestock, and poultry operations, wconstitute nearly two-thirds of the feconomy, receive relatively little assCongress directs most agriculture dlarge commercial farmers with averincomes of approximately $200,000.Government-wide spending reform

necessary to balance the budget, anfunded support for agriculture progshould not be exempt.

SUPPORT MARKET-BASED PROBY ELIMINATING THE DIRECT(DP) PROGRAM. The DP programcash subsidies, capped at $40,000 an

commodity producers. The paymebased on a historical measure of a fproduction acreage, and they do noon actual production or commodityDirect payments were originally est1996 as a transitional program. Hosubsidies have not been reduced ovThe Washington Post estimated that

2000 and 2006, the federal governm$1.3 billion in direct payments to pedo not even farm. Recently, the IowBureau proposed eliminating the DLike the Presidents FY 2013 budgetbudget would eliminate the Direct

EE


DIESbetweenyments toear. Most

five crops:ice. Some

ithout

etable,hichrmistance.llars toge annual

s are

taxpayer-rams

GRAMSAYMENTprovides

nually, to

ts arermsvary based

prices.blished inever, ther time.etween

nt madeople whoa Farmprogram.the RSCayment

PROHIBIT NEW ENROL

CONSERVATION STEWPROGRAM. The ConservProgram (CSP) provides anproducers for five years inundertaking various land iHowever, payments undermade to producers who haundertaken conservation m

Beginning in FY 2013, newprohibited from entering inThis policy would result inbillion in savings over ten ystated that the criteria useimprovements in existing cpractices are not readily apabsence of objective measuin higher payments than neproposed option is based oCommission on Fiscal RespReforms recommendationprogram.

REDUCE THE PREMIUMCROP INSURANCE PROuse the Federal Crop Insurprotect their crops from perpolicies that are sold and sevendors. The federal goverabout 60 percent of the preprogram. Beginning in FY

governments subsidy woupercent of the crop insuranwould result in a savings often years. Reductions of thsubsidy rate are unlikely tothe level of program partici

MENTS IN THE

RDSHIPtion Stewardshipnual payments toxchange forprovements.

the program can bee already

easures.

nrollees would beto the program.approximately $10.5ears. The CBO

to determinenservationarent, and the

ements could resultcessary. The RSCs

the Nationalonsibility andto put limits on this

SUBSIDY IN THERAM. Farmersnce Program toils by purchasingrviced by privatenment subsidizes

iums paid for this013, the federal

d be reduced to 50e premium. This$12.8 billion overs magnitude in thesubstantially affectation.


22/43



years. The private sector should be

for promoting its own products as itthe profits from the sales of these pr

ELIMINATE THE MARKET ACCPROGRAM (MAP). The MAP is inpromote overseas marketing of U.S.agricultural products. MAP funds cpromotions, market research, tradeadvertising campaigns, and other pdesigned to subsidize the sale of braproducts in foreign markets by privcooperatives, trade associations, anbusinesses. Among other egregiousthe MAP program has provided funUSA Poultry and Egg Export Councincludes such profitable companiesButterball, Tyson, Wampler, and Pethe U.S. Grains Council (which inclMonsanto).

Taxpayers should not be forced to ptab for this kind of corporate welfarNational Commission on Fiscal Res

and Reform targeted this program aneed of change. This program woulterminated in FY 2013, resulting in $savings over ten years. According tsome analysts believe MAP does nadditional funding because the exteit has developed markets or replaceexpenditures with public funds is n

ELIMINATE WOOL AND MOHASUBSIDIES. The federal governmeenacted price support for wool and1947, and the National Wool Act ofestablished direct payments for wo

EE


responsible

receivesoducts.

SStended to

nsumershows,ogramsnd-namete

funding,ding to theil (whichasdue) anddes

ick up the. Theonsibility

s one ind be2 billion ino the CBO,ot warrant

t to whichprivate

t known.

IRnt firstmohair in954l and

taxpayers about $46 million

This budget would return cdemand, and price of woolfree market.

HOUSING AND

PRIVATIZE FANNIE MA

MAC. More than nine outissued today are purchasedFreddie Mac and guaranteetaxpayer. This guarantee isnearly $170 billion tab the talready been charged to baiIn October 2011, the maximmortgages the Government

(GSEs) are permitted to bulowered from $729,750 to $the National Association ofSeptember average sale priwas $212,700).

This was a crucial first stepprivate capital to the housi

since gradually reducing thlimits will slowly expose a lhousing finance market tosecuritization. However, tundermined by the raisingHousing Administration (FThis merely rearranged taxthe credit risk of these mort

from the GSEs to the FHA.measurable amount of privactivity, the government mremove itself from being thparticipant.

over ten years.

ontrol over supply,and mohair to the

INANCE

AND FREDDIE

f every ten loansby Fannie Mae ord by the Americanin addition to thexpayers have

l out these entities.um size ofSponsored Entities

was automatically25,500 (according toRealtors, thee for existing homes

to attracting moreg finance market,

e conforming loanarger portion of therivate sectoris change wasof limits for Federal

A) eligible loans.ayer exposure to

gages by moving it

To have anyte mortgage marketst graduallydominant market


23/43



the enterprises share of the mortga

The practice of corporate subsidiestaxpayer bailouts in housing financstop. It is estimated that the U.S. tainvest $400 billion in Fannie Mae anMac before they are removed fromownership.

