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Dear Friend,
As House, Senate and White House negotiators continue working on the details of the legislative package soon to be voted on in Congress on the debt ceiling, the House scheduled a vote for Tuesday on a piece of legislation intended to immediately begin the process of cutting spending, capping the debt, and balancing the federal budget.
Unveiled last Friday, the Cut, Cap and Balance Act of 2011 contains three key provisions:
First, the bill cuts $111 billion in government spending in the 2012 Fiscal Year. This is achieved by cutting non-security discretionary spending by $76 billion, and cutting a further $36 billion from mandatory spending. The bill makes no changes to Medicare and Social Security and also funds Defense spending at the President’s requested level. These savings would bring the federal deficit below $1 trillion next year ($400 billion less than the 2011 deficit).
Second, the bill “caps,” or limits, federal spending to an amount based on the total value of our economy (i.e. gross domestic product, GDP). In 2012 spending would be capped at 22.5 percent of GDP and be reduced each year until 2019, when it reaches 19.9 percent of GDP. (19.9 percent is about the average spending in relation to GDP over the last 30 years.) These statutory caps would reduce federal spending by $5.045 trillion over the next decade compared to current projections by the Congressional Budget Office.
The third provision requires the passage of a Balanced Budget Amendment. Upon passage of the Amendment by both Houses of Congress, the bill provides for the President’s request for a $2.4 trillion increase in the debt limit. The Balanced Budget Amendment would then go before the states. Three-quarters of states would need to ratify the amendment for it to become part of the Constitution.
You can read a copy of the Cut, Cap, and Balance Act here.
With Tuesday’s scheduled vote on the Cut, Cap and Balance Act, please take a moment to click here and let me know your thoughts about the bill and your overall views on the debt ceiling negotiations.
Do you support the Cut, Cap and Balance proposal?
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