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McCaskill, Sessions Introduce Amendment to Limit Federal Spending

With Debt Limit Looming, Proposal Would Lock In Discretionary Levels in 2010 Budget - - - Amendment Supported by Bipartisan Group of Budget Watchers - - -

January 25, 2010

WASHINGTON, D.C. - As public scrutiny intensifies on Washington's penchant for spending and borrowing, senators will face a clear choice this week when they consider a measure to legally limit the growth of discretionary spending over the next four years.

The proposal, offered by a bipartisan group of senators including U.S. Sens. Jeff Sessions (R-AL), Claire McCaskill (D-MO), and Jon Kyl (R-AZ), presents a rare opportunity to impose budget discipline on Congress. The proposed spending caps will be considered as an amendment to broader Senate legislation needed to permit the U.S. Treasury to borrow more money.

"The American people have made it clear that they reject the philosophy of ever-increasing federal spending and deficits. They recognize that our soaring national debt holds huge consequences for future generations, and it threatens the economic strength and future prosperity of this country," Sessions said. "Our bipartisan proposal gives senators an opportunity to respond to the public's concerns by restoring the primacy of the budget to the spending process, and legally limiting discretionary spending to the modest increases determined by Congress. Working families all across America make and stick to a budget. Why shouldn't Congress?"

"If there's one thing that the American people can agree on, it's the need to deal with our currently out-of-control deficits, and the need to deal with it now," McCaskill said. "Nearly all Americans have faced challenges due to this economic recession, and most are trying to tighten their belts and find ways to stretch their dollars. It's about time the federal government did the same."

"During these tough economic times, Congress must learn to live within its means in the same way American families are being forced to," Kyl said. "In 2009, Congress spent $705 billion more than the previous year and borrowed $1.4 trillion to cover its out-of-control spending. For the sake of American families and future generations, Congress needs to stop digging the nation deeper into the debt. I am pleased to join a bipartisan group of senators to introduce a measure that will help suppress Washington's voracious appetite for spending."

Under current law, the budget is difficult to enforce and is often ignored. The proposal under consideration this week would impose binding limits on total defense- and nondefense-discretionary spending for fiscal years 2010 - 2014, locking in the modest increases approved in the Fiscal Year 2010 Congressional Budget, which average less than two percent annually. Sixty-seven votes would be required to waive the caps in times of emergency.

Five-year discretionary spending caps were first passed as part of a package of reforms in the Budget Enforcement Act of 1990, but they were allowed to expire in 2002. Those caps held spending growth to one to two percent annually for twelve years, and helped produce four balanced budgets in the 1990s.

Federal law currently prohibits the U.S. Treasury from accumulating more than $12.39 trillion in debt, a staggering sum. The Senate bill to boost the debt ceiling would increase that limit to $14.29 trillion, but current deficit projections indicate that another increase will be needed next year. The debt reflects irresponsible fiscal policy followed after important fiscal restraints like discretionary spending cap rules were allowed to expire in 2002.

As the vote on the amendment nears, a bipartisan group of budget watchdogs has endorsed the plan as a positive step towards budget responsibility. Supporters include the National Taxpayers Union, Committee for a Responsible Federal Budget, Heritage Foundation, and the Concord Coalition. Budget experts Alice Rivlin, Douglas Holtz-Eakin, and Alan Viard are also backing the proposal.

The amendment would impose separate caps on both defense and nondefense discretionary spending. Defense-discretionary spending would be limited to $556,128,000,000 in fiscal year 2010; $564,293,000,000 in 2011; $573,612,000,000 in 2012; $584,421,000,000 in 2013; and $598,249,000,000 in 2014. Nondefense-discretionary spending would be limited to $526,122,000,000 in fiscal year 2010; $529,662,000,000 in 2011; $533,232,000,000 in 2012; $540,834,000,000 in 2013; and $550,509,000,000 in 2014.

The provisions included in the amendment are designed to complement broader efforts to close the long-term budget gap. Discretionary spending currently accounts for about one-third of federal outlays, and many observers believe that Congress will be unable to balance its budget without reining in that form of spending.

Under a procedural agreement reached in the Senate, 60 votes will be required for passage of the amendment.



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