This budget recommends privatizinMae and Freddie Mac, winding dogovernment guarantee, and endingsubsidies. It also calls for measuresbring transparency and accountabilitwo GSEs. The savings would amoleast $43 billion over ten years. Thesignificant concern that the FHA wiltaxpayer bailout this year. Its reserrecord low, and delinquencies andits insurance book continue to mouPresidents FY 2013 budget indicateFHA is expected to be short more thmillion. Both the GSEs and FHA resignificant reform, and they shouldfundamentally restructured to bette

taxpayers going forward.

PROHIBIT FURTHER OBLIGATIFROM THE TROUBLED ASSET RPROGRAM. The Troubled Asset RProgram (TARP) was created by theEconomic Stabilization Act of 2008 tadministration to purchase trouble

While authority to make new communder the program expired in 2010,projects program expenditures willbillion annually over the next four ybudget prohibits further obligationsTARP, saving $7 billion over ten ye

EE


e market.

ndneeds topayer willd Freddieovernment

g Fannien their

taxpayerthat wouldty to thesent to ate is alsol need aes are at aefaults int. Even thethat the

an $600uiree

r protect

NSELIEFeliefEmergency

o allow theassets.

itmentsthe CBOaverage $2ears. Thisfromrs.

whatsoever of the CFPB an

new bureaucracy will increconsumers through the creburdensome regulations. Itfar-reaching rules on financto restrict credit for the verto protect. The RSC budgeteliminating the CFPB, saviapproximately $5.4 billion

END TOO BIG TO FAIL.Dodd-Frank went to great lbailouts, this law only sustthe Federal Deposit Insura(FDIC) the authority to accin order to bail out the credsystemically significant fiThe CBO projects the cost fauthority at $32.3 billion, alDirector Douglas Elmendorthe cost of the program wieconomic and financial eveinherently unpredictable. Ianother large-scale financia

creditors are guaranteed gocould cost much more.

Instead of rewarding corpotaxpayer dollars, this budgalternative to the FDICs toauthority by supporting a presponsibility of large, faili

hands of the shareholdersmanagers who run them, afinance them. This would sover ten years.

HIGHER EDUCA

its actions. This

se costs totion of news authority to writeial products is likelycustomers it seeksproposesg taxpayersver ten years.

hile the authors ofngths to denounce

ins them. It givesce Corporationss taxpayer dollarstors of large,nancial institutions.r this new

though CBOf has testified thatll depend on futurets that are

n other words,l crisis where

vernment bailouts

rate failure witht calls for an-big-to-fail bailoutolicy that places theg firms in the

ho own them, thed the creditors whoave $32.3 billion

ION


24/43



estimated to have provided more th

billion to about 8.5 million undergrstudents in FY 2010. While the profunded primarily through annualappropriations, a smaller part of thefunded through mandatory spendiRecent laws like the stimulus bill haprovided mandatory funding for thprogram to increase the maximum,discretionary grant award. This maadd-on is a permanent funding itemamount of money provided for it eaunspecified. Higher-education analHauptman has stated, We shouldincreases in Pell Grants may lead inreduce the amount of discounts theotherwise have provided to the reciare from poor families, and move thstudents would have received to otbudget eliminates the mandatory aPell Grants, which helps curb conceincreases in Pell Grants lead to highand less opportunity for those most

This saves $104 billion over ten year

END IN-SCHOOL SUBSIDIES FOUNDERGRADUATE STUDENTS.student aid costs continue to skyrocevidence that the provision of federaid has contributed to the increasincollege. In general, when financial a

programs make more money availaschools, these policies result in higheducation costs. This has negative ifor access and affordability. In fact,study found undergraduate educatihighly profitable business for nonpr

EE


an $33

duateram is

program isg.

vePell Grant

ndatory, and thech year isyst Artorry thattitutions towouldients, who

e aid theseers. Thisd-on forns thatr tuition

in need.

s.

RFederalet despitel studentcosts ofd

le torplicationsrecent

on to be aofit colleges

federal budget, the govern

federal student aid resourcthose aspiring to attend, orfour-year college. PresidenReduction Commission notsubsidies are based on famithe students enrollment inon the students ability to p

According to a recent papeBoard, the most importantenrollment decisions is howill owe at the completionis no evidence that eliminatinterest is critical to that amindividual matriculation.Act of 2011 ended in-schoolgraduate students, and theproposes a policy that woulsubsidies for undergraduatwould save $46.5 billion ov

ENERGY

APPROVE THE KEYSTOOPEN FEDERAL LANDSPRODUCTION. Gas pricedoubled since President Oband energy analysts predicAmericans than ever beforegallon this year. With increMiddle East, the United Sta

afford to ignore the policy rdependence on foreign oil.

