This is the Cato Daily Podcast for Thursday, April 7th, 2011.

I'm Caleb Brown.

The fiscal future of the United States hinges on cutting entitlements.

That's the message from Tennessee Senator Bob

Corker. We spoke at a conference on federal spending held today at the Cato

Institute. The CAP Act is a piece of legislation designed to take us from where we are today, spending about

24.5% of our economic output or GDP on a straight line down to 20.6%.

That's setting a benchmark every year stepping us down to that level.

It would call 7.6 trillion dollars in savings over current policy over that 10 year period and

keep us from going well beyond, obviously hugely beyond where we are, debt relative to our GDP, getting us into

levels that are very dangerous for our country's future.

It puts in place a three-year averaging process so you project ahead each year.

So the budget, the budgets are put together with a known number in advance.

The appropriators can work towards that. It has something called sequestration, which is put

in place so that if Congress doesn't act, if it doesn't have the courage to do the things that

will be necessary, and that will take courage, then sequestration takes place

where OMB comes in, based on a formula, not on their judgment, comes in and sequesters

out of every account of government enough money to get down to those levels,

something that no one in Congress would want to see happen.

It has a two-thirds waiver, so if we're in an emergency and we need to wave over that, that's done, but it's pretty tough

and in a body like the House and Senate to get a two-thirds vote.

So it's something that has tremendous teeth.

...