Don’t Raise the Debt Limit Without Getting Spending Under Control

[formerlurker]

Cut Current Spending, Restrict Future Spending, and Fix the Budget Process

As federal borrowing approaches the current debt limit of $14.294 trillion, the Speaker and the Minority Leader of the House of Representatives and the

Majority and Minority Leaders of the Senate, supported by strong majorities in the House and Senate, must reach agreement to accomplish three things to put the country on a path to financial responsibility: (1) cut current spending, (2) restrict future spending, and (3) fix the budget process.
Relief from the debt limit makes sense only if that relief is an integral part of a plan to drive down spending and borrowing so that the country lives within its means. Although Congress must make substantial cuts in current and future spending, the cuts should come in non-security spending, as the United States needs to fully fund defense of America and its interests around the globe.[19]

Cutting Current Spending

To cut current spending, Congress has a wide array of choices. In October 2010, The Heritage Foundation set forth $343 billion of potential spending cuts, most of which Congress has not yet made.[20] Also, the House of Representatives passed H.R. 1 on February 19, 2011, containing many cuts in spending that have not yet been enacted. Other potential cuts in current spending include the appropriations contained in the Patient Protection and Affordable Care Act (Public Law 111-148, as amended), which the House of Representatives voted to repeal on January 19, 2011.
In making cuts in current spending, Congress should emphasize cuts in continuing programs because, given the budget practices of government that look to existing budgets as baselines for setting future budgets, the current cuts likely will result in related reductions in future spending.

Restricting Future Spending

Congress has many options available to restrict future spending. Congress can impose enforceable caps[21] on the amount of federal spending in various categories, especially including the out-of-control entitlement programs, and pass and send to the states for ratification a carefully crafted amendment to the Constitution that requires the government to balance the budget.[22] The Balanced Budget Amendment, when ratified by three-fourths of the States, will restrain federal spending, but that ratification will take time, and deep spending cuts must begin now and continue each year while the nation awaits ratification.

In designing effective statutory restrictions on future spending, Congress should seek to reduce spending, with a reasonable transition period, to not more than the modern historical level of federal revenues—in short, drive spending down to no more than the historical level of incoming revenue so as to cut deficits over time and stop increasing the debt. [23]

Congress already has a number of useful budget proposals available to serve as a foundation upon which to base further actions necessary to cut future spending. On April 15, 2011, the House of Representatives passed House Concurrent Resolution 34 of the 112th Congress to establish a federal budget for 2012 and budgetary levels through fiscal year 2021.[24] The House Republican Study Committee also proposed a budget, Amendment No. 4 in House Report 112-62, designed to reach a balanced federal budget within 10 years.[25]

While the ideas discussed above would not accomplish all that needs to be done to put America firmly on the path to financial responsibility, they reflect substantial progress toward that objective. Achieving that objective will require substantial reductions across a broad range of federal spending programs, including Social Security, Medicare, and Medicaid.[26]

Fixing the Congressional Budget Process

When Congress established its budget process in 1974, the United States was in debt by about a half-trillion dollars; it is now in debt over $14 trillion. Clearly, then, process is no substitute for action when it comes to congressional self-control on spending. But a good process can help.
Congress should amend existing federal laws that provide permanent or indefinite appropriations for federal agencies or programs (including entitlement programs), or that allow agencies or programs to spend funds they receive from fees or otherwise rather than depositing them in the U.S. Treasury, so as to retrieve congressional control of spending for those agencies and programs.

To make the budget process more visible, understandable, and accountable to the American people, Congress should estimate and publish the projected cost over 75 years of any proposed policy or funding level for each significant federal program.

Congress should require, in addition to the calculation of the costs of proposed congressional actions without regard to the response of the economy to the actions (known as “static” scoring), a parallel calculation that takes account of that response (known as “dynamic” scoring) so as to make more practical and useful cost information available to Congress when it decides whether to pursue the actions.

http://www.heritage.org/Research/Reports/2011/04/Dont-Raise-the-Debt-Limit-Without-Getting-Spending-Under-Control

Good read from Heritage.