The entire Keystone Pipelinheld up for more than threed d i t ll

ent can reduce

s without harmingalready attending, at Obamas Deficitd student loan

ly income prior tocollege, rather thanay after completion.

by The Collegeonsideration inmuch the studentf studies, and there

ing in-schoolount or tohe Budget Controlsubsidies forSC budget

d end in-schoolstudents. Thisr ten years.

E PIPELINE ANDO ENERGY

s have nearlyamas inauguration,that morewill pay $5.00 per

asing unrest in thetes can no longer

isks associated with

e has already beenyears, despite being

d P hi thi


25/43



Refuge (ANWR), Outer Continental

(OCS), Gulf of Mexico, and Rockyrepresent several areas in the Unitehave resources that would help redreliance on the Middle East, lower gcreate jobs, and boost our national sincreasing domestic production.

This budget calls for a policy that grthe Keystone Pipeline and opens feto oil and natural gas production, gtaxpayers at least $4.3 billion in auctproceeds over ten years.

TRANSFER THE TENNESSEE VAAUTHORITYS (TVA) ELECTRICFUNCTIONS. The TVA currentlyfederal corporation operating as onlargest electric utilities in the countrcompetition with private electric prContinued operation of TVAs electfunctions will require substantial cainvestments in the future. The costsold by TVA includes federal subsi

operate as a hidden tax on all citizeencourage over-utilization contraryconservation policies. This budgetTVAs electric utility functions andassets and liabilities to a non-federaoperator. TVA would retain its hydassets and liabilities because they sefunctions, such as flood control and

This would result in a savings of $3.over ten years.

REPEAL THE WESTERN AREA PADMINISTRATION (WAPA) BOAUTHORITY. The $3.25 billion bo

EE


Shelf

ountainsStates thatce our

as prices,curity by

een-lightseral landsneratingion

LLEYUTILITYxists as aof thein

viders.ic utilityitalf electricityies, which

s andtoould sellssociatedowner and

ropowerrve otherrecreation.

1 billion

WERROWINGrowing

without the opportunity fo

concern, the authority incluprovision that would requitaxpayers to pay outstandiprojects that private develoThis budget repeals WAPAauthority, saving $2.9 billio

ELIMINATE THE PRESI

ELECTION CAMPAIGNPresidential Election Campmatching funds to candidatpresidential primaries, funconventions, and funds forcandidates who qualify. Inare allowed to designate $3of their federal income tax tthe fund provides taxpayerpolitical candidates. The prin 1971 to reduce the influecampaigns and to reduce tcandidates to raise money.program argue it has failedThis budget eliminates the

Campaign Fund, saving taxover ten years.

MISCELLANEOUELIMINATE TRADE ADJASSISTANCE PROGRAprograms provide addition

benefits and training assistlose their jobs as a result ofThese programs, which sindisplaced workers for addicompared to other displaceeither created or greatly ex

debate. Of most

des a bailoute Americang balances oners fail to repay.

s borrowingn over ten years.

ENTIAL

UND. Theign Fund provides

es during thes for political

third-partyividual taxpayersor $6 for a couple,

o the fund. In short,subsidies togram was createdce of money in

e time required ofritics of the

to meet these goals.residential Election

payers $371 million

S

STMENTS (TAA). TAAl unemployment

nce to workers whoforeign competition.le out trade-ional benefits

workers, wereanded by the 2009


26/43



loses his job to a foreign competitor

receive the same treatment as the Blemployee who lost his job to Netflixlittle data that shows that TAA propositively impact the earnings of paIn fact, a Government Accountabilitreport concluded that TAA beneficimore likely to earn less in their nextBeginning in FY 2013, this budget w

eliminate TAA programs, saving tabillion over ten years.

SELL FIVE PERCENT OF FEDERAND ASSETS. The federal govern$2.8 trillion in federal land, mineralbuildings and equipment, and inveIn a 1997 report submitted to CongrPresident Bill Clintons DepartmentInterior, the Department identifiedapproximately 3.3 million acres of fas suitable for disposal. Unfortunat14 years later, these lands remain incontrol. Federal land agencies arevaluable resources by managing lan

Democratic administration determicompelling federal need. It is imthe federal government to prudentlassets deserving of federal protectioHowever, it is also important for thgovernment to eliminate surplus ascontrol. This budget calls for the salpercent of the federal assets currentl

the federal government, with total tsavings of at least $140 billion.

DIRECT COMMITTEES TO ELIMWASTE, FRAUD, AND ABUSE. Tbudget requires each congressional

EE


should

ockbuster. There isramsrticipants.

