Balancing the Budget: A Radical Restructuring of Government

As the House of Representatives prepares to vote on a constitutional amendment requiring a balanced Federal budget, concerns are mounting about the feasibility of achieving such a goal. Proponents of the amendment, led by Newt Gingrich, claim that significant spending cuts can be made without raising taxes or touching Social Security. However, a closer examination of the Solomon budget, the only existing program-by-program, line-by-line accounting of how the budget can be balanced, reveals a daunting prospect.

Key Takeaways:

• The Solomon budget proposes cutting Federal spending by $700 billion over five years and over $1 trillion over seven years, with further cuts required to reduce taxes.
• Spending cuts would be drastic, with a 44% reduction in environmental spending, a 72% reduction in agriculture spending, and a 65% reduction in energy spending.
• Medicare and Medicaid spending would be cut by more than $100 billion over five years, with upper-income retirees facing increased costs and poor people restricted to certain doctors and hospitals.
• Spending on income security, which includes welfare and programs for the poor, would be reduced by $150 billion over five years, or about 12%.
• Job training spending would be cut in half, and states would have to pick up part of the cost of food stamps and a larger share of foster-care expenses.
• Dozens of Federal activities would be abolished, including economic aid to Russia, agriculture price supports, and funding for new sewer systems.

Statistics:

• The Solomon budget proposes cutting Federal spending by $700 billion over five years and over $1 trillion over seven years.
• The budget would reduce spending on the environment by 44%, on agriculture by 72%, and on energy by 65%.
• Medicare and Medicaid spending would be cut by more than $100 billion over five years.
• Spending on income security would be reduced by $150 billion over five years, or about 12%.
• Dozens of Federal activities would be abolished, including those listed in the article.

Sources:

• "Solomon budget is a radical restructuring of Government, cutting or eliminating wholesale huge swaths of the Government as we know it" - Martha Phillips, executive director of the Concord Coalition.
• "This is a Draconian approach for poor children and goes far beyond what many Americans think would be reasonable" - Gene Sperling, White House economic adviser.
• The Solomon budget proposal, presented to the House of Representatives in March.
• The Congressional Budget Office's analysis of the Solomon budget proposal.