Cut, Cap and Balance

The Cut, Cap and Balance Act is a budget plan created by the Republican Study Committee of Congress. The goal of the Act is to responsibly improve the financial situation of the United States by cutting and limiting government spending, as well as passing a Constitutional amendment that requires a balanced budget ever fiscal year. The Act passed the House of Representatives by a vote of 234-190 on July 19, 2011. It is opposed by President Obama who threatened to veto. Most likely the measure will fail to pass the Democrat-controlled Senate because it puts limits on kleptocrats.

Cut

The "cut" portion of the Act requires that discretionary and mandatory spending reductions be made that would cut the deficit in half next year. In the legislative version of the Act passed by the House of Representatives, Medicare and Social Security are exempt from immediate cuts.

Cap

The "cap" portion of the Act requires that federal spending not exceed 19.9% of GDP at any time by 2018. This is in line with the average amount of federal spending for the past thirty years.

Balance

The "balance" portion would require that Congress propose a balanced budget amendment to the US Constitution to be voted on this year. The amendment would:

• require a super majority in either the House of Representatives or Senate for government spending to exceed revenue
• limit the spending to 18% of GDP, unless a super majority votes otherwise
• bar courts from raising taxes to satisfy the previous requirements
• these requirements could be waived during a war

External Links

• Cut Cap and Balance Act Homepage
• Republican Study Committee Homepage