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InsiderOnline Blog: November 2012

Yes, There Are Ways to Cut Spending (and Avoid Tax Increases)

The Republican Study Committee’s proposed budget, writes Diana Furchtgott-Roth, is just one of many sources of ideas:

The proposed [Republican Study Committee] budget sets discretionary spending at $931 billion in fiscal year 2013, slightly less than the amount in the fiscal 2008 budget, $933 billion.

To get there, the RSC budget eliminates funding for several programs whose functions do not have to be provided by government. Gone would be the Corporation for Public Broadcasting — everyone knows we have enough cable, broadcast, and internet offerings without the government providing more — for a savings of $4 billion over 10 years. Gone would be the National Endowment for the Arts ($2 billion saved), because arts can be funded by the private sector and state and local governments. Under the hatchet would be the Economic Development Administration and the Legal Services Corporation ($4 billion saved), whose functions could be provided by the states. The National Labor Relations Board would be merged into the Department of Justice.

The RSC budget contains lists of agriculture subsidies that are ripe for elimination, adding up to $55 billion over 10 years. It proposes privatizing Fannie Mae and Freddie Mac (savings: $43 billion), and ends the concept of too big to fail (savings: $32 billion). It suggests that federal employees’ pension contributions be raised to levels comparable with the private sector. It suggests ending the Presidential Election Campaign Fund (savings: $371 million).

Most important, the Committee tackles entitlement programs. Costs of Social Security and Medicare increase with people’s life expectancies and changes have to be made to keep the programs solvent. For those 55 and younger, the RSC proposes to gradually raise the Social Security retirement age to 70 years and the Medicare eligibility age to 67.

Both the House budget and the RSC suggests transforming Medicare beginning in 2023 into a premium support program, with competing plans, like the Federal Employees Health Benefits Program. Seniors would choose from government-approved insurance programs and richer seniors would pay more for coverage. [MarketWatch, November 29]

Posted on 11/30/12 02:29 PM by Alex Adrianson

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