Officeries are

job.ould

payers $7.4

L LANDSent owns

rights,tory.ss byof the

deral landly, nearlyfederalastingds that a

ed held noortant formanage its

n.federalets from itse of fivey held by

n-year

INATEe RSC

committee

savings every single year.

save taxpayers $270 billion

ELIMINATE SPENDINGUNIVERSAL SERVICE Fbudget zeroes out spendinService Fund. This prograto the telecommunicationsinternet services. More rec

has also been used to provion an income-eligibility baswould eliminate spending fsaving $102 billion over ten

his proposal would

over ten years.

OR THEND. The RSCfor the Universalsubsidizes access

etwork andntly, the program

e free cell phonesis. The RSC budgetor this program,years.


27/43



CHAPTER 3

he RSC believes that the numissue facing this nation is jobthat end, the RSC has advanc

comprehensive proposalthe JobsGrowth Actto jumpstart job creati

robust jobs proposal is the exact opPresident Obamas so-called jobs plnothing more than the same failed spolicies of the past. Rather than wasmore of the American taxpayers manother round of stimulus spendinwould jumpstart our economy withspending a dime of taxpayer dollars

The Jobs Through Growth Act has tcomponents: (1) simplifying the taxincreasing energy production, and (government red tape. These policietogether, would do much more to heconomic recovery than Presidentplan to take even more money out o

the pockets of American taxpayers tfailed stimulus projects.

SIMPLIFY THE TAX CIn his 1981 Inaugural Address, Ron

T

EE


|JOBS THROUGH GROer onereation. Tod ahroughn. This

osite ofn, which is

timulusting evenney on, our planout.

reecode, (2)) cutting

s, takenlp spurbamasf

o spend on

DEld Reagan

The Presidents FY 2013 buspend $50.8 trillion and taxyears. The federal governproblem, not a lack of reveAmerican people cannot af

consent to, the kind of tax ibe necessary to pay for theproposed in the Presidents

The RSC will balance the bspending to meet revenue,of continually hiking taxesWashingtons voracious sp

That is why the RSC budgerevenue baseline as the Hobudget, which prevents taxunder current law. The RSrevenue-neutral tax reformThrough Growth Act (H.R.broken tax code, which holgrowth and prevents much

Under this plan, people cancurrent income tax code orto a system with just two radeductions for families, an

THget proposes to

$42.7 trillion over 11ent has a spendingue problem. Theord, and will not

creases that wouldpending increasesbudget.

dget by loweringnsteado satiatending appetite.

uses the samese Republicanincreases scheduledC budget providesbased on the Jobs3400) to fix ours back dynamicneeded job creation.

stay with thescrap it and switchtes, generousno marriage


28/43



Details of the RSCs pro-growth, pr

reform plan are outlined below:

ENACT TAXPAYER CHOICE ACon the RSCs Taxpayer Choice Act o3818 in the 110th Congress), the legigives taxpayers the choice of stayincurrent tax code or switching to a siflatter, and fairer system. The new

system would have:

just two rates15 percent (first $taxable income for single filers,for joint filers) and 25 percent (tincome above these amounts);

a standard deduction of $12,500filers and $25,000 for joint filers;

an additional deduction of $12,5dependent; and

no other individual deductionsexclusions.

By providing dependent deductions(compared to $3,700 in current law),

eliminating the marriage penalty, thcode is more pro-family than currenRegardless of whether a taxpayer onew system, the AMT is eliminatedtax rate on investment income is setpercent for all taxpayers.

CUT THE CORPORATE RATE T

PERCENT AND MOVE TO ATERRITORIAL- BASED SYSTEM.budget calls for reducing Americascorporate tax rate from 35 percent tThis budget directs the House WaysCommittee to identify tax deductio

EE


-family tax

. Modeledf 2007 (H.R.slation

with theple,

ptional tax

50,000100,000xable

for single

00 for each

r credits or

of $12,500and by

is new taxt law.ts into theand the topat 15

25

Thistop25 percent.and Meanss and

ENCOURAGE REPATRIA

encourage businesses to bri$1.2 trillion of capital straninto the U.S. economy, the lthe tax on foreign-earned pU.S. corporations to 5.25 peREPEAL THE DEATH TAfor the elimination of the d

imposes heavy compliancethe survival of small businefarms.

INCREASE ENERPRODUCTIONThe RSC budget recognizes

amounts of attainable eneroff-limits because of interfegovernment. The RSC budunnecessary delays in theContinental Shelf (OCS) peopens up Arctic National(ANWR), the OCS, and watGulf of Mexico for energy e

development.

The budget also green lightPipeline, allowing for instareducing our dependency oin the Middle East. The plaadministrations Wild Lanrestricts hundreds of thousenergy development, repeaEnvironmental Protectiongreenhouse gas regulation,EPA from imposing regulatclimate change.

TION. To

ng the estimateded overseas back

egislation lowersofits repatriated by

rcent for one year.

