Starving the Beast: Cut, Cap and Balance

The debt limit is a largely symbolic check on excessive borrowing which in the past has been frequently raised with little to no controversy. Such periodic increases are necessary to keep the government running and paying its bills, regardless of ideology.

However, Congressional Republicans are now demanding that certain conditions must be met in order to win their approval of a debt ceiling increase. They have termed their list of demands Cut, Cap and Balance, and claim it is a necessary measure in order to keep the government debt from spiraling out of control, and thus keep the country functioning.

Yet the Cut, Cap and Balance Act scheduled to reach the House floor this week is anything but necessary to keep the country functioning. Rather, it is the crown jewel, the final step of conservatives’ long-pursued “Starve the Beast” strategy to downsize government. It would radically limit the flexibility of the federal government to provide a social safety net, buttress the economy in tough times and respond to great national challenges, now and into the future.

But don’t take my word for it. Check out this week’s 90 Second Summary and decide for yourself:

90 Second Summaries: Season 2, Episode 16
H.R. 2560: Cut, Cap and Balance Act of 2011

Introduced 7/15/11
Sponsor: Rep. Jason Chaffetz (R-UT3). Key cosponsors: Reps. Mick Mulvaney (R-SC5), Reid Ribble (R-WI8)
Click here to download this summary (pdf)

Co-Sponsors: 87 (0 Democrats, 87 Republicans). Full list at http://thomas.loc.gov/cgi-bin/bdquery/z?d112:HR02560:@@@P

Senate Companion: S. 1340, sponsored by Sen. Mike Lee (R-UT). 32 cosponsors, all Republicans. Similar but not identical to the House bill. Has been endorsed by Minority Leader McConnell (R-KY), but path remains unclear with Democrats strongly opposed.

Status: Rules Committee meeting scheduled for 7/18/11. Will likely reach the House floor on 7/19/11. Unclear whether it will pass.

Purpose: Conservative Republicans have long sought to downsize government, arguably as far back as the New Deal’s enactment in the 1930s. Because gutting popular social programs without a compelling reason would be political suicide, anti-government strategists such as Grover Norquist have advocated a plan known as “Starve the Beast” in recent decades. This plan has involved repeatedly enacting large tax cuts tilted heavily towards the rich, fomenting deep disenchantment with the government, and running up enormous deficits. Using the specter of runaway debt as an excuse, it is then possible to enact measures that roll back popular programs enacted in the Progressive, New Deal and Great Society eras.

Decades of disciplined and effective organizing have created the conditions where drastic cuts to popular programs are now possible. Thus, Republicans are advancing the “Cut, Cap and Balance” plan as the final step to Starve the Beast.

Summary: H.R. 2560 would set in place a framework to permanently shrink the government. Specifically, it would:

1) Cut spending by:

• Cutting FY12 non-security discretionary spending by $76 billion, bringing it below 2008 levels;
• Cutting all mandatory spending other than Social Security, Medicare, veterans’ benefits and interest by $35 billion;
• Adopting the President’s defense budget recommendations and allowing for war supplementals of $126.4 billion;

2) Cap federal spending as a percentage of GDP by:

• Setting a limit of 21.7% for FY2013, declining to 19.9% by FY2017 and remaining roughly constant through FY2021. These limits encompass all mandatory and discretionary spending, including interest on the debt;
• Assigning responsibility to determine spending limits to the Office of Management and Budget;

3) Balance budgets in the future by:

• Requiring that the debt limit cannot be raised until Congress sends a Balanced Budget Amendment to the states;
• Mandating that such a constitutional amendment must contain both a provision that caps spending as a percentage of GDP and a requirement that a 2/3 vote in both chambers is necessary for any tax increase.

Supporters: most Republicans, conservative think tanks, Tea Party organizations

• Supporters see federal spending as out of control, and Washington cannot be trusted to rein it in without binding constraints. They believe a Balanced Budget Amendment is the only foolproof way to accomplish this goal.

Opponents: Democrats, CBPP and allied organizations, AFL-CIO, NAACP, NOW, etc.

• Opponents see this as perhaps the most fundamentally dangerous piece of budget legislation advanced in decades. They claim this plan is so extreme that not even the much-maligned Ryan Budget would satisfy its draconian requirements, which would be virtually irreversible if enacted. The measure would also render measures to combat economic downturns functionally impossible.

Further links
Full bill text: http://www.govtrack.us/congress/bill.xpd?bill=h112-2560
Paul Krugman explains Starve the Beast in 2003: http://www.nytimes.com/2003/09/14/magazine/the-tax-cut-con.html
CBPP intro to the federal budget process (explains budget authority vs. outlays): http://www.cbpp.org/cms/?fa=view&id=155
Republican Study Committee summary of the plan: http://rsc.jordan.house.gov/Solutions/debtceiling.htm
The Hill article on opposition to the balanced budget amendment: http://bit.ly/nX0iEU
Robert Greenstein statement on the bill: http://www.cbpp.org/cms/index.cfm?fa=view&id=3537
Washington Post article on the bill’s status: http://wapo.st/mXQGBB

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