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WASHINGTON -- On Tuesday, the Republican-controlled U.S. House of Representatives passed the Cut, Cap, and Balance Act of 2011, in an attempt to address the growing financial concerns with federal spending and the concern over raising the nation's debt ceiling.
The bill passed by a vote of 234-190, with all three members of Utah's congressional delegation voting for the bill's passage, including Democrat Rep. Jim Matheson, who was one of only five Democrats that crossed the aisle to vote for the bill. Matheson said he believed it was important to have a bipartisan approach to curb federal spending.
While this bill is not perfect, I believe it is important for Congress to address our debt crisis with significant proposals.
"When families face tough financial times, they set a budget and enforce discipline to live within it. I have long supported cutting spending and adopting structural reforms to enforce budget discipline in Washington," said Matheson. "Neither party has a good track record in that regard. While this bill is not perfect, I believe it is important for Congress to address our debt crisis with significant proposals."
The bill, introduced by Rep. Jason Chaffetz, who also authored it, reduces non-security spending by approximately $76 billion, caps total federal spending over a 10-year period by gradually lowering the percentage of spending based on the total economy and it requires that Congress pass a Balanced Budget Amendment before the current debt ceiling can be raised.
But with President Obama's administration saying the U.S. will hit the current debt limit by Aug. 2, Congress has little time to consider a Balanced Budget Amendment, unless Congress approves a deal to raise the debt limit for a short period.
"Before an increase to the debt limit can occur, Congress must commit to implement enforceable restrictions that place long-term limits on federal spending. The Cut, Cap, and Balance Act is the right first step toward doing just that," said Congressman Rob Bishop. "It's time that the federal government start spending less and planning sensibly for the future like so many Utah families have done to weather these tough economic times."
Similar legislation was introduced in the Senate, with Sen. Orrin Hatch as a co-sponsor to the bill, but the Democratic-controlled Senate and White House have already said they would reject the House bill.
- Reduce deficit spending by $3.7 trillion over ten years
- Eliminate some tax deductions, reduce marginal income tax rates to raise an additional $1 trillion in revenue
- Require $145 billion in cuts to national defense and homeland security operations, with cuts to other federal programs
- Reduce future Social Security benefits by mandating smaller annual cost-of-living adjustments
Meanwhile, the Gang of Six -- comprised of three Democrats and three Republicans -- unveiled their $3.7 trillion deficit-reduction proposal on Tuesday, which had several members of the Senate and President Obama praising the group's work.
Their plan would immediately force the budget to be cut by $500 million, with an overall goal of reducing deficits by $3.7 trillion over a 10-year period. In addition, marginal income tax rates would be reduced. The plan would create three tax brackets as a way to generate nearly $1 trillion in additional revenue.
Although the Gang of Six's plan has won over support from both parties, Senate leaders have said there isn't enough time to combine the plan with a bill to raise the debt ceiling by Aug. 2, which has several lawmakers worried that a solution may not be arrived at until after the U.S. has defaulted, thus sending the already struggling economy into a deeper mess.