House Bill Requires Spending Cuts, Balanced Budget
WASHINGTON (AP) — Highlights of a Republican-written "cut, cap and balance" bill the House plans to consider on Tuesday:
—Cuts next year's projected $3.6 trillion in spending by $111 billion. Roughly two-thirds of cuts from department and agency budgets, one-third from automatically paid benefits, but leaves decisions to Congress about which programs would be cut. Exempts defense, security, veterans, Medicare and Social Security.
—Gradually decreases, or "caps," spending over the coming decade from 24.1 percent of the economy this year to 19.9 percent in 2021. Over the decade, that would mean about $6 trillion less spending than President Barack Obama proposed in his most recent budget. Congress would decide details. If a cap was exceeded, spending would automatically be cut, exempting Social Security, Medicare, military personnel, veterans and interest due on the debt.
—Congress must approve and send to the states for ratification a constitutional amendment requiring a balanced federal budget before the government's debt limit can be increased. After congressional approval of a balanced budget amendment, federal borrowing authority would automatically increase by $2.4 trillion, matching Obama's request. Requires that the balanced budget amendment resemble current House and Senate proposals, which would require two-thirds majorities in Congress to raise taxes or to allow annual spending to exceed 18 percent of the economy — more severe than the 19.9 percent target for 2021 in the cut, cap and balance bill.