Cut, Cap & Balance: Making the Maxim of the Rich Getting Richer a Constitutional Right
Posted: Wednesday, July 20, 2011
by Edward Rhymes
•The plan would lock in cuts over the next ten years at least as severe as those in the Ryan budget plan.
•It would require a two-thirds vote in the House & Senate to raise the current debt ceiling.
•The measure cites three constitutional balanced-budget amendments (H.J. Res 1, S.J. Res 10, and H.J. Res 56) and states that Congress must approve one of them or a similar measure before the debt limit can be raised.
•The bill would require cuts totaling $111 billion immediately, in the fiscal year that starts 75 days from now.
•Requires that federal spending be kept at 18% of GDP in the next fiscal year
Now that we outlined the various points of the bill let’s deconstruct those points:
1.By not adding anything in terms of new revenue, deep cuts to crucial programs becomes the only alternative that’s left for lawmakers.
2.By requiring an impossible-to-reach super-majority in both houses of Congress to raise the current debt ceiling, the ultra-conservatives in the House have said, in effect, economic implosion doesn’t faze us in the least.
3.All three of the cited proposals would require cuts deeper than those in the Ryan budget. All three measures would establish a constitutional requirement that total federal expenditures may not exceed 18 percent of GDP, and all three would essentially require that the budget be balanced within the coming decade.
4.Although $111 billion represents less than 1% of the economy, the timing of the cuts might further weaken the recovery. Congressional Budget Office Director Douglas Elmendorf told the House Budget committee in June that a $100 billion cut next year would be enough to affect their projections for GDP growth over the next few years.
5.Their bill is designed to keep spending at 18 percent of GDP, while President Obama has forwarded that spending be 23% of GDP. It might appear, to some, that those numbers aren’t that far apart, percentage-wise, but that 5% represents $700 billion dollars in spending. Let’s put that in greater perspective: Former CBO Director Rudolph Penner states that by 2035, spending on Medicare, Social Security and interest on the debt is likely to account for 14% of GDP. Under an 18% spending cap, which would leave 4% to pay for everything else… the United States today spends 4.7% of its GDP on defense alone.
What this bill shows us, in bright and brilliant color, the extreme economic orthodoxy of the ultra-conservative wing of the Republican Party. This is, as a lucid Newt Gingrich said of the Ryan plan, right-wing social engineering.
In the face of a 9.2 percent unemployment rate, cuts made this fast and this deep poise us not merely for a recession, but a depression. The cuts would equal 0.7 percent of the projected Gross Domestic Product in fiscal year 2012 and would cause the loss of roughly 700,000 jobs in the midst of this rather anemic economy. The Cut, Cap & Balance Act fails in that a balanced bottom line does not automatically equal a healthy economy.
It also fails in that it is unjust and imbalanced in its approach. If this plan became law, Congress would continue to decide (as they do now) by a straight majority in the House and a 2/3 vote in the Senate (or a straight majority in some cases), to cut funding for education, healthcare, Social Security, etc. To raise taxes and close corporate loopholes, however, would require a super-majority in both houses. This piece of legislation makes Paul Ryan look like a stark, raving centrist.
The Republican leadership knows that this vote is purely symbolic, but contained in the shell of this symbol is the kernel of a very real ideology. This group of legislators propose making the continued segregation and concentration of wealth towards the top a near-constitutional right, while, simultaneously, making deep cuts into programs that help the most vulnerable, a sure certainty.
The cut, cap and balance mindset operates in a decontextualized environment that ignores current economic realities; gives no leeway to navigate through any future economic crisis; continues policies such as rampant deregulation and tax policy that got us where we are in the first place; and leaves the most impoverished in our society in greater financial uncertainty and difficulty.
Tax cuts, we are told, is the key to job creation, but does that hold up under any objective examination of the facts? No. In the 1990's when a balanced approach to the deficit was used (a combination of tax increases and spending cuts at a ratio of 1 to 1), we see a net gain of about 23 million jobs. Under the Bush administration, with its belief that tax breaks, in and of themselves, produce jobs, we see not only a net zero gain when it came to jobs, but we also see the poverty rate begin to rise in 2005; a decline in average household income and record income inequality.
As I said in the beginning, I know that this bill won't become law, but any bill such as this, that passes any house of Congress, ought to make all of us more vigilant. Yes, we need to cut out the inhumane rationales to economic policy; we need to cap the American employment-well that is bleeding more jobs than it's producing and we should stop trying to balance the budget on the backs of those who can least afford it and, most importantly, did not cause the crisis we are currently in.
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Top-level comments on this article: (2 total)Man, this article is full. I have to check your art and craft out more completely and thoroughly as we progress through our political theatre. Thanks for the High 5, and I am your Fan.
Thanks for commenting; high-fiving and joining the fan club Christofer. Your latest piece is a spectacular piece of writing. Take care and thanks again for commenting.
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