. This budget callsath tax, which

costs and threatenssses and family

GY

the massive

y resources that areence by the federalet removesulf of Mexico Outermitting process andildlife Refugeers in the Easternxploration and

s the Keystone XLt job creation and

n unstable regimesn repeals theds Policy thatnds of acres froms thegency (EPA)

and prevents theions in the name of


29/43



Given Secretary Chus comments a

administrations lack of a workablecomprehensive energy policy, its nthat gas prices have been increasingpast few years. The administrationthat our nation should be poweredenergy and at every turn has takenblock domestic production of oil, conatural gas.

While renewable sources of energyimportant part of the nations totalrenewable energy by itself cannot pcountry now or even in the near fut120 million barrels of decreased eneproduction in the Gulf of Mexico beand 2012, 830,000 barrels of blockedcapacity through the Keystone XL P11 percent decrease in oil productiolands in 2011, and failures by the OAdministration to approve drillingno wonder that gas prices are skyroEXTEND OCS LEASES. This planone-year extension on OCS leases thdirectly impacted and delayed by thadministrations failure to move foroffshore drilling permitting process.

CUT RED TAPEAmericas entrepreneurial spirit hasdriven the economic growth of our

resulted in unrivaled prosperity. Athe unemployment rate remains higWashington seeks to spur job creatibusinesses throughout the United Sconstrained by the growth of federaregulations

EE


d this

andsurprise

over theelievesn greensteps to

al, and

re annergy mix,wer there. With

rgytween 2009dailyipeline, an

on federalamalans, it isketing.

provides aat weree

ard in the

alwaysation and

d yet, ash andn, smallates are

For small businesses, this a

over $10,000 per employee.regulation is rising. From tthe Obama Administrationregulators have imposed $3costs on the American peopcomparable period on recorBurdensome and onerous g

regulations stand in the waof the American economy.of regulations, in both dollprevents the creation of neexpansion of existing ones.concerning, unnecessary rein the closing of businessesstruggling in the midst of oeconomic times.

The RSC believes that Ameafford a regulatory systembusinesses, and the lifes wat risk. Only by promotingfreedom that allows smalland create jobs without govinterference will our econolife reach new heights.

The RSC budget proposes ssense solutions that will unpotential of job creators anentrepreneurial spirit.

Call a timeout on all necreate significant costs funemployment falls to

Expand small businesscompanies with up to 2

Require congressional a

ounts to a cost of

And the cost ofe beginning of

to mid 2011,8 billion in newle, more than anyd.

overnment

of the resurgenceThe staggering costrs and hours, often

businesses and thePerhaps mostulation can result

that are alreadyr uncertain

ica can no longerhat puts jobs, familyrk of entrepreneursan environment ofusinesses to thriveernmenty and quality of

everal common-eash the vastthe American

regulations thator job creators until.7 percent or less.xemptions to0 employees.

pproval for


30/43



Require federal agencies to giveconsideration to the impact of pregulations on small businessespublishing a regulatory flexibili

Allow small businesses to opt oregulations imposed since the e(coinciding with the start of thebusinesses follow certain publicconsumer notification requirem

EE


greater

oposedbyy analysis.t of federald of 2007ecession) ifandnts.


31/43



CHAPTER 4n February of 2012, the House ofRepresentatives took the first stefixing our broken budget proces

passed three key pieces of legislatiothe budget process. These bills will

increased transparency and accountthe budget process. The first of theslegislationthe Budget and AccounTransparency Actwould bring govsponsored enterprises (GSEs) FanniFreddie Mac on-budget and requireaccounting for federal credit prograsecond billthe Baseline Reform Acundo the requirement that the CBOautomatically increase discretionaryat the rate of inflation in its budgetThe third billthe Pro-Growth BudActwould require that, for major lthe CBO prepare an analysis of thelegislation would have on the broadeconomy.

While these three bills represent proRSC believes that additional reformnecessary to make reducing spendithan increasing it. Our proposal pu

I

EE


|BUDGET PROCESS RE

ps towardandto reform

bring

ability toe pieces ofingernment-Mae and

fair values. The

twould

spendingrojections.etinggislation,ffect thater U.S.

gress, theare

g easiers fair rules

congressional budget procecommitment to a balancedadoption of this budget.

LIMIT USE OF ADVANC

APPROPRIATIONS. Theappropriations is a budgetavoid spending controls anhands of future congressesspending authority to a proyears beyond the year forappropriations act is passewould cap advance appropbillion in FY 2013.

DEFINE EMERGENCY SCongress has clearly abusedesignate spending as emin order to exceed spendinprevious budget resolutionCBO, net supplemental spebillion in the 1980s and $86In contrast, from 2000 to 20appropriations often exceesingle year, and the cumulayears was over $907 billion.

