The new Republican majority in the House has promised to reduce the federal budget by cutting spending and imposing new requirements for any future budgetary legislation. Incoming House Budget Committee Chairman Rep. Paul Ryan (R-WI) provided insights in an address at the e21/ Manhattan Institute on how he plans to exercise his new powers and carry out the financial agenda.
Congressman Ryan today said the cap on the government’s ability to borrow money, known as the debt ceiling will have to be raised, but he said Republicans will want something in return for their support. Ryan also said he hopes to be able to work with President Obama on issues including trade, immigration, tax reform and energy.
Under the GOP-proposed House rules package, Rep. Ryan would dictate spending priorities and place restrictions on the federal budget. In the case that the House and Senate fail to reach an agreement on a budget resolution, the congressman will then ban any revisions to his guidelines.
Originally, House Republicans planned to immediately pull back non-security discretionary spending to 2008 levels, but they had to hold off until the next fiscal year because Congress never passed a full budget for FY2011. Instead, GOP leaders have announced that they will cut five percent from the House operating budget for an estimated savings of $35 million for taxpayers.
Another new proposal aims to replace the Democrats’ existing policy of “pay as you go” with a “cut as you go” rule. The mandate requires legislation that increases in spending would be paid for with a spending cut of an equal or greater amount elsewhere in the budget and prohibits using a tax hike to make up the difference.