1.1: Spending Cap
CAP DISCRETIONARY SPENDING THROUGH 2020. Other Information:
Hold spending in 2012 equal to or lower than spending in 2011, and return spending to pre-crisis 2008 levels in real terms
in 2013. Limit future spending growth to half the projected inflation rate through 2020. Under the Commission proposal, discretionary
spending would be frozen at 2011 levels* in 2012, and brought down to inflation-adjusted pre-crisis levels in 2013. This path
would require serious belt-tightening to begin in 2012, followed by substantial nominal cuts in 2013. Underlying this path
is an expectation that the government will need to decide what it can no longer afford to do. Over the next 18 months, agencies
will need to undertake a thorough review of their budgets, working with the Office of Management and Budget (OMB) to identify
ineffective and redundant efforts, and distinguishing between core services and programs that have simply continued through
inertia. Congress will also need to critically review all funded programs and make tough decisions to set priorities and reform
or eliminate a number of them. Although this process is especially important in the short-term, before of 2013, it should
be considered an essential part of an ongoing course of action to assess and reassess budget priorities. The Government Accountability
Office (GAO) should be tasked to assist in this effort by identifying redundancies and reviewing performance, where possible.
Beyond 2013, discretionary spending caps will demand continued efficiencies from the government by holding spending growth
to about half the rate of inflation. This approach will help bring spending under control immediately, but do so in a way
that takes into account the fragile recovery in the near term and allows Congress and the President time to carefully evaluate
budget priorities going forward. Moreover, these caps would serve as a ceiling rather than a floor – so members of Congress
would be free to cut spending below the caps in the appropriations process.
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