This year’s Republican Study Committee’s budget alternative is about freedom and opportunity. It is about allowing American families to keep more of their own money and spend it on their own priorities rather than Washington’s, a reality that can only be accomplished through less government, lower taxes, less federal spending, and economic prosperity. This budget therefore is about renewal and change.

In 1994, Republicans across the country embraced a legislative platform of freedom and opportunity, of getting spending under control, reducing the tax burden, and shrinking the size of the federal government. The principles of this “revolutionary” path were laid down in the Contract With America, a “detailed agenda for national renewal” designed to “restore the bonds of trust between the people and their elected representatives.” The nation responded to the Contract’s vision by transforming the political landscape in the House of Representatives and Washington.

In 1995, the new Majority in the House acted boldly and with initial success to enact the reform agenda it promised in the Contract. In particular, the first House Republican budget resolution that year (H.Con.Res. 67) sought to rein in the size and growth of government as the Contract called for, with all but one member of the new majority voting in favor. The Contract budget sought to balance the budget, strengthen national security, and cut taxes while providing over $1 trillion in deficit reduction. The budget poignantly stated:

America stands at a crossroads. Down one path lies more and more debt and the continued degradation of the Federal Government and the people it is intended to serve. Down the other lies the restoration of the American dream…we choose the second of these roads. We do it because it’s right. We do it because it’s sensible. We do it because America’s future does not belong to the Congress, or the administration, or any political party. It belongs to the American people themselves.

Unfortunately, we are once again at a historic crossroads in the nation’s future. Despite initial successes, Republicans today are confronted with familiar challenges: expanding government, a worsening fiscal position, and an explosive growth in spending and earmarks. In fiscal year 2005, the federal government spent $2.47 trillion—49% more than it spent in fiscal year 1995 after adjusting for inflation. The deficit for the current fiscal year is projected to be upwards of $400 billion, the largest nominally in history. In 1995, the public debt limit stood at $4.9 trillion; it now stands at $8.2 trillion, up 67% and yet again in need of an increase. This is not the result of war and economic challenges, as is often claimed, but rather an unwillingness to make choices and trade offs.

In particular, nonpartisans such as the Congressional Budget Office and the Government Accountability Office have been warning Congress that the growth in direct spending (i.e., spending that is on auto-pilot and outside the annual spending process) is occurring at an unsustainable rate due to well-known demographic trends and other factors. By 2040, Social Security, Medicare, and Medicaid alone will consume the entirety of today’s budget, as these programs fund the retirement and increased healthcare costs of the baby boom generation. If we do nothing to address the structural flaws, many intentionally embedded by big spenders of the past, future lawmakers will have to either raise taxes to obscene levels, destroying any chance our children and grandchildren will have of a life of prosperity and opportunity, or deny funding to literally every other federal program regardless of its priority—defense, border security, veterans, and so forth. All will go without, if our fiscal situation is not addressed now.

This is not the legacy the Members of the Republican Study Committee wish to leave, a massive government and a crushing burden on future generations. In crafting this year’s budget, we have sought to update the budget passed by the first House Republican majority in a generation. Obviously, the replica is not exact; many things have changed in the past decade and much good has been done. However, with regard to the work that remains, we have tried to adhere closely to the policy assumptions of that first budget and renew our commitment to balancing the budget without raising taxes. We too believe that America is at a crossroads, and we too choose the path that leads to the restoration of the American dream. We propose for your consideration the “RSC Budget: The Contract with America Renewed.”

Mike Pence (R-IN)
Chairman, Republican Study Committee

Jeb Hensarling (R-TX)
Chairman, RSC Budget & Spending Taskforce