CONTENTS

CONTENTS

The Republican Study Committee Fiscal Year 2018 Budget: Securing America's Future Economy .. 3 Executive Summary ................................................................................................................................. 19 Fix the Tax Code ..................................................................................................................................... 22 Creating the Environment for Jobs and Economic Growth................................................................. 32 Empowering All Americans to Achieve Economic Opportunity, Upward Mobility and SelfSufficiency................................................................................................................................................ 44 Real Health Care Reform ........................................................................................................................ 70 Saving Medicare ...................................................................................................................................... 78

Make Social Security Solvent Again ............................................................................................ 85 Rescuing Disability Insurance ...................................................................................................... 92 Balancing the Federal Budget ? Other Mandatory ..................................................................... 102 Strengthening National Security ................................................................................................. 121 Smarter Budgeting - Discretionary Spending ............................................................................. 129 Limiting and Reforming Government and Restoring Constitutionalism.................................... 156 Fixing the Broken Budget Process.............................................................................................. 167 Summary Tables ......................................................................................................................... 182

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THE REPUBLICAN STUDY COMMITTEE FISCAL YEAR 2018 BUDGET: SECURING AMERICA'S FUTURE ECONOMY

The Republican Study Committee: The House's Conservative Caucus

The Republican Study Committee (RSC) is the caucus of conservatives in the House of Representatives, dedicated to preserving the values that America was founded upon: a constitutionally limited role for the federal government, a strong national defense, protection of individual and property rights, economic opportunity, and preservation of traditional family values. Founded in 1973 by a small group of Members of Congress, the RSC has grown to include more than 150 members in the 115th Congress. The RSC is led by Chairman Mark Walker, a Representative from North Carolina.

We believe that the appropriate role of a limited government is to protect liberty, opportunity, and security, and that it is the responsibility of each generation to preserve them for the next. We believe that increasing the power of government is the problem, not the solution, for the toughest issues facing our nation. We believe that there is no limit to the ingenuity, innovation, and prosperity Americans can create when allowed to live their lives freely, according to their beliefs. We believe that with conservative commitment today, America's brightest days lie ahead. These principles have guided our nation over the last 241 years and made our country prosperous and a force for good.

Sometimes called the conservative think-tank within Congress, the RSC provides the tools and research that Members of Congress need to craft and advance policies that will benefit the American people. In the words of Dr. Ed Fuelner, the RSC's first Executive Director, "In acting as a catalyst of ideas, the RSC earned its present position of providing the conservatives' intellectual arsenal in the House of Representatives."1 The RSC also provides a forum for like-minded members to join together to support common causes and challenge the status quo. By doing so, the RSC ensures that conservatives have a powerful voice on each issue coming before the House and in setting the agenda for the future. Believing that it is not enough to simply oppose bad policies, the RSC puts forward bold solutions to positively shape the direction of our country.

The Purpose of the RSC Budget

The RSC budget, drafted by the RSC's Budget and Spending Task Force, is offered as a substitute amendment to the budget resolution, which is produced by the House Budget Committee on behalf of the Republican Conference. By offering this alternative and complimentary vision, the RSC budget serves a number of purposes.

1 Dr. Edwin J. Fuelner, Conservatives Stalk the House, 1983, P. 12.

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The RSC budget puts pen to paper to detail the bold solutions that conservatives champion. Government today has grown far beyond its appropriate Constitutional scope and authority. The members of the RSC, understanding our responsibility to preserve and protect the Constitution, have a variety of creative solutions to address the challenges we face without increasing the size of government or the burden it places on the taxpayers. Our purpose is to demonstrate leadership and better ideas, laying the groundwork to restore government to its proper role and allow American families to flourish freely.

