To comply with the law, Congress must reduce appropriations by about $25 billion for the budget year that begins in October. The following year, appropriations can increase by $4 billion. Every year thereafter, spending can grow to keep pace with inflation.
The Congressional Budget Office calculated the financial impact of the plan by comparing it to a situation in which spending kept pace with inflation throughout the 10-year period, and concluded that the government would save about $917 billion—including interest on money it would not need to borrow.
Assuming that the economy continues to grow, the affected government programs will receive an ever-smaller share of the nation’s resources. Moreover, discretionary spending includes the cost of health care for veterans, which, like other health care costs, is climbing much faster than inflation, requiring a larger share of the available money with each passing year.
Proponents describe these constraints as necessary and significant.
“We are actually cutting spending,” said Representative Paul D. Ryan, Republican of Wisconsin. “That’s cultural, that’s significant, that’s a big step in the right direction.”
Critics, however, are skeptical that Congress will follow through. They note that Congress imposed similar limits on spending in the 1980s and ’90s, only to grant itself repeated exceptions. They said that cutting specific programs would be a more credible strategy.
“It does nothing to address the real drivers of our debt,” said Senator Tom Coburn, Republican of Oklahoma, explaining his decision to vote against the bill. “It eliminates no program, consolidates no duplicative programs, cuts no tax earmarks and reforms no entitlement program.”