ORMss and to enforce theudget made by the

use of advanceimmick designed totie the budgetary

y appropriatinggram one or morehich an. The RSC budget

riations at $24

ENDING.its ability to

rgency spendinglimits set by. According to theding totaled $99

billion in the 1990s.9, supplementaled $100 billion in ative total over these


32/43



This budget would adopt in the Ho

clear, six-part definition for an emerprovide for a point of order againstconsideration of a bill including espending if a statement from the Cthe House Budget Committee werepreviously printed in the Congressiexplicitly explaining why suchspending meets each of the six crite

policy was included in H.R. 3964 (frCongress), the Spending, Deficit, anControl Act.

CONTINUE EARMARK BAN. UnRepublicans recent adoption of anmoratorium, the number of earmarin appropriations and authorization

soared over the past decade. The rediverted taxpayer resources to satisfinterests, greased the wheels of Wasspending ride, and set a poor examresponsibility. This budget would aHouse rules to make it out of orderHouse to consider any legislation wincludes an earmark. It would alsoRules Committee from reporting a rthat would waive such rule.

IMPLEMENT CUT RESOLUTIONbudget would require the Majoritybring a quarterly rescissions bill befHouse under an open rule. Any res

approved by the House would be ddeficit reduction via a reduction to tallocation for that fiscal year. This ion the Cut Resolution (H.Res. 323 inCongress).

EE


se rules a

gency and

ergencyairman of

notnal Record

ia. This

om the 111thd Debt

til Housearmarks includedbills had

quests ofteny specialhingtonsle of fiscalend the

n theichrevent the

ule or order

. The RSCeader tore the

issions

dicated tohe 302(a)modeledthe last

amendments to an appropr

propose and prevents otherusing those savings to increanother account in the bill.improvement on the previospending cuts protected inAccounts are not applied aAppropriations Committeeallocation, and this allows t

redirected by the Committesubsequent appropriationswould change House rulesfunds cut from an appropriallocated to a Spending Rewould also be cut from theCommittees 302(a) allocaticuts from being spent laterappropriations process.

IMPROVE ENFORCEMERULES. The Budget Actsprovisions currently requirvote to waive, and this alloparty in Congress to ignorewill. This budget adopts atwo-thirds majority to waivauthorized by the Budgetof order to consider a rule orules waiving such points o

REQUIRE ACCOUNTABISPENDING AUTHORIZAthe House has allowed billsmillions of dollars in spendfive-year, and longer periovote. This budget adopts acall vote for any legislationspending authority of the f

ations bill they

Members fromase funding forWhile anus situation,pending Reductionainst thes overall 302(a)ose savings to be

e to spending inbills. This budgetto establish that anyations bill anduction Account

ppropriationsn, protecting then the

T OF BUDGETnforcementonly a majoritys the majority

its provisions atequirement for ae points of orderct and makes it outr suspension of thef order.

LITY FORTIONS. In the past,authorizingng over one-year,s to pass by voicerule requiring a rollthat increases thederal government


33/43



MAKE IT EASIER TO AMEND

APPROPRIATIONS BILLS. Thiswould amend the rules prohibitingamendments on appropriations billfloor so that funding for a programthe underlying text can be conditionmodified by amendment.

ESTABLISH POINT OF ORDER A

UNAUTHORIZED SPENDING. Tbudget would prohibit the Rules Cofrom reporting out a rule that waiveRule against unauthorized spendinappropriations bill. If a program isenough to receive taxpayer funding,be important enough to be reauthorregular basis.

DISCLOSE WELFARE SPENDINPRESIDENTS BUDGET. The RSCPresidents annual budget submissiinclude a figure on proposed aggrewelfare expenditures over the next twell as estimated state and local weexpenditures over this period. This

taxpayers information on how mucgovernment, and all levels of goverspending on means-tested welfare p

CONCLUSIONThere are countless voices in Ameriaround the worldthat have alread

the United States has permanently las the premier world power and theliberty. Sadly, there is plenty of evisupport this claimfrom tax rates togovernment growth to foreign polic

EE


udgetuthorizingon the

ncluded ined or

GAINST

he RSCmmittees the Housein an

mportantit shouldzed on a

INdirects then toate federalen years, asfarewill give

the federalment, arerograms.

aanddecided

st its statusbeacon ofence to

y retreats.

unstoppable. Bold steps to

allow Americans to flouristherefore earn their own suto fully restore the God-givhappiness. Such bold stepsthis budget, a budget that cbalancesand restores therenewal.

advance liberty can

, to create andcess, andn right to pursueare embodied in

uts, caps, andromise of American


34/43



APPENDIX|CSTATEMENT,ADSUMMARY TABLE

CONSTITUTIONALA

he constitutional authority oncollect taxes, pay the debts, aUnited States as enumerated i

Additionally, Article I, Section 9, Clpurse and assigns Congress the roleof the Receipts and Expenditures o

The Congressional Budget Act of 19the budget. The budget resolution sfiscal actions taken by the legislativ

As ordained by the Constitution anentrusted with the adoption of a coThis budget resolution recognizes tgovernment to live within its meansfamilies and future generations to acreate jobs, result in ever-increasing

