The U.S. House passed the so-called “Cut, Cap and Balance Act” yesterday on a mostly party-line 234 to 190 vote (roll call). Robert Greenstein of the Center on Budget and Policy Priorities summarized the key features of the proposal:
The plan would lock in cuts over the next ten years at least as severe as those in the [House Budget Committee Chairman Paul] Ryan budget plan that the House passed in April, by writing spending caps into law at the year-by-year levels of spending (as a share of GDP) the Ryan budget contains.
It also would hold the increase in the debt limit needed by August 2 hostage to approval by two-thirds of the House and the Senate of a constitutional amendment to require a balanced budget every year while effectively barring any increases in revenues. The constitutional amendment would make all revenue-raising measures unconstitutional unless they secured a two-thirds supermajority in both the House and the Senate.
The “Cut, Cap & Balance” 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. 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.
The Ryan plan, by contrast, does not reach balance until the 2030s, and its federal spending level is just below or modestly above 20 percent of GDP for most of the next two decades, equaling 20¾ percent of GDP in 2030 for example, according to the Congressional Budget Office. The only budget that comes close to meeting the requirements of these constitutional amendments is the Republican Study Committee budget, which eliminates 70 percent of non-defense discretionary funding by 2021, contains deeper Medicare cuts than the Ryan budget, cuts Medicaid, food stamps, and Supplemental Security Income for the elderly and disabled poor in half by the end of the decade, and raises the Social Security retirement age to 70.
Iowa’s Republicans Tom Latham (IA-04) and Steve King (IA-05) both voted for “cut, cap and balance,” while Democrats Bruce Braley (IA-01), Dave Loebsack (IA-02) and Leonard Boswell (IA-03) voted against it. I recommend reading Greenstein’s whole analysis or this piece by Michael Linden and Michael Ettlinger to get a sense of how ludicrous this plan is. Severe spending cuts would not only hurt the most vulnerable Americans, they would drag down the whole economy. I doubt Republicans believe in this fiscal policy. When the U.S. economy was hurting in late 2001 and 2002, the GOP-controlled House passed big deficit spending to stimulate demand, with the support of a Republican president.
But I digress. Yesterday’s House vote was designed to give Republicans cover. Everyone knows “cut, cap and balance” could never clear the Senate. Even if it did, President Barack Obama would veto the bill.
This vote isn’t just about short-term political battles over the debt ceiling. It will be cited by both parties during next year’s campaigns in Iowa’s new third and fourth Congressional districts. As a preview of campaign rhetoric to come, I’ve posted comments from both sides after the jump. First, Latham makes the case for the bill and pledges not to vote for any debt ceiling increase “without passage of the major features outlined in the Cut, Cap and Balance Act.” Latham voted many times for unbalanced budgets and to raise the debt ceiling while Republicans controlled the House during George W. Bush’s presidency. He’s hoping those votes will slip down the memory hole.
Next, I posted a Democratic Congressional Campaign Committee press release charging that Latham just voted to “cut, cap and end Medicare.” An almost identical statement went out targeting King.
King didn’t send out a press release on yesterday’s vote, but he has stood with Republicans who demand huge spending cuts and no revenue increases as the price for raising the debt ceiling. After the jump, I posted a DCCC statement highlighting King’s previous votes to increase the debt ceiling. Both King and Latham stopped voting for debt ceiling hikes when Democrats had a House majority from 2007 through 2010.
Final note: two House Republicans who are running for president, Michele Bachmann and Ron Paul, voted against “cut, cap and balance” yesterday. Bachmann “said the bill does not go far enough to fundamentally restructure the way Washington spends money, and in particular does not go after ‘ObamaCare.'” Paul said “this Act cannot balance the budget under any plausible scenario,” because it’s “impossible” to do that without cutting defense spending, Medicare and Social Security.
