Setting Strict Federal Spending Limits Based on Economic Growth and Deficit Control.
This law establishes rigid rules for setting the maximum level of federal spending, excluding debt interest. This limit is tied to GDP growth but is automatically reduced if the government spends more than it collects, aiming to gradually eliminate the deficit. For citizens, this means greater control over public finances and potentially lower national debt, but also less flexibility for funding new programs.
Key points
A permanent federal spending ceiling is introduced, allowing growth only at a rate linked to GDP growth.
If the government spends more than it collects in revenue (excluding debt interest), the allowable spending growth in subsequent years is automatically reduced.
Emergency expenditures (e.g., disasters) must be repaid by lowering the spending ceiling over the following six years.
Both Congress and the President must adhere to this ceiling when planning budgets and new legislation.
Expired
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