Entitlement Cap Proposal Would Require Cuts of $1.8 Trillion Over the Next Ten Years

Publication Date: March 2004

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Joel Friedman; Richard Kogan; Robert Greenstein

Research Area: Social conditions

Keywords: Federal budget; Fiscal future; Economic projections; Economic inequality

Type: Report

Abstract:

Proposals are now emerging to “cap” expenditures for entitlement programs at levels far below the cost of those programs under current law — and to require automatic across-the-board cuts in entitlements if the caps would be breached. The leading such proposal is an entitlement cap included in legislation recently introduced by four conservative House Republicans (the “Family Budget Protection Act,” introduced by Reps. Jeb Hensarling, Paul Ryan, Chris Chocola, and Christopher Cox).

If enacted, the Family Budget Protection Act would trigger the most severe budget cuts in modern U.S. history, requiring entitlement cuts of $1.8 trillion over the next ten years. If the required cuts were made proportionally across all entitlements other than Social Security (which is outside the caps), the cumulative ten-year cuts would reach almost $800 billion in Medicare and nearly $400 billion in Medicaid. Numerous other entitlement programs, including veterans benefits, military retirement, farm programs, student loans, the school lunch program, the Earned Income Tax Credit, and virtually all basic assistance programs for the poor also would be hit.