Thursday, May 20, 2010

SAFE Act Would Cap Growth of Government

PAYGO, a bill to restrict the growth of government spending was originally enacted in 1990, but was allowed to expire in 2002 when the US had a budget surplus. After deficits arose again, the House brought the PAYGO back. Since then it has been watered down to exempt emergency items. Everything now is an emergency and there are no controls on spending. The SAFE Act is an attempt to put some sanity back into the process. My personal belief is that nothing short of a balanced budget Constitutional Amendment will control these Congressional "thieves".

Over the past decade, federal spending has leaped 62 percent faster than inflation, to more than $30,000 per household. Not content with this expansion of government, President Obama’s budget would push inflation-adjusted spending to nearly $37,000 per household by the end of this decade. This would create sustained trillion-dollar budget deficits, likely followed by European-sized tax hikes.

Rep. Lamar Smith (R-TX) has proposed a commonsense approach to avoid such ruinous spending hikes. The Saving America’s Future Economy (SAFE) Act of 2010 would limit the annual growth of government to the inflation rate plus population growth rate (typically around 3.5 percent annually). (Note that this SAFE Act is different from the deficit commission bill with the same name).

The SAFE Act would create a framework for spending control. Such a framework is quite necessary given this Congress’ historic refusal to even pass – much less hold to – a budget. The Democratic majority claims that Pay-As-You-Go (PAYGO) rules put a brake on government, yet PAYGO exempts discretionary spending (40 percent of the budget), as well as the 6 percent annual baseline growth of entitlement spending. And in the rare instances when PAYGO has applied, its been bypassed repeatedly for new spending. Not surprisingly, the deficit has skyrocketed since PAYGO’s implementation.

Lawmakers must rein in spending in order to prevent a debt crisis like the one spreading through Europe. This requires a budget process compatible with our budget priorities. The SAFE Act provides a strong first step by capping the growth of government, and creating a framework for priority-setting and trade-offs.
Read The Foundry article here.

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