The Cut, Cap, and Balance Act of 2011

CUT

Cuts total spending by $111 billion in FY 2012.  The savings is divided as follows:

• Reduce non-security discretionary spending below 2008 levels, which saves $76 billion.
• $35 billion cut to non-veterans, non-Medicare, non-Social Security mandatory spending.
• Defense budget at President’s level.

CAP

Total federal spending is scaled back based on the glide path for the fiscal years below:

• 2012, 22.5% of GDP.
• 2013, 21.7% of GDP.
• 2014, 20.8% of GDP.
• 2015, 20.2% of GDP.
• 2016, 20.2% of GDP.
• 2017, 20.0% of GDP.
• 2018, 19.7% of GDP.
• 2019, 19.9% of GDP.
• 2020, 19.9% of GDP.
• 2021, 19.9% of GDP.

BALANCE

Requires the passage of a Balanced Budget Amendment before raising the nation’s debt limit.

DEBT CEILING INCREASE CONTINGENT ON BBA

Provides for the President’s request for a debt ceiling increase if a qualifying Balanced Budget Amendment passes Congress and is sent to the states for ratification.

Q&A: The Cut, Cap, and Balance Act of 2011

How much is the first year spending cut in the “cut” portion of the bill?

• The legislation reduces spending by $111 billion in FY 2012.

Why $111 billion?

• This savings total meets the promise to enact immediate spending cuts as part of any debt ceiling bill, and would cause the deficit to finally get back down below $1 trillion next year (a reduction to the previous year’s deficit of more than $400 billion).

 

Does the legislation make any changes to Social Security or Medicare? 

• No. 

Does the legislation make any changes to veterans spending? 

• No.

What does the legislation mean for defense spending?

• It is at the same level as the House-passed FY 2012 budget.

Why cap spending at 19.9% of GDP?

• This would place spending in line with average spending over the last 30 years.

What are the details of the Balanced Budget Amendment?

• The legislation would require that any Balanced Budget Amendment include the following:

1. A balanced budget component;
2. A super-majority requirement to raise taxes; and
3. A limit on spending as a percentage of GDP.

What is the process for the debt ceiling being increased? 

• Provides for the President’s request for a debt ceiling increase if a Balanced Budget Amendment passes Congress and is sent to the states for ratification.

Why $2.4 trillion debt ceiling increase? 

• The President has requested that the debt limit increase by this amount.  This amount is less than the amount of the spending cuts in this bill.  A debt limit increase of this magnitude is a major sacrifice on the part of House Republicans, which is why it is made contingent on measures to ensure that the federal budget is permanently under control.

Related articles

• Scott to colleagues: oppose balanced budget amendment (vivianpaige.com)
• Balanced Budget Amendment: How you can tell it’s just a political stunt. (slate.com)
• Republicans Say No Debt Deal Without Balanced Budget Amendment (businessinsider.com)
• RSC still fighting for a balanced budget amendment (hotair.com)
• Republicans Pressing for a Balanced Budget Fail to Deliver Details on How – Bloomberg (news.google.com)
• Senate follows suit, likely to vote soon on balanced budget amendment (hotair.com)
• GOP leaders split on when to push for balanced-budget amendment (thehill.com)
• Debt Limit: Boehner Says Cut, Cap and Balance ‘Solid Plan for Moving Forward’ (blogs.abcnews.com)
• Barack Obama: ‘The US is running out of time on debt deal’ (telegraph.co.uk)
• The Dangerous Hi-Jinks of the GOP’s Juveniles (businessinsider.com)