T

EE


NSTITUTIONAL AUTHITIONAL RESOURCES, A

THORITYSTATEMENTwhich this resolution rests is the power of Cond provide for the common defense and generan Article I, Section 8, Clause 1 of the United Stuse 7 of the Constitution provides Congress wof the guardian of the public treasury by requif all public Moneybe published from time to

74 provides for the annual adoption of a concuerves as the guide created by and for Congressbranch during each congressional session.

required by law, the legislative branch is the sprehensive budget resolution for the federal g

e threats to individual liberty posed by the ina. Failing to address the debt crisis now wouldcrushing tax burden, smother the ability of sminterest rates, and set the nation on course for

RITY

ND

gress to lay andwelfare of the

tes Constitution.th the power of theing that an account

time.

rent resolution onfor all subsequent

ole authorityovernment.

ility of the federaloom American

ll businesses toconomic collapse.


35/43



In accordance with our constitution

preserve the American way of life ffor the consideration of the 112th C

ADDITIONALRESOUDEBT REDUCTION RESOURCESits gross domestic product (GDP),

services produced in our nation in olandmark study by economists Kenbetween debt and GDP growth fropublic debt exceeds 90 percent of G

Despite this stark reality, the Demoand jobs opportunity plan. In fact, iLeader Harry Reid (D-NV) has said

resolution. This law exchanged a $federal spending over ten years. Thdeficits, record debt, and high unem

Since January 2011, the RSC, severalseven different plans to balance ourdemonstrate that Washington doesopportunity by paying down our de

Republican Study Committe

RSC Budget for FY2012: HoU.S. Senator Rand Paul (R-K

A Platform to Revitalize A(March 2012)

Budget of the U.S. GovernmU.S. Senator Pat Toomey (R-

Restoring Balance: A BudgeEncourages Economic Gro

EE


l duty, adherence to the law of the land, and t

r this and future generations, this budget resolngress.

CES

. In January 2012, the United States debt surpahich means our debt is higher than the value o

ne year. A debt level this high destroys jobs.eth S. Rogoff and Carmen M. Reinhart examin44 countries, spanning roughly 200 years. ThP, economic growth (e.g., job creation) decline

rat-led U.S. Senate has failed to produce a credt has not produced a budget in almost three yethe Budget Control Act serves as the Congressi

.1 trillion debt increase over two years for a $2.at is a plan to preserve the status quo of more sployment.

U.S. Senators, and some outside groups havebudget and promote economic opportunity. Tot lack solutions; it simply lacks the will to pr

bt.

eest Solutions (April 2011)

)erica: Budget of the U.S. Government, Fisc

ent, Fiscal Year 2012 (May 2011)

A)t Proposal for Fiscal Year 2012 that Balanceth (May 2011)

e intention to

tion is submitted

sed 100 percent ofall goods and

or example, aed the relationshipy found when grosss.

ible debt reductionrs. Senate Majorityonal budget

1 trillion cut inending, record

roduced at leastese plans

mote job

l Year 2013

the Budget and


36/43



FreedomWorks

The Tea Party Budget: A CoGovernment, and Save Our

U.S. House of Representative

The Path to Prosperity: A BlBUDGET CONTROL ACT PRIME

trillion in new debt to be issued oveyears, 2012-21. The spending cuts asequestration. According to the CBThe law requires the House and Sen

DISCRETIONARY SPENDING CAPS

(Billions of dollars, budget authority)

2012

BCA Discretionary Levels 1,043

Spending above these cap levels is aspending, (2) war funding, and (3)FY 2001, appropriations for these ite$145 billion). The BCA would also i

$110 billion in cuts each year, 2013-defense spending would be reduce

Unlike the discretionary spending cmandatory accounts. However, thesequestration, including Social Secupresidents request), welfare prograrailroad retirement, and GSE prefer

sequestration cuts only up to two pMedicare providers). Prescription-and qualified individual premiums

When considered within the contex

EE


mprehensive Ten-Year Plan to Stop the DeCountry (November 2011)

ueprint for American Renewal(March 201

R. The Budget Control Act (BCA, P.L. 112-25)

r two years in exchange for an equivalent spene structured in the form of caps on discretiona, the BCA would reduce the deficit by $2.1 tril

ate to adhere to the following discretionary sp

2013 2014 2015 2016 2017 2018 2019 202

1,047 1,066 1,086 1,107 1,131 1,156 1,182 1,20

llowed only for specific exceptions, including (rogram spending to eliminate waste, fraud, anms have ranged from $48 billion to $385 billion

plement a sequestration totaling $1.2 trillion

021. Defense spending would be reduced byby $55 billion.

ps, the sequestration cuts are applied to total sBCA fully or partially exempts certain mandatrity, Medicaid, veterans programs, military per

s, federal highway funds, federal retiremented stock agreements. Medicare spending is el

rcent of the programs non-exempt payments (rug coverage for low-income beneficiaries, cat

are fully exempt from sequestration.

of other laws governing sequestration, the $11

t, Shrink the

)llowed for $2.1

ing cut over teny spending andlion over ten years.nding levels:

2021

1,234

) emergencyabuse. Since

(averaging aboutver nine years, or

55 billion and non-

pending, includingry programs from

sonnel (upon thend disability,gible for

primarily toastrophic assistance,

0 billion cut

REPUBLICAN STUDY COMMITTEE


37/43



SEQUESTRATION: ALLOCATION OF THE $


Discretionary

Discretionary

Mandatory Medicare

Other non-exempt

Additional (a)

Sub Total

NOTE: (a) This is the amount of sequestration alimited to no more than 2 percent.