The RSC budget aims to go well beyond the least common denominator of politics to reflect the American people's desire to see a more responsible and accountable government. As with any proposal that dares to suggest what ought to be done, rather than just what is easy to do, this budget will inevitably be attacked as too conservative, too bold, too sudden, or too difficult to achieve. However, the measure of success for ideas is not their ease, but their persistence and effectiveness. Over time, ideas first espoused in RSC budgets are incorporated into the House budgets, the president's budget, and into law. In the words of one former Congressman who opposed our solutions, "You'll get attacked in your district for not supporting the RSC budget... In order to blunt some of those attacks, the Budget Committee has moved in the direction of their budget."2 The RSC budget's success is that it pulls the rest of the Republican Conference towards conservative solutions.

The FY 2018 House Budget Committee budget continues to benefit from the framework of the RSC budget. By including meaningful, enforceable, reconciliation targets, as the RSC budget does, the House budget will begin the essential task of implementing these policies in law.

Other instances of RSC-led proposals being adopted by the larger conference include:

? Balancing the federal budget within the ten-year budget window. ? Moving forward with policies to ensure solvency of entitlement programs such as Medicare. ? Establishing realistic dynamic scoring as the official standard to judge tax reform plans. ? Repealing Obamacare through the reconciliation process.

The RSC Budget is intended to chart a course toward solvency, incorporating cutting-edge solutions that may not have widespread support initially, but that we believe need to be included in the policy discussion as they gain acceptance over time.

In this 115th Congress, the RSC's Budget and Spending Task Force is chaired by Representative Tom McClintock of California, a senior member of the House Budget Committee and the House Committee on Natural Resources. The Budget and Spending Task Force has had unprecedented input from the members of the RSC and conservative think tanks and theoreticians. The Task Force included dozens of members who attended weekly meetings to discuss the guiding principles of the budget and the merits of specific policies to include. The Task Force reviewed policies from previous RSC budgets, Congressional

2 Kristina Peterson and Janet Hook, Wall Street Journal, "House Whip Race Reflects Republican Study Committee's Competing Factions", June 17, 2014. .

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policies to include. The Task Force reviewed policies from previous RSC budgets, Congressional budget proposals from past years, the president's budget request, legislation and amendments introduced by Republican members, recommendations from the Congressional Budget Office (CBO), reports from both national and state-based think tanks, and initiatives submitted by dozens of other RSC Members.

This budget is the product of those extensive deliberations and reflect careful considerations of the challenges we face and the policy options available to address them, hence its title: "Securing America's Future Economy".

The Danger of High Spending and Debt

The national debt now stands at nearly $20 trillion, larger than the entire U.S. economy.3 Our debt continues to mount even as federal revenues reach record highs. This leads to a single, undeniable conclusion: The federal government has a spending problem.

Debt as a Percentage of GDP

120!

100!

80!

60!

40!

20!

0!

Federal Reserve Bank of St. Louis and U.S. Office of Management and Budget, Federal Debt: Total Public Debt as Percent of Gross Domestic Product [GFDEGDQ188S], retrieved from FRED, Federal Reserve Bank of St. Louis; , June 1, 2017.

Government spending has grown to consume 20.7 percent of the economy in 2017, well above the historical average of 20.3 percent. To return federal spending back to the average and slow the growth of federal debt, total outlays would be required to shrink by $4.5 trillion over the next decade. Instead, under current law, the federal government will continue to grow to 23.4 percent of

3 U.S. Department of the Treasury, Treasury Direct, "The Daily History of the Debt Results, Historical returns from 05/19/2017 through 05/19/2017". . And U.S. Department of Commerce, Bureau of Economic Analysis, "National Income and Product Accounts Gross Domestic Product: First Quarter 2017 (Advance Estimate)", April 28, 2017. .

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1966! 1967! 1969! 1971! 1973! 1975! 1977! 1978! 1980! 1982! 1984! 1986! 1988! 1989! 1991! 1993! 1995! 1997! 1999! 2000! 2002! 2004! 2006! 2008! 2010! 2011! 2013! 2015!

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