Cut, Cap and Balance

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The Cut, Cap and Balance Act is a budget plan created by the Republican Study Committee of Congress. The goal of the Act is to responsibly improve the financial situation of the United States by cutting and limiting federal government spending, as well as passing a Constitutional amendment that requires a balanced budget every fiscal year. The Act passed the House of Representatives by a vote of 234-190 on July 19, 2011 but it was voted down by the Senate (because of the Democrats), and it was opposed by President Obama, who had vowed to veto the bill had it passed. [1].



The "cut" portion of the Act requires that discretionary and mandatory spending reductions be made that would cut the deficit in half next year. In the legislative version of the Act passed by the House of Representatives, Medicare and Social Security are exempt from immediate cuts.


The "cap" portion of the Act requires that federal spending not exceed 19.9% of GDP at any time by 2018. This is in line with the average amount of federal spending for the past thirty years.


The "balance" portion would require that Congress propose a balanced budget amendment to the US Constitution to be voted on this year. The amendment would:

  • require a super majority in either the House of Representatives or Senate for government spending to exceed revenue
  • limit the spending to 18% of GDP, unless a super majority votes otherwise
  • bar courts from raising taxes to satisfy the previous requirements
  • these requirements could be waived during a war[2]

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