Specifically, the $110 billion in redu

(1) Discretionary Spending in FY 2spending cap, then OMB will reducbillion non-defense) on January 2, 2

(2) Discretionary Spending for FY

further downward by the estimated

(3) Mandatory Spending. The Offito eligible accounts in each year fro

Similar to the spending caps, the labetween years. Unless the law chan

DISCRETIONARY SPENDING FY 2012-2021


2

BCA Discretionary Level 1

BCA Sequestration Cut

EE


110 BILLION ANNUAL CUT

DEFENSE

2013 2014 2015 2016 2017 2018 2019 2020 20

-55 -55 -55 -55 -55 -55 -55 -55 -5

NON-DEFENSE

-43 -38 -37 -37 -36 -36 -35 -33 -3

-6 -11 -12 -13 -13 -14 -15 -16 -1

-4 -3 -4 -3 -3 -3 -3 -4 -3

-2 -2 -2 -2 -2 -2 -2 -2 -2

-55 -55 -55 -55 -55 -55 -55 -55 -5

plied to other programs because the Medicare sequestration is

tions would be implemented in three parts:

13. If Congress appropriates up to the $1,047discretionary accounts by $97 billion ($55 billi13;

014-FY 2021. The discretionary spending caps

cuts outlined in the below table; and

e of Management and Budget (OMB) will applFY 2013 through FY 2021.

does not allow the $110 billion annual spendiges, discretionary spending levels will be as fol

012 2013 2014 2015 2016 2017 2018 2019

,043 1,047 1,066 1,086 1,107 1,131 1,156 1,182

0 97 93 92 91 91 90 89

1

5

3

7

illion discretionaryon defense and $42

will be revised

the required cuts

g cut to be shiftedlows:

020 2021

,208 1,234

88 88



38/43



The intent of the BCA was to excha

$2.1 trillion decrease over the long-tachieved through a Joint Committeeprograms, or both. The law also punecessary $1.2 trillion savings if thefail safe was presumably include

Joint Committee did not achieve ansome other change in law that achiewill not be on a path to reach equiv

EE


ge a $2.1 trillion increase to the debt limit in th

rm. The bulk of this savings was originally plprocess that would have altered laws governis into place a fail-safe optionsequestrationt

Joint Committee process failed to pass the neeto incentivize action by the Joint Committee.savings, sequestration is now the law of the laes at least $110 billion of additional savings ea

lency with respect to the recent $2.1 trillion de

short-term for a

nned to beg taxes, spendingachieve the

ed savings. Thisowever, since the

nd. Without it, orch year, Congresst limit increase.



39/43


CUT, CAP, AND BALANCE: A BUDGET FOR F

RSC's

2013

Revenues 2,734

Discretionary Spending 1,183

Medicaid and CHIP 267

Medicare 503

President's Health Care Law 0

Social Security 813

Other Mandatory 457Net Interest 234

Total Outlays 3,457

DEFICIT/SURPLUS -723

ISCAL YEAR 2013

39

ut, Cap, and Balance Outlays

(Nominal Dollars in Billions)

2014 2015 2016 2017 2018 2019 2020 2

2,980 3,232 3,449 3,642 3,811 3,986 4,184 4,

1,072 1,024 1,012 997 996 1,016 1,034 1,

267 267 267 267 267 267 267

525 547 593 606 625 683 727

0 0 0 0 0 0 0

856 900 948 1,002 1,061 1,125 1,194 1,

393 384 354 351 350 362 374249 287 340 391 435 471 499

3,362 3,409 3,514 3,614 3,734 3,924 4,095 4,

-382 -177 -65 28 77 62 89

Total

21 2022 2013-2022

88 4,601 37,007

53 1,079 10,466

67 267 2,670

74 855 6,438

0 0 0

65 1,340 10,504

90 414 3,82914 528 3,948

63 4,483 37,855

25 118 -848



40/43


CUT, CAP, AND BALANCE: A BUDGET FOR F

RSC's Cut, Ca

2013 20

Non-defense 377 3Defense 554 5Overseas Contingency

Operations 97

Total Budget Authority 1,028 9

Total Outlays 1,183 1,0

ISCAL YEAR 2013

40

, and Balance Discretionary Spendin

(Nominal Dollars in Billions)

4 2015 2016 2017 2018 201

Documents

Rsc Budget Cut Cap and Balance--long Doc--final