Yesterday Congressman Kurt Schrader (D-OR) and other members of the Blue Dog Coalition introduced legislation instituting a five-year plan to cut government spending. The plan would reduce non-security discretionary spending by two percent each year over the next three years. It would then freeze spending for years four and five.

H.R. 4871, the Spending Reduction Act, should save $400 billion, significantly more than the $250 billion savings projected by President Obama’s proposed 3-year non-security freeze. This legislation is a part of the 10-Steps to Fiscal Reform Schrader announced in January.

“Oregon families are adjusting to these difficult times by tightening their belts and reducing spending,” said Schrader.  “It’s time for Congress to do the same. This legislation, along with the other 9-steps I announced in January, send a real signal that Congress is serious about controlling our national debt and getting our fiscal house in order.”

During the past decade, discretionary spending has grown by an average of 7.5% with no end in sight. Discretionary spending actually increased from less than $610 billion in 2000 to over $1.2 trillion in 2009. This rise is spending is partly the result of no effective tools to keep Congressional spending in check.

In the 1990s, with bipartisan support, Congress used tough five-year discretionary spending caps to produce balanced budgets and eventually a federal government surplus.   Originally enacted as part of the Budget Enforcement Act of 1990, discretionary spending caps were in place for 12 years. During this period, discretionary spending grew by an average of only 1.6 percent annually. However, discretionary spending caps expired and were not renewed in 2002.

Discretionary spending covers 40% of the federal budget, and reinstating annual caps would complement the recently restored statutory PAYGO law which will help prevent increases in mandatory spending (the other 60%).

This legislation was introduced by members of the fiscally-conservative Blue Dog Coalition which Congressman Schrader is a member. Schrader, and 41 of his Blue Dog colleagues, are original co-sponsors of the legislation. It satisfies step 2 on Congressman Schrader’s steps to fiscal reform. Congress recently passed Step 1 when it enacted PAYGO legislation to force Congress to pay for new spending.

Congressman Schrader’s 10-Steps to Fiscal Reform can be found here: http://schrader.house.gov/uploads/10%20Steps%20to%20Fiscal%20Reform_approved_.pdf