Seven Things Congress Can Do to Balance the Budget
March 13, 2015
The new 114th Congress has a responsibility to address growing spending and debt. It could adopt a joint budget resolution that reveals to the American people just how Congress intends to put the budget on a path to balance.
Here are seven priorities for Congress's FY 2016 budget resolution:
- Allocate $584 billion to defense spending for FY 2016 in the 050 function to enable the U.S. military to meet the national security requirements. Moreover, the United States should devise a budget based on a national security strategy and military capability requirements.
- Repeal Obamacare in its entirety. This would eliminate the $2 trillion in new spending and $771 billion in increased revenue. In addition, this would alleviate the burdens caused by Obamacare's costly and onerous federal insurance regulations.
- Federal Medicaid spending should be put on a budget. This change could help reduce the perverse incentives created by the open-ended funding model. Along with the fiscal reforms, Congress could allow able-bodied enrollees to use Medicaid dollars to purchase private health coverage of their own choosing.
- Include immediate and long-term structural reforms to Medicare: Ultimately, the program could transfer to a premium support program, which will move Medicare in a fiscally responsible and patient-centered direction, benefiting both taxpayers and seniors.
- Reform Social Security to protect Social Security's most vulnerable beneficiaries in the retirement and disability programs from sudden, indiscriminate cuts without burdening younger generations with tax increases or a higher debt.
- Tax reform could abolish all provisions that confer special benefit to particular industries or activities, insure businesses only pay tax on income they earn domestically and only maintain those deductions that are necessary to prevent taxes from influencing economic decisions.
- Place welfare spending on a more prudent course. Aggregate means-tested welfare spending should be scaled back to pre-recession levels plus 10 percent and capped at the rate of inflation going forward.
Source: Romina Baccia, "7 Priorities for the 2016 Congressional Budget Resolution," Heritage Foundation, March 11, 2015.
Browse more articles on Economic Issues