I 112th CONGRESS 1st Session H. R. 2319 IN THE HOUSE OF REPRESENTATIVES June 23, 2011 Mr. Brady of Texas introduced the following bill; which was referred to the Committee on the Budget, and in addition to the Committees on Rules, Ways and Means, Appropriations, and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To cap noninterest Federal spending as a percentage of full employment GDP, to require that budgets and budget resolutions adhere to these caps, to enforce these caps, to increase financial transparency for mandatory programs, to provide for a line-item adjustment, to require the parings of significant spending increases and adjustments to the debt ceiling, and to provide for a Federal Sunset commission to assist Congress in eliminating Federal agencies and programs that no longer serve a public need or reforming those that are inefficient or ineffective in serving a public need, and for other purposes.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Maximizing America’s Prosperity Act of 2011. (b)

Table of contents

Sec. 1. Short title; table of contents. Sec. 2. Findings. Title I—Statutory cap on total Federal spending Sec. 101. Total spending limits. Sec. 102. Allocation for emergencies. Sec. 103. Reports and orders. Sec. 104. Spending reduction orders. Title II—Fiscally responsible budget Sec. 201. President’s budget submissions to Congress. Sec. 202. Concurrent resolutions on the budget. Title III—Legislative Line Item Reduction Act of 2011 Sec. 301. Short title. Sec. 302. Legislative line item reduction. Title IV—Permanent continuing resolution Sec. 401. Automatic continuing appropriations. Title V—Transparency Sec. 501. Inclusion in annual social security account statement of estimated present value of taxes and benefits for Social Security and Medicare and projected deficit as a percent of lifetime earnings. Title VI—Debt impact Sec. 601. CBO spending and revenue estimates. Title VII—Federal sunset Sec. 701. Short title. Sec. 702. Review and abolishment of Federal agencies. Sec. 703. Establishment of Commission. Sec. 704. Review of efficiency and need for Federal agencies. Sec. 705. Criteria for review. Sec. 706. Oversight by Commission. Sec. 707. Disposition of agency affairs. Sec. 708. Program inventory. Sec. 709. Expedited consideration of schedule for review. Sec. 710. Definitions. Sec. 711. Offset of amounts appropriated. Title VIII—Severability Sec. 801. Severability.

2.

Findings

The Congress finds the following: (1)Excessive Federal spending relative to the size of the U.S. economy as measured by gross domestic product (GDP) has created large, persistent budget deficits and an unsustainable increase in Federal debt. (2)The current level of Federal spending as a percentage of GDP is well above both its post-World War II average and the level found by most economists to maximize economic growth. According to the nonpartisan Congressional Budget Office, if current policies are not changed, Federal spending as a percentage of GDP will explode to 35 percent of GDP by fiscal year 2035. (3)A legislative spending cap is the most effective means of controlling excessive Federal spending. (4)(A)Congress can directly control discretionary and mandatory spending through legislative changes, but Congress cannot directly control interest spending. (B)The Federal Reserve should conduct monetary policy independently from fiscal policy with the goal of maintaining long-term price stability. Thus, using total spending instead of noninterest spending as the basis of the cap may create undue pressure on the Federal Reserve to pursue an overly accommodative monetary policy for too long in order to maintain low interest rates to help Congress keep total spending within its spending cap. If the Federal Reserve were to succumb to this pressure, the United States would suffer from greater price inflation and a declining foreign exchange value of the U.S. dollar. (C)Therefore, the spending cap should be based on noninterest spending. (5)A cap on noninterest spending should be relative to the size of the economy. However, using actual or projected GDP as the denominator would make the spending cap, and thus Federal spending, susceptible to fluctuations in the economic cycle. Hence, using an alternative measurement such as full employment GDP would allow for greater stability in Federal spending through the economic cycle. (6)To adhere to spending caps, Congress needs additional tools to balance the special interest demands for additional spending with the broader public interest for spending restraint.