Budget

House RSC budget cuts spending by $7.4 trillion, includes chained CPI

by Erik Wasson - 04/08/14 11:05 AM ET

Members of the House Republican Study Committee (RSC) are offering a conservative alternative to Rep. Paul Ryan’s (R-Wis.) budget that balances six years earlier by cutting $2.3 trillion more in spending.

Most RSC members plan to vote yes on both budgets.

The biggest difference comes in domestic discretionary spending. The RSC plan returns to pre-Obama levels immediately, cutting domestic discretionary spending to $429 billion next year compared to $492 billion in the Ryan plan.

In total, the RSC plan crafted by Rep. Rob Woodall (R-Ga.) cuts social discretionary spending by $900 billion below the Ryan plan, which itself cuts these programs by $700 billion below sequestration levels.

{mosads}On Medicare, both plans are broadly similar, except the RSC would affect more individuals closer to retirement. Both plans offer future seniors the option of purchasing future private insurance using government premium support in lieu of traditional Medicare.

The RSC plan starts for seniors in 2019, rather than 2024. Neither plan retains last year’s cap on premium support of gross domestic product plus 0.5 percent, however.

One other notable change is the that the RSC includes a proposal to use a new measure of inflation known as chained consumer price index (CPI) for Social Security and would raise the Social Security eligibility age to 70.

The Ryan plan does not include chained CPI, and President Obama removed it from this year’s plan after coming under pressure from liberals.

Tags Paul Ryan Rob Woodall