(Washington, D.C.) – The Council for Citizens Against Government Waste (CCAGW) today encouraged Rep. Chris Shays (R-Conn.) to vote in favor of the Deficit Reduction Act of 2005, which will trim the growth of mandatory spending by approximately $39 billion over five years.  Rep. Shays voted for the House version of the bill in November and the conference report in December.

“The Deficit Reduction Act is a modest step to control spending,” CCAGW President Tom Schatz said.  “There is nothing compassionate about ignoring reality and leaving a crushing debt burden to future generations.”

Critics call the proposed changes “cuts.”  However, the Deficit Reduction Act merely slows the growth of mandatory spending by less than one-tenth of one percent.  Furthermore, the mostly administrative changes aim to control costs by improving program performance and eliminating waste, fraud, and abuse.  Reforms include preventing Medicaid payments to illegal immigrants and ending the guaranteed minimum 9.5 percent rate of return that lenders can receive on some student loans. 

Spending on mandatory programs is controlled or “mandated” by law and constitutes about 60 percent of the federal budget.  The mandatory budget grows every year with little review, modification, or oversight from Congress.  The shortfalls in Social Security and Medicare – the difference between expected revenue and promised benefits – total $33 trillion over the next 75 years.  The Government Accountability Office estimates that to balance the budget in 2040, the government would have to slash total spending by about 60 percent or raise taxes to 2.5 times today’s level. 

In addition to their unsustainable growth, the waste and abuse in mandatory programs is also well documented.   A 2001 report by the Department of Health and Human Services estimated that Medicare fraud, abuse, and payment errors cost taxpayers $11.9 billion a year.  Not only are the federal government and states being over billed by Medicaid providers, the government is overpaying for prescriptions, with Medicaid reimbursements exceeding pharmacists’ true costs by $1.5 billion.  Earlier this year, a student loan lender in New Mexico took advantage of the minimum rate of return loophole to reap $36 million in excessive education subsidies, according to the Department of Education’s inspector general.

“The longer Congress waits to reform entitlement spending, the more painful the changes will be for taxpayers and beneficiaries down the line.  We ask that Rep. Shays once again vote in favor of the Deficit Reduction Act, stand firm against special interest-sponsored attacks, and do what is in the best interest of the country,” Schatz concluded.

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.