August 29, 2012
The Path to Prosperity—Changing Washington's Culture of Spending
- The refusal by some in Washington to adhere to the federal budget process has allowed government to spend recklessly and throw tax dollars at problems on an ad hoc basis as the nation’s fiscal hole grows deeper.
- This budget builds on the reforms advanced by the House Budget Committee to make the budget process more effective, accountable and transparent.
- This budget establishes a binding cap on total spending as a percentage of the economy, making certain the federal government remains limited so the economy can remain free.
- This budget extends the timeframe of the federal budget process to capture long-term unfunded liabilities, making certain that government fully accounts for its promises.
- This budget reforms the Credit Reform Act to incorporate fair-value accounting principles, giving taxpayers a more honest assessment of the true costs of government loan programs.
- This budget requires CBO to provide an assessment of the macroeconomic impact of major legislation, helping to address Washington’s bias towards ever-higher spending.
The Path to Prosperity—Lifting the Crushing Burden of Debt
- This budget cuts government spending from its current elevated level of 24 percent of the economy to 20 percent by 2015.
- Relative to the President’s budget, this budget cuts spending by more than $5 trillion over the next ten years.
- Relative to the President’s budget, this budget shows more than $3 trillion in lower deficits over the next ten years.
- This budget sharply reduces publicly held debt as a share of GDP over its first ten years. By contrast, the President’s budget drives the debt further in the wrong direction and allows the federal government’s fiscal position to “deteriorate” after that.
- The non-partisan CBO estimates that this budget will balance and begin to produce annual surpluses by 2040, and it will start paying down the national debt after that.
- This budget cuts debt by tens of trillions over time relative to the President’s path to a debt-fueled economic crisis and permanent decline.