In the past two e-newsletters we have discussed the House passed Path to Prosperity Budget. In last week's edition, we discussed tax reform provisions and in the previous week's edition we discussed the provisions to preserve and protect Medicare for current seniors and for future generations. This week, I will discuss how the budget works to stop the sequester and out of control government spending.
In January 2013, America will be subject to approximately $50 billion in cuts to defense funding. Defense manufacturers and suppliers are beginning to make plans to compensate for these looming cuts. These cuts will result in layoffs and closures. Some economists have estimated that between 1.5 million to 2.1 million Americans will lose their jobs as a result of the sequester. The Path to Prosperity Budget ensures that our military men and women do not pay the price for Washington's failure. This budget reprioritizes sequester savings to focus on the problem, which is government spending, and to protect national security from deep and indiscriminate cuts. It achieves these goals by giving six House committees reconciliation instructions to produce legislation that achieves the savings called for under the Budget Control Act without haphazard cuts that the administration could make.
The refusal by some in Washington to adhere to the federal budget process has allowed government to spend recklessly and throw tax dollars at problems on an ad hoc basis as the nation's fiscal hole grows deeper. The Path to Prosperity Budget cuts government spending from its current elevated level of 24% of the economy to 20% by 2015. Relative to the president's proposed budget, the Path to Prosperity Budget cuts spending by more than $5 trillion and shows more than $3 trillion in lower deficits over the next ten years. This budget sharply reduces publicly held debt as a share of GDP over its first ten years. By contrast, the president's budget drives the debt further in the wrong direction and allows the federal government's fiscal position to deteriorate after that. This budget establishes a binding cap on total spending as a percentage of the economy, making certain the federal government remains limited so the economy can remain free.
Congress has a responsibility to our nation and future generations to modernize and reform federal government spending before the oncoming federal debt crisis cripples the future of our families and the American economy. The Path to Prosperity Budget sets forth a blueprint to reduce debt as a share of the economy and to ultimately pay off our Federal debt over time. The budget emphasizes the need to provide for our future by restoring America's promise, prosperity, and security.