Tags: gop | budget | reform | decrease

GOP Sticks With Budget Reform Despite Deficit Decrease

Image: GOP Sticks With Budget Reform Despite Deficit Decrease Rep. Mick Mulvaney, R-S.C.

Wednesday, 08 May 2013 12:39 PM

By David Yonkman, Washington Correspondent

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A small decline in the federal budget deficit is likely to reduce the ability of congressional Republicans to tie an increase in the nation’s borrowing limit to tax reform and spending cuts.

But a sophomore Republican on the House Financial Services Committee tells Newsmax that while the decrease in the deficit is positive news, there is still much room for negotiation.

"People still realize the fact that there’s still $16 trillion in debt out there," Rep. Mick Mulvaney of South Carolina said.

Mulvaney said he stands by a deal struck with House Speaker John Boehner during the Republican retreat in Williamsburg, Va., in January which says that increases in federal borrowing must be tied to budget reform measures.

"I'm still comfortable with the agreement we reached in Williamsburg," he said. "I still think it's a solid plan."

The nonpartisan Congressional Budget Office reported this week that the federal budget deficit is declining this year compared to fiscal 2012. The reduction is likely due to increasing federal revenue as a result of an improving economy, a $600 billion tax increase approved in January, and $85 billion in governmentwide spending cuts known as the sequester, The Washington Post says.

For the first seven months of fiscal year 2013, which started Oct. 1, 2012, the deficit was $489 billion. That is $231 billion less than the budget shortfall for the comparable period last year, according to The Hill.

GOP House members are scheduled to meet May 15 to discuss linking tax reform to an increase in the debt limit.

The pro-tax reform Club for Growth tells Newsmax that congressional Republicans need to stand firm and not allow short-term positive economic news interfere with the bigger picture of addressing a stagnant economy and long-term tax and entitlement issues.

"Let’s not forget that we’re still hundreds and hundreds of billion dollars in the red," said Andy Roth, the Club for Growth's vice president of government affairs. "We can’t afford to just lift the debt ceiling again without making any changes to our balance sheet."

The limited government FreedomWorks had similar advice, and added that defunding President Barack Obama's signature healthcare law — which the conservative House Republican Study Committee is reportedly considering — would be a good place to start.

"Our advice to the House GOP is get back to regular order and pass a bold, aggressive jobs, growth, and less-debt agenda, starting with Obamacare repeal," FreedomWorks Vice President Dean Clancy tells Newsmax.

"Democrats are nervous and vulnerable on healthcare, as the law’s downsides become more apparent every day. The Unaffordable Care Act, as we call it, is already inflating health costs and destroying full-time jobs and will add trillions to deficits over the next decade."

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