The Cut, Cap and Balance Act of 2011
The Cut, Cap and Balance Act of 2011, according to House Majority Leader Eric Cantor, is "a common sense proposal that will cut and cap federal spending to ensure that Washington begins to live within its means and put in place a Constitutional balanced budget amendment that will make balancing the budget the rule, not the exception."
The Cut, Cap and Balance Act of 2011, which is being brought forth by House Republicans, was authored by Jason Chaffetz (R-UT), Mick Mulvaney (R-SC) and Reid Ribble (R-WI).
There are four major components of this act - let's take a look at all four:
Cut - according to the Act, total spending will be cut by $111 billion in FY2012. The major cuts will come from non-security discretionary spending, which would be reduced below 2008 levels.
Cap - there will be a cap on federal spending relative to GDP. In 2012, federal spending will be 22.5% of GDP, according to the terms set out in the Act. By 2021, according to the Act, federal spending will have been reduced to 19.9% of GDP.
Balance - a Balanced Budget Amendment MUST be passed before the nation's debt limit can be raised
Debt Ceiling - a debt ceiling increase will only be granted "if a qualifying Balanced Budget Amendment passes Congress AND is sent to the states for ratification."
According to the Act, the federal deficit would be brought under $1 trillion next year. In addition, Social Security, Medicare and veterans spending would all remain untouched, while defense spending would be "at the same level as the House-passed FY 2012 budget".
Here is a Youtube video that was released by the Republican Study Committee:
President Obama has already threatened to veto the Cut, Cap and Balance Act. Senior White House officials have reportedly called the Act "extreme, radical and unprecedented."
The House is expected to vote on the Cut, Cap and Balance Act of 2011 shortly.
Source: Republican Study Committee