Cut, Cap and Balance or Cut, Cap and Kill

Cut Cap and Balance

Summary of Republican Proposal -- from Christian Science Monitor/Associated Press

    —  Cuts next year's projected $3.6 trillion in spending by $111 billion. Roughly two-thirds of cuts from department and agency budgets, one-third from automatically paid benefits, but leaves decisions to Congress about which programs would be cut. Exempts defense, security, veterans, Medicare and Social Security.

    —   Gradually decreases, or "caps," spending over the coming decade from 24.1 percent of the economy this year to 19.9 percent in 2021. Over the decade, that would mean about $6 trillion less spending than President Barack Obama proposed in his most recent budget. Congress would decide details. If a cap was exceeded, spending would automatically be cut, exempting Social Security, Medicare, military personnel, veterans and interest due on the debt.

—   Congress must approve and send to the states for ratification a constitutional amendment requiring a balanced federal budget before the government's debt limit can be increased. After congressional approval of a balanced budget amendment, federal borrowing authority would automatically increase by $2.4 trillion, matching Obama's request. Requires that the balanced budget amendment resemble current House and Senate proposals, which would require two-thirds majorities in Congress to raise taxes or to allow annual spending to exceed 18 percent of the economy — more severe than the 19.9 percent target for 2021 in the cut, cap and balance bill.

The Counter Argument

Summary from Ezra Klein, Wahington Post, 04/04/2011

Bruce Bartlett (columnist for on line newspaper the Fiscal Times)  takes a look at the Balanced Budget Amendment all 47 Republicans signed their names to and pronounces it “quite possibly the stupidest constitutional amendment I think I have ever seen. It looks like it was drafted by a couple of interns on the back of a napkin.”

I think “stupid” is the wrong word. “Dangerous” is more like it. And maybe “radical.” This isn’t just a Balanced Budget Amendment. It also includes a provision saying that tax increases would require a two-thirds majority in both houses of Congress — so, it includes a provision making it harder to balance the budget — and another saying that total spending couldn’t exceed 18 percent of GDP. No allowances are made for recessions, though allowances are made for wars. Not a single year of the Bush administration would qualify as constitutional under this amendment. Nor would a single year of the Reagan administration. The Clinton administration would’ve had exactly two years in which it wasn’t in violation.

Read that again: Every single Senate Republican has endorsed a constitutional amendment that would’ve made Ronald Reagan’s fiscal policy unconstitutional. That’s how far to the right the modern GOP has swung.

But the problem isn’t simply that the proposed amendment is extreme. It’s also unworkable. The baby boomers are retiring and health costs are rising. Unless you have a way to stop one or the other from happening — and no one does — spending as a percentage of GDP is going to have to rise. This proposal doesn’t interrupt those trends. It simply refuses to acknowledge them — or, to be more generous, it rules them unconstitutional. This is the equivalent of trying to keep your kid cute by passing a law saying he’s not allowed to grow up.

Another problem: In a recession, tax revenue plummets and GDP stops growing, but spending has to be sustained, or even increased, to a) give people unemployment insurance and Medicaid and other services they need and b) keep the economy from contracting violently. This amendments includes no provisions for recessions, meaning that when the economy contracted, the government would have to contract as well. That is to say, we’re still not out of one of the deepest recessions in American history, and every Senate Republican has co-sponsored a constitutional amendment to make future recessions worse. It’s just breathtaking.

A world in which this amendment is added to the Constitution is a world in which America effectively becomes California. It’s a world where the procedural impediments to passing budgets and raising revenues are so immense that effective fiscal management is essentially impossible; it’s a world where we can’t make public investments or sustain the safety net; it’s a world where recessions are much worse than they currently are and the government has to do more of its work off-budget through regulation and gimmickry. I would like to say something positive about this proposal, say there’s some silver lining here. But there isn’t. This is economic demagoguery, and nothing more. It’s so unrealistic that it would’ve ruled all but two of the last 30 years unconstitutional, which means it’s so unrealistic that there has not yet been a Republican president who has proven it can be done. And that doesn’t just suggest it can’t be done: It suggests that when Republicans are actually in power and have control of the budget, they know perfectly well that it shouldn’t be done. They’re just pretending otherwise for the moment.

Sooooo, best I can figure out the opposing view is that if you force the Congress and the President to plan for a balanced budget then as American's age they won't be able to pay for their benefits?  But if America fails would how will they pay?  

What I see in the Democratic approach is the standard talking points they use about the rich versus the poor and attempting to instill fear and loathing in their core followers.  They also stick to generalities and a whole  lot of examples that are not exactly relevant to what the bill says.

I would like to see a solid set of proposals from the Democrats on how they would bring our budget into balance.  So far all I've seen are sound bites designed to play to the emotions of the masses.  Isn't that what the Roman Emperors did when they built the Coliseum?

So far the voting has been strictly along party lines.  Time for you to decide for yourself who is right.  Obviously there are some who will never waiver from their position but America has a very large group of independents.  Hopefully they will consider carefully the options before them.