ON-Lion Letter
The size and scope of the federal government has grown steadily in the last half-century, with the expansion of spending and new federal programs.  Today's federal budget is far different than it was five decades ago.  The proportion of mandatory spending to discretionary spending has essentially flipped.  In 1965, mandatory spending represented 26% of the federal budget; 50 years later, it accounted for 62%.  With demographic changes underway and the continued rapid growth in health-care costs, entitlement programs will continue to exacerbate fiscal pressures and create new ones, including the risk of a debt crisis.

The threat of such a crisis is more serious today than it was even in 2008.  The national debt skyrocketed by $7.1 trillion between 2009 and 2015.  The average level of federal debt from 1950 to 2008 was 405 of GDP; by 2015, that level had reached 74%.

The long-term outlook is not promising. Failure to make rational, gradual reforms today will lead to a crisis -- necessitating drastic, severe changes to the budget, namely punishing tax increases or draconian austerity.
 
A conservative framework for the federal budget is necessary.  James C. Capretta argues in the newest policy-briefing book in the Room to Grow Series from the Conservative Reform Network and the Conservative Reform Policy Center (CRPC) that a conservative approach must include four key reforms. 

First, defense funding must be restored to a level commensurate with U.S. global leadership.  Second, non-defense discretionary spending must be stabilized at 2.8% of GDP, a realistic approach that suggests reform and elimination of some unnecessary programs.  Third, Social Security and health-care programs should be reformed in ways to promote economic security for middle-class households.  Finally, tax policy should be designed to raise, in the least burdensome and intrusive way, the revenue necessary for the resulting federal budget.

Capretta is a senior fellow at the Ethics and Public Policy Center (EPPC).  The Lynde and Harry Bradley Foundation in Milwaukee substantially supports both CRPC and Capretta's work at EPPC.

The key to conservative reforms to the federal budget, according to Capretta, is a long-term approach -- not chasing short-term goals, focusing exclusively on budget numbers, or working around the margins of non-defense discretionary spending.

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