The ‘Tea Party Budget’

The “Tea Party Debt Commission” affiliated with FreedomWorks recently released a budget plan (download here). In formulating its plan, the commission took into account fifteen budget plans introduced by various groups and policymakers, including Cato’s Downsizing Government website.


The effort comes in response to criticism – valid in my opinion – that the amorphous tea party movement hasn’t been sufficiently specific on what should be cut from the federal budget. I think the plan is an adequate response to that criticism. The following are some additional comments on the plan’s contents:

• According to the commission’s calculations, the federal budget would begin running surpluses in fiscal 2015. Average spending over the next ten years would average 17.6 percent of GDP versus almost 24 percent for fiscal 2011. Gross and publicly‐​held debt would start to decrease. Assuming that the projections are accurate, the plan would represent a welcome – and necessary – reduction in the size and scope of the federal government.
• The plan embraces a Balanced Budget Amendment to the Constitution. I’m against a BBA, but their hearts are in the right place – in contrast to a lot of Republican policymakers who champion a BBA because they’re afraid or unwilling to get specific about what they’d cut.
• The plan calls for no tax increases but does not endorse a specific tax reform proposal. I give the commission credit for stating that acceptable tax reform “will never happen in the absence of massive spending cuts.” Kudos to the commission for not going along with the myopic fixation on tax cuts, tax cuts, tax cuts practiced by some individuals and policymakers.
• Specific cuts include eliminating the Department of Energy, Department of Education, HUD, the Small Business Administration, farm subsidies, and corporate welfare programs at the Department of Commerce. The plan also calls for the privatization of Amtrak, air traffic control, and the Transportation Safety Administration. Good stuff. One curious proposed cut is “end all foreign aid to countries that don’t support us.” That’s probably an unfortunate capitulation to tea partiers with neoconservative sympathies.
• On entitlements, the plan calls for allowing workers to divert one‐​half of their payroll taxes (employee share) to private accounts for retirement and medical needs. Medicaid would be block‐​granted to the states and capped. Medicare beneficiaries would be allowed to opt out of Medicare or enroll in the Federal Employees Health Benefit Program. Of course, the plan calls for the repeal of ObamaCare. Overall, I’d say not bad, but not great. It’s frankly depressing that these proposals will probably be labeled “radical” by establishment types.
• I’m unimpressed by the proposed defense cuts: too much talk about eliminating waste and duplication and almost nothing on reining in our global military empire. In fact, the plan expresses worry that the Budget Control Act’s sequestration cuts to defense “could weaken our defenses, perhaps to a dangerously unacceptable level.”

All in all, the plan contains a lot of good recommendations that policymakers should pursue – especially the ones who were elected, in part, by embracing the tea party movement.