It’s not often that Congress does something that’s deserving of praise, but last month the U.S. House of Representatives did just that when it passed the Limit, Save, Grow Act.
The bill, spearheaded by House Speaker Kevin McCarthy (R-CA), attempts to restore fiscal sanity to the federal government by repurposing unused COVID relief funds, slashing government spending and red tape, and establishing new requirements for costly social programs. It also extends the U.S. debt ceiling to March 2024 so that the government does not default on its debt obligations later this summer. Most importantly, the bill benefits American consumers in several ways.
First, the Limit, Save Grow Act will save taxpayers money. The Congressional Budget Office (CBO) estimates that the bill will generate $4.8 trillion in cost savings over the next ten years, with $4.2 trillion coming from policy savings and another $543 billion from interest debt savings.
Most savings would come from cuts to discretionary spending, which is optional government spending implemented through the appropriations process each year. Specifically, the bill sets the discretionary budget at $1.47 trillion, or 2022 levels, and then grows appropriations by just one percent per year through FY 2033. To meet this goal, the bill cuts costly new government programs like the Biden Administration’s Inflation Reduction Act (IRA) green energy subsidies and tax credits, scraps a plan to increase Internal Revenue Service (IRS) funding and prevents the Administration from unilaterally canceling student debt and expanding an Income-Driven Repayment (IDR) plan.
Savings would also come from repurposing $30 billion in unspent COVID relief funds and cutting burdensome regulations that hamper domestic energy production. The CBO estimates that changes to energy regulations and permitting alone could save taxpayers over $3 billion, with another $100 billion coming from the Executive In Need of Scrutiny (REINS) Act, which would subject federal rulemaking to greater oversight.
The Limit, Save, Growth Act would also save taxpayers money by establishing new eligibility requirements for welfare programs like Medicaid and the Supplemental Nutrition Assistance Program (SNAP). Most of these would require slight tweaks to age and work requirements and generate $120 billion in savings.
Together, these measures would save taxpayers a significant amount of money while reducing the growth of the national debt, leading to a second major benefit of the Limit, Save, Grow Act.
The bill attempts to hold the rate of national debt growth to manageable levels, an action that, until recently, lawmakers had shown no interest in taking. Reducing, or even slowing, America’s spiraling national debt problem should be a top priority for lawmakers considered the danger it poses to future economic growth, government operations and taxpayers.
Over the last few years, the nation’s long-term debt burden has ballooned to $31.45 trillion. According to U.S. Treasury data, that number is now greater than America’s entire annual gross domestic product, which as of 2023, stands at roughly $26.5 trillion. Even more terrifying, the CBO predicts that in 30 years, the national debt will soar to 195 percent of GDP. This is equal to an average debt burden per 2022 household of one million dollars.
Excessive amounts of debt can lead to other problems as well. For instance, interest on debt will make up an increasing portion of the state budget. Presently, spending on interest represents about eight percent of total federal outlays. However, by 2033, that share is expected to grow to 14 percent, exceeding the total cost of some social programs like Medicaid and the Children’s Health Insurance Program (CHIP). Over time, these payments could begin to undermine government operations and contribute to other problems like rising interest rates and inflation. The Limit, Save, Grow Act helps draw national attention to these important issues with important implications for taxpayers.
The Limit, Save, Grow Act’s estimated $4.8 trillion in cost savings equals roughly $36,000 in savings per household, savings that could go to other purposes. Less debt also contributes to more economic growth and all the benefits that come along with it, including wages that are not as quickly eroded by inflation. Each of these economic benefits contributes to a better overall standard of living for American taxpayers, who should not be held responsible for the failure of the government to spend responsibly.
While the future of the Limit, Save, Grow Act remains uncertain due to the political reality of a divided government, the bill has nonetheless played a critical role in altering the policy discussion surrounding government spending. That is something worth celebrating.
published in the Medium