House Republicans on Tuesday are expected to vote for a bill that will make unmistakably plain their intentions for our government and the work government can and should do for its citizens. They call the bill the "Cut, Cap and Balance Act," but what it does is slash, crush and topple the pillars of economic security and job growth for millions of Americans.
The fact that Tuesday's vote is largely an ideological exercise—it has no chance of passing the Senate in anything close to its present form, and the White House today issued a strongly worded veto message—does not make it any less important. That's because this legislation goes a long way toward setting up the debate we ought to be having in 2012 between today's conservative vision for America and the progressive alternative that will lead the nation out of its economic crisis.
Robert Greenstein at the Center for Budget and Policy Priorities writes that the legislation "stands out as one of the most ideologically extreme pieces of major budget legislation to come before Congress in years, if not decades."
The legislation, sponsored by Rep. Jason Jaffetz of Utah, would cut federal spending by $111 billion in fiscal year 2012, with none of those cuts coming out of defense and security spending. The legislation would then go on to require total spending to be reduced from about 24 percent of gross domestic product today to 18 percent of GDP by 2021. And it would require the passage of a balanced budget amendment before any action to raise the debt ceiling by the administration's August 2 deadline.
Also, the proposal would chisel into stone the Republican Party's manic opposition to anything that would increase revenues into the federal treasury. As Greenstein put it in his analysis, "an impoverished elderly widow living on Supplemental Security Income — which provides benefits that lift people to just 75 percent of the poverty line — could have her assistance cut back under the measure’s across-the-board budget cuts even as millionaire hedge-fund managers retained their lucrative carried-interest tax breaks."
The $111 billion in cuts from the administration's $3.7 trillion 2012 budget would do direct harm to economic growth, job-creation and economic security to those who are struggling to recover from the recession. The Center for Budget and Policy Priorities estimates that this alone would lower by 700,000 the number of jobs created and cut economic growth by nearly three-quarters of 1 percent. And these effects would get worse as the legislation inexorably pushes the federal government closer to the Grover Norquist vision of being small enough to be drowned in a bathtub.
The slashing, crushing and toppling of government programs that this legislation would require would end up being worse than what was required by House Budget Committee Chairman Rep. Paul Ryan's devastating budget plan, with its privatization of Medicare and its conversion of Medicaid into a diminished block grant to the states. Notwithstanding the claims made by its sponsors, the so-called "cut, cap and balance" bill would not only require the kind of dismantling of Medicare that Ryan envisioned (an annual voucher for private insurance that would lose value when health care cost increases exceeded the rate of inflation) but would make cuts in Social Security benefits and an increase in the retirement age inevitable. That's true of Social Security because the one significant action Congress could take to make the Social Security trust fund solvent for at least the next 75 years—lift the payroll tax cap—would be virtually off limits.
As the Center for American Progress notes, the measure would in 10 years shrink government spending to the proportion of the economy it was in 1966—the year that seniors were first able to sign up for Medicare and one year after Medicaid went to effect.
What the legislation does not do is change the America of of 2021 or 2011 into the America of 1966, and that is what makes the idea of rolling government spending to 18 percent of GDP impractical as well as devastating in its effects. America today is older (Nearly 13 percent is over 65 today, compared to just over 9 percent in 1966) and spends more than five times as much on health care today as it did in 1966. (See this chart.)
The America envisioned under this legislation is an America that does not invest in its future or its people. Its federal government would stand on the sidelines as its public schools crumbled, its universities continued to price themselves beyond the reach of middle-class families, its infrastructure decayed, its research fell behind that of the rest of the industrialized world and its people became increasingly impoverished, in spirit if not financially. It is indeed the most radical transformation of America that the mainstream of the Republican Party has ever put forward—a world where the rich are unfettered in their quest for ever larger shares of wealth and the middle class is officially abandoned.
More than 200 organizations representing millions of Americans, including the Campaign for America's Future, have endorsed a statement condemning a balanced budget amendment.
In short, this amendment is a recipe for making recessions more frequent, longer, and deeper,
while requiring severe cuts that would harshly affect seniors, children, veterans, people with disabilities,
homeland security activities, public safety, environmental protection, education and medical research. It
would almost certainly necessitate massive cuts to vital programs including Social Security, Medicare,
Medicaid, veterans’ benefits and other programs, and, as noted, lead to even deeper cuts than the House passed
budget.
This is a vision of America's future that the American majority will reject once progressives fully reveal what's behind the slick conservative sloganeering and put forward our own alternative for reviving middle-class America.
