New bill introduced to radically cut federal spending across all programs, including entitlements

Senators Bob Corker (R-TN) and Claire McCaskill (D-MO) introduced S. 245, The Commitment to American Prosperity (CAP) Act, which would cap all federal spending at a set level. This would include all entitlement spending (Social Security, Medicare, Medicaid and others) and all discretionary spending (education, housing, employment and others).  The cap would be tied to a percentage of the Gross Domestic Product (GDP).  GDP is the total market value of all goods and services produced by our economy.  If the spending cap is exceeded, the Office of Management and Budget (OMB) would be authorized to make automatic spending cuts across all federal programs.  A two-thirds vote in Congress would be needed to overturn any cuts.  The amount of the cuts would be in proportion to how fast each program is growing. Unlike previous laws to control spending (Gramm Rudman Hollings, Pay As You Go) there are no protections for low income entitlement programs such as Supplemental Security Income and Medicaid.  As a result, the impact of exceeding the cap would mean that the biggest cuts would come from Social Security, Medicare and Medicaid.  These programs make up a significant proportion of federal spending and are growing faster than many other programs due to the aging of the population and rising per-person health care costs.

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