Cut spending to grow the economy

When I became vice chairman of the Joint Economic Committee, I asked my staff to study what our foreign competitors, who found themselves in fiscal trouble, did to right their situation. The findings were unambiguous: Successful countries cut government spending as a share of their economies.  The countries which failed to improve their financial fortunes tried a mixture of tax increases and spending cuts. Moreover, successful countries had a strong and immediate rebound in economic growth.
 

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A second study examined which tools were effective in controlling spending.  This study provides two lessons, one from our states, and one from our foreign competitors. From our competitors: federal spending must be capped relative to size of the economy. From our states: states with an item-reduction veto and sunset provisions for state agencies had less spending than other states.

Applying these lessons, I introduced H.R. 2319, the Maximizing America’s Prosperity (MAP) Act to cap non-interest spending on all federal agencies and programs, and then reduce spending as a share of our economy over the next decade. A family cannot control credit card interest payments on previous debts, but a family can reduce future purchases. Similarly, Congress cannot control interest payments, but Congress can control and must be held accountable for spending on discretionary and entitlement programs. MAP Act will cut spending and reduce federal programs with a level of certainty never seen before.

MAP constructs durable guardrails that will keep Washington on the path to a smaller government that fosters business investment and job creation.  For the first time, MAP transforms the President’s Budget from a political wish list into a real management tool that prioritizes all non-interest spending into 5 categories from most to least essential, and proposes plans to make both Social Security and Medicare sustainable for future generations.

MAP sunsets obsolete agencies and programs, would create the constitutional equivalent of an item-reduction veto, and end forever the threat of government shutdowns by allowing government operations to continue after a 10 percent cut when new spending bills are not enacted on time. This provision alone will prevent the political brinksmanship that we have seen as of late.

Jim Miller observed of the MAP Act, “As Director of the Office of Management and Budget for President Ronald Reagan, I applaud Rep. Brady for introducing the MAP Act. MAP’s smart spending caps and innovative guardrails would keep Congress on the path of reducing federal spending as a percent of GDP back down to its level during the late 1990s.”

MAP’s cap and guardrails will reduce federal spending and create an environment conducive to job growth. In a time where Americans and our small businesses are hurting, it is our duty to do all that we can to put Americans back to work and restore confidence in our economy.

Rep. Kevin Brady (R-Texas) is a senior member of the House Ways and Means Committee and vice chairman of the Joint Economic Committee.