Corker-McCaskill Spending Cuts Far Exceed “Ridiculous” House Republican Proposal

February 1, 2011 at 5:33 pm

As we noted earlier, the Center on Budget and Policy Priorities released a report today explaining why a statutory spending limit like the one Senators Corker and McCaskill have proposed would ultimately lead to draconian cuts in crucial programs like Social Security and Medicare and also could have highly damaging effects in future economic downturns.

It is striking that when she unveiled the proposal, Senator McCaskill criticized as “ridiculous” the recent House Republican Study Committee plan to cut nondefense discretionary funding over ten years by about $2.5 trillion.

I fully agree that the RSC proposal — which would slash overall funding for the part of the budget that includes K-12 education, the FBI, cancer research, health care for wounded veterans, and many other programs by 42 percent below today’s level, adjusted just for inflation — makes no sense.  But by the same standard, it is hard to conclude that the McCaskill-Corker proposal, which would mandate about $4.5 trillion in spending reductions over ten years in all programs —discretionary programs plus entitlement programs like Social Security and Medicare — is any more responsible.

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More About James Horney

James Horney

Jim Horney is the Vice President for Federal Fiscal Policy at the Center on Budget and Policy Priorities, where he specializes in federal budget issues.

Full bio | Blog Archive | Research archive at CBPP.org

3 Comments Add Yours ↓

Comments are listed in reverse chronological order.

  1. benintn #
    1

    Can you show your work on the $4.5 trillion claim? I mean, are you not assuming an awful lot regarding GDP growth?

    • FD #
      2

      Prove it

    • CBPP #
      3

      To arrive at our $4.5 trillion figure, we relied on estimates provided by the Congressional Budget Office and phased in the spending reductions according to instructions in the Corker-McCaskill bill. First, we adjusted CBO’s spending forecast to reflect the cost of continuing current policies (see our recent paper for an explanation of our current policy adjustments). Then, we calculated allowable spending under Corker-McCaskill from 2013-2022. We then calculated the difference between what spending would be under current policies and what spending would be under Corker-McCaskill, and calculated how much spending for programs would have to be reduced (taking into account the reductions in interest payments that would occur as the deficit is reduced by cuts in programs). We arrived at a 10-year reduction in program spending of $4.5 trillion. To your second question, we use CBO’s GDP estimates as well. CBO assumes more robust GDP growth after 2011, averaging between 4 and 5 percent nominal growth per year.



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