Republican Study Committee budget would restore fiscal sanity, say Heritage Foundation experts.
A budget is more than just the sum of its revenues and outlays. It’s also a reflection of the values held by its drafters.
Based on the budget proposed Thursday by the Republican Study Committee, the caucus of conservatives in the House of Representatives, its members value America.
Here are 11 ways that the Republican Study Committee’s budget would help save the country:
1) It Cuts Wasteful Federal Spending
By cutting $16.6 trillion of planned expansions of federal spending and balancing the budget in seven years, the Republican Study Committee’s budget presents a blueprint to preserve the financial futures of all Americans. The Study Committee’s budget would, over the next decade, leave the equivalent of roughly $130,000 more per household in the hands of hardworking Americans.
Without these proposed reforms, the Congressional Budget Office expects, in just a decade, the federal government to annually spend nearly a quarter of our economy. That would drive the national debt to 110% of the economy, or the equivalent of $310,000 per household, and would drive annual interest costs to 50% more than what we spend on the military today.
The dollars taken by the government reflect more than figures on a ledger. They represent the hard work of all Americans to provide for each other and to ensure a prosperous future for our families. Without alteration, 1 out of every 4 dollars’ worth of the goods and services produced by Americans each year will be consumed or redirected by the whims of federal bureaucrats by 2032.
This unprecedented burden on our economy would severely limit the right of Americans to live as they want and build for the future.
Fortunately, this path is not set in stone. The Republican Study Committee budget lays out a clear vision of how to return our government to its proper size and scope. The skillful reforms of its budget would appropriately prevent the currently planned expansion of the government.
In this way, the Study Committee illuminates a path toward a federal government that makes good on the promise of our Founders to respect the hard work and natural rights of the American people.
2) It Curbs Government-Induced Inflation
By cutting wasteful spending, balancing the federal budget, and focusing on market-oriented, pro-growth reforms, the Republican Study Committee budget would tame the scourge of rising prices.
The Biden administration has chosen to double down on the drivers of rising consumer prices; namely, federal deficits, runaway money printing by the Fed, and shortage-inducing tax and regulatory impositions.
All federal spending must come from somewhere. The government has three options to get money: taxes, borrowing, and printing money. All three come at the expense of Americans and drive shortages and price increases.
Taxes make it harder to produce real, tangible things by encouraging people to leave the workforce and by starving businesses of the investments needed to expand and maintain operations. The resulting shortages can be seen today through bare store shelves and rising prices.
Printing money, of course, diminishes the value of dollars that already exist in your bank account and the value of the paycheck an employer has already agreed to pay.
Government borrowing takes funds that would have been used to grow the economy and instead dumps them into the money pit that is the federal bureaucracy.
Moreover, government borrowing today necessarily means some combination of more taxes and more money printing in the future. The certainty of the burden and uncertainty of the nature of the burden encourage further price increases today to protect against the scarcity the government will impose later.
The Study Committee’s budget is designed to directly counter these inflationary pitfalls.
It balances the federal budget and cuts the CBO’s expectation of deficits over the next 10 years by 97.6%. The government would no longer use newly printed money or investment crowding out borrowing to cover its spending, completely removing two of the largest drivers of the current inflationary trend.
The Study Committee’s budget would cut and reform the tax code and dramatically pare down the regulatory state. That would allow for rapid economic expansion and an end to shortages and supply chain issues.
Together, the reforms of the budget proposal would work to unburden the economy from government-induced inflation and return our nation to the prosperity that a free society can produce.
3) It Protects Defense From Biden’s Knife
The Republican Study Committee’s budget recognizes the bad choices inherent in the Biden administration’s defense budget request and recommends enough resources to reverse them.
Those reversals included the rejection of Biden’s proposed retirement of 24 ships. It also increases investment in Air Force modernization and addresses the imbalance between procurement and research and development in President Joe Biden’s budget request.
The budget properly describes how the world has become increasingly dangerous in the recent years, from the Russian war of aggression against Ukraine to the accelerating Iranian nuclear program to the increased hostility and investment of the Chinese military.
The current administration’s defense policy is failing to ensure that America is freer, safer, and more prosperous.
The budget also highlights the assessment from The Heritage Foundation’s 2022 Index of U.S. Military Strength that our military is only “marginally able” to meet the demands of America’s national interests. (The Daily Signal is the news outlet of The Heritage Foundation.)
The increase proposed by the Republican Study Committee’s defense budget is all the more critical when the effects of inflation are factored in. Further, it properly balances the need to fund our armed forces while pushing toward achieving more efficiencies at the Defense Department.
It calls for the removal of medical research that’s not related to the military from the defense budget, to stop misguided experiments with alternative fuels in the name of climate change, and divisive training based on critical race theory.
All in all, the Study Committee’s defense budget achieves the right balance when it comes to funding the Defense Department by providing the resources necessary to rebuild the military while creating further accountability to the efforts of the Pentagon.
4) It Addresses Health Care Challenges
The Republican Study Committee’s budget identifies several health care policy issues that contribute to the larger budgetary problems facing the country.
The Study Committee highlights the fact that Obamacare has resulted in higher premiums, fewer choices, and more people locked into government-run health care.
It also highlights the truth that the Medicaid safety net is failing to meet the needs of those who depend on it for their health care. It likewise highlights the limitations and challenges with the employer-based health care system and how Medicare’s fiscal crisis can no longer be ignored.
Importantly, the Study Committee’s budget lays out a plan to address these daunting challenges. It recommends rolling back federal control over health care, removing federal mandates and regulatory barriers to empower states. It recommends modernizing the tax treatment of employer-based coverage and reforms to Medicaid and the Children’s Health Insurance Program that reflect the dynamic makeup of the program.
Of particular note, the Study Committee endorses major reform of the Medicare program, including its transformation into a fully competitive system based on a defined contribution, just like Medicare Advantage and the Federal Employees Health Benefits Program, where patients directly control both the flow of health care dollars and key coverage decisions.
Many of the policies outlined track closely with those laid out by The Heritage Foundation, especially restoring state flexibility; reorganizing the Medicaid program; modernizing Medicare for a new generation of seniors; rethinking employer-based coverage; and removing regulations that impede competition and thwart innovation.
5) It Saves Social Security
Without reform, the Social Security trust fund will be depleted by 2034, leading to 23% across-the-board benefit cuts for many current beneficiaries. Because of the program’s unsound finances, anyone 55 years old or younger today won’t receive a single full benefit.
To save Social Security, the Study Committee’s budget would phase in several commonsense reforms, similar to those proposed by The Heritage Foundation.
Keeping pace with the advances in life expectancy, the eligibility age would slowly increase. The formula for calculating benefits for future retirees would be modernized and flattened, increasing benefit levels for lower-income workers while lowering payments to those who earned more over their lifetimes, returning Social Security to its original purpose as a safeguard against poverty in old age.
6) It Includes Pro-Growth Tax Reform
The Republican Study Committee’s budget puts forward a vision for a pro-growth, pro-worker tax code with an emphasis on keeping taxes low, fair, and simple. Vitally, this budget would prevent tax increases by making the 2017 Tax Cuts and Jobs Act permanent law.
It includes important policies that would reduce disincentives against investment, the lifeblood of economic growth. Full and immediate expensing for capital investments and allowing for neutral cost recovery for investments in new buildings would create new jobs and significantly help economic growth.
Indexing capital gains for inflation would shield investors from the inflation tax, while universal savings accounts would allow families to save for their own priorities without being burdened by additional taxes.
7) It Drains Infrastructure Swamp
Fortunately, the Study Committee’s budget calls for badly needed changes to infrastructure policy. Those include cutting red tape, returning more spending decisions to state and local governments, and eliminating several slush funds that exist only to facilitate local boondoggles.
Those changes would allow important projects to be completed faster and more affordably, while also preventing the gas tax increases that would be necessary to cover the excessive amount that Congress is currently spending.
8) It Reforms Safety Net
The Republican Study Committee budget identifies the myriad safety net programs and rules that have contributed, and continue to contribute, to intergenerational poverty. The Study Committee’s proposed budget reforms have the potential to open up opportunity for all Americans.
The Study Committee rightly emphasizes the effect that the decline of marriage has had on children and our core institutions. The reality is that the marriage penalties in our current safety net work to compound that problem.
Its budget looks to correct those deleterious disincentives and increase the likelihood that more low-income Americans will avoid poverty by following the success sequence: graduate high school, find full-time work, and marry before having children.
Crucially, the Study Committee’s budget clearly conveys why work is irreplaceable in a functioning safety net. Without activation requirements for work-capable recipients to participate in work, education, or training, U.S. safety net programs can never hope to move low-income Americans back into employment, improving their independence and enhancing their well-being.
However, even the limited mandatory work requirements that exist in the Supplemental Nutrition Assistance Program for able-bodied adults without dependents are frequently undermined by serious loopholes.
Even before the COVID-19 pandemic, only 20% of those able-bodied beneficiaries without dependents were required to participate in any work, training, or education. The committee’s budget endorses reforms to those loopholes that would greatly increase the number of beneficiaries able to reenter the workforce.
The budget highlights the overall $1.1 trillion annual cost of our current safety net, recently detailed by Heritage’s Robert Rector: $76,400 per poor family. The solutions the Study Committee highlights—removing marriage penalties in the tax code and assistance programs, and implementing functional work requirements—have the potential to transform the U.S. safety net, opening up real opportunity and improving well-being for millions of Americans.
9) It Promotes Energy Abundance
The energy policy reforms proposed by the budget would give Americans access to the conventional energy sources that drive our economy today and allow for the sorts of innovations that will power the nation’s future.
Critically, it protects America’s conventional-fuels infrastructure, such as the Enbridge Line 5 oil and natural gas pipeline, from leftist political attacks and restores important projects, such as the Keystone XL pipeline spiked by the Biden administration.
It would also bring immediate relief to American motorists by eliminating the Renewable Fuel Standard and opposing Biden’s plan to expand Corporate Average Fuel Economy standards, which will drive car prices even higher.
The budget would also provide the energy industry with the predictability it needs to make major investments for future energy development.
For example, it opens energy resources for safe development in the Arctic National Wildlife Reserve, on federal lands, and on the Outer Continental Shelf.
It also relieves American energy producers of bureaucratic red tape by reforming the permitting process for energy projects on federal lands and protects energy producers from future regulatory overreach by limiting what and how Washington regulates.
For example, it prevents Washington from regulating hydraulic fracturing (aka fracking) on federal lands in states where state-level regulation exists and removes regulatory barriers to the development of advanced nuclear reactors.
The budget would also support national security efforts by eliminating duplicative approval requirements to export liquefied natural gas, which would bring more stability to global energy markets. Similarly, the budget would expand critical mineral mining and production in the U.S. by easing the regulatory and permitting burden on those processes.
Perhaps most importantly for the long-term health of the nation’s economy, the Study Committee’s budget rejects leftist climate ideology.
It prevents climate from being used as the justification for special emergency or public health declarations, and blocks Biden from introducing anything like the woeful Clean Power Plan. Further, it rejects Biden’s reentry into the Paris climate accord and opposes the creation of a carbon tax.
10) It Grows Agricultural Freedom, Flexibility
American farmers should have greater freedom and flexibility to farm their land. The Republican Study Committee budget takes a holistic approach to promoting this freedom for farmers by addressing regulations, taxes, and subsidies.
When it comes to subsidies, the Study Committee’s budget would eliminate two relatively new subsidy programs, the Agriculture Risk Coverage Program, which triggers payments to farmers when expected revenue goes below a threshold level, and the Price Loss Coverage Program, which triggers payments when prices go below a threshold level.
Farmers don’t need to be “protected” from market forces, but this is what these programs do, even as the federal crop insurance program already offers revenue-protection policies. The Study Committee’s budget would maintain the federal crop insurance program, including revenue policies, making some targeted reforms.
To its credit, the Republican Study Committee addresses one of the biggest abrogations of congressional spending power in recent memory; namely, allowing the abuse of the agriculture secretary’s discretionary power under the Commodity Credit Corporation Charter Act.
A power that was rarely used in the past has now led to a massive slush fund for the agriculture secretary, one that the Biden administration is now inappropriately trying to use to address climate change.
The Study Committee’s budget would require congressional approval for actions taken through the Commodity Credit Corp. (While not clarified, that would hopefully be intended to mean express approval for the specific action.)
The Study Committee’s budget also would phase out the infamous federal sugar program, which intentionally drives up sugar prices; eliminate dairy programs; and remove the reauthorization of nutrition programs from the farm bill.
The CBO has identified eliminating Title I programs (e.g., the Agriculture Risk Coverage and Price Loss Coverage programs, and the sugar program) as options to reduce the federal deficit. The Study Committee’s budget righty adopts that important option.
11) It Counters Environmental Extremism
The Republican Study Committee budget goes after environmental extremism and the costly and unnecessary environmental regulatory avalanche hurting the country.
Some of the environmental proposals include rejecting the stringent Obama administration ozone standards set in 2015 and instead going back to the standards that existed before they were imposed and eliminating Environmental Protection Agency climate programs that the Study Committee argues “kill jobs, needlessly increase the cost of energy, and do almost nothing to promote a clean environment.”
The budget also addresses abuses of the Clean Water Act, such as the EPA’s retroactive vetoes of dredge and fill permits, and federal power grabs, such as the Obama administration’s 2015 Waters of the United States (“WOTUS”) rule.
Governance of existing regulation is also enhanced by supporting legislative efforts that would improve the implementation and effectiveness of the Endangered Species Act, including by ensuring that the best available science is used.
Importantly, the budget would eliminate a host of costly activities that provide little, if any, positive environmental impact.
For example, it eliminates the Federal Vehicle and Fuels Standards and Certificate Program, the Integrated Environmental Strategies Program, and EPA grants, climate programs, and regional offices. It also eliminates similar programs in the Department of Energy, such as the Office of Energy Efficiency and Renewable Energy and weatherization grants programs, and reduces funding for the department’s biological and environmental research programs.
All of them waste taxpayer money on duplicative or unnecessary government activities.
In conclusion, Washington’s overspending has driven inflation to rates not seen in 40 years, while inserting politicians and bureaucrats into many of the most personal aspects of people’s lives.
The Republican Study Committee’s budget proposal, “The Blueprint to Save America,” would turn the tide and put our country back on a better path.
Originally published by The Daily Signal. Republished with permission.