Republicans in House Introduce Bill to Tie Federal Spending to GDP

Elisabeth Meinecke
Posted: May 13, 2011 3:35 PM
Several Republican House members have introduced a bill to get federal spending down to 18% of GDP in five years. Should the government not match this cap, the legislation stipulates automatic cuts would occur without any actions being taken by the House or Senate.

According to a summary of the bill from the office of Rep. Jack Kingston, one of the leaders on the legislation, the cuts would come to basically each category of federal spending --  direct spending (entitlements), security-related discretionary (DOD expenditures), and non-security-related discretionary spending. Each category would get cut proportionally to its level of growth over the last year.

The bill also limits emergency spending. Emergency funding is restricted to situations that pose a threat to life, property, or natural security, and that are unforeseen and temporary in nature. An example of what would qualify for emergency spending would likely be the flooding along the Mississippi, whereas foreseeable situations, like further involvement in Afghanistan, would not. 

The GDP figure would be calculated by a five year average as reported by the Department of Commerce. Again, the bill comes with an automatic safeguard against either party not following through on meeting the GDP requirement. It requires the Office of Management and Budget to issue a "warning" by August 20 if projected spending will exceed the set limit.  Again, if the House and Senate don't act after that, that's when the automatic cutting process would kick in.