Plans targeting federal spending are coming fast and furious on Capitol Hill, but lawmakers are treading lightly around the big three of entitlement programs — Social Security, Medicare and Medicaid.
Republicans have offered a balanced-budget amendment and bills to gut federal departments and slice hundreds of billions — perhaps trillions — of dollars in new spending. Democrats have vowed to be fiscal stewards of taxpayers’ money. President Obama has pledged to freeze domestic spending for the next five years while loosely embracing some of the long-term cost-saving recommendations made last year by his high-profile deficit-reduction commission.
But these early plans and rhetoric focus largely on immediate cuts to non-defense discretionary spending rather than structural budget reforms that many say are needed to get the federal fiscal house in order.
“Most of the proposals seem to be geared at the non-defense discretionary spending, and I would rate that the least troublesome of our fiscal issues,” said Robert L. Bixby, executive director of the Concord Coalition.
Each year, Congress authorizes discretionary spending, which in 2010 totaled $1.35 trillion ($689 billion of which went to defense). Meanwhile, entitlement spending is mandated by law and is the fastest-growing part of the budget. In 2010, it amounted to more than $2 trillion in federal spending.
Mr. Bixby and other budget hawks now say that while the proposals floated in the new Congress likely will lead to less federal spending, they won’t do much to deal a serious blow to long-term deficits and the growing national debt, which are rising in large part because of the aging population and Social Security, Medicare and Medicaid costs.
“Spending is being driven by health care and retirement,” Mr. Bixby said. “So there is sort of an inevitability about it, but that is a fundamental issue that neither side wants to address. You look at the proposals out there and you listen to the State of the Union address and these folks just aren’t even in the ballpark.”
But there are signs that that could change.
On Tuesday, a bipartisan group of lawmakers plans to roll out the Commitment to American Prosperity Act that would “force Congress to dramatically cut spending over 10 years” by linking the total amount of money the government can spend — discretionary and mandatory — in any year to a fixed percentage of gross domestic product. The goal is to bring down spending from the current level of 24.7 percent of GDP to 20.6 percent.
Meanwhile, Sens. Mark Warner, Virginia Democrat, and Saxby Chambliss, Georgia Republican, are working on a bill that incorporates some of the more controversial recommendations from the president’s fiscal commission, including changes to Social Security, Medicare and the nation’s tax code.
On Monday, Mr. Warner said Congress must cut federal spending, “including entitlement programs,” enact comprehensive tax reform and “grow the economy by adopting an innovation and growth agenda.”
“It will require all three of those elements because no single one of them alone will get the job done,” Mr. Warner said.
Still, most of the cost-cutting proposals have come from Republicans.
Since taking control of the House last month, GOP leaders have passed a bill to repeal Mr. Obama’s health care overhaul and laid the groundwork for fulfilling their campaign promise of reducing non-defense discretionary spending to 2008 levels.
Last week, the Republican Study Committee, a coalition of House GOP conservatives, proposed even more dramatic cuts with a bill that would reduce spending by $2.5 trillion over the next 10 years. The plan would reduce non-defense discretionary spending for the rest of 2011 to levels set in 2008, and then to 2006 spending levels for 10 years after that.
In the Senate, Sen. Mike Lee, Utah Republican, has pushed for a balanced-budget amendment, and Sen. Rand Paul, Kentucky Republican, has introduced a bill that would cut $500 billion in government spending in one year alone, essentially by eliminating the Department of Education and Department of Energy and cutting proposed military spending by 6.5 percent.
“What I’m trying to tell the conservative members that are worried about [the proposed military spending cut] is we have increased the military by 120 percent over a 10-year period,” Mr. Paul said. “The only way you will ever get a compromise … is you have to cut everywhere, not just domestic spending.”