House conservatives want to cut the budget deficit in half next year and reduce spending by as much as $381 billion.
Leaders in the Republican Study Committee are circulating a letter to their 176 House members seeking support for a concrete set of demands that must be met in return for raising the nation’s debt ceiling.
The three demands include cutting the deficit in half, placing a ceiling on spending equal to 18 percent of gross domestic product and approval of a balanced budget amendment to the Constitution.
“Further, given the condition of the country’s finances, it is imperative to the future of the country that we fight for an immediate shift toward fiscal responsibility.”
RSC spokesman Brian Straessle explained that the RSC wants this year's $1.4 trillion estimated deficit to be cut in half next year. The CBO projects that the deficit will naturally shrink to $1.08 trillion due to higher revenue. To get the deficit down to $700 billion will require $381 billion in cuts, he explained.
The White House is seeking a $2 trillion increase in the nation’s $14.3 trillion debt ceiling by Aug. 2.
The letter, to be sent to Speaker John Boehner (R-Ohio), spells out three demands.
The first states, “We must implement discretionary and mandatory spending reductions that would cut the deficit in half next year.”
The second demand is a “statutory, enforceable total-spending caps to reduce federal spending to 18 percent of Gross Domestic Product (GDP).”
Spending is now at 24 percent of GDP. The White House favors a debt trigger that would force either tax increases or spending cuts if breached.
The third demand is for a balanced budget amendment to the Constitution that would also include strong protections against federal tax increases, as well as “a Spending Limitation Amendment (SLA).”
This type of amendment would make the cap on spending as a portion of GDP a part of the Constitution and would require large hurdles to be met to increase taxes.
The RSC will push for the debt ceiling to be raised as little as possible so that the administration will face more pressure to reduce the deficit.
The Republican Study Committee is reprising a role established during talks this spring over 2011 spending by pushing leadership to escalate demands.
In the context of the 2011 budget talks, the RSC and freshmen got leadership to increase demands from $35 billion in cuts to $61 billion. The RSC failed to get a full $100 billion in cuts, however. Instead, Congress and the White House agreed to $38.5 billion in cuts, something conservatives said was only made possible through their extra negotiating demands.
Editor's note: An earlier version of this story incorrectly reported the amount of spending cuts necessary to reduce next year's deficit by half under the RSC's calculations. This story was updated with additional information at 3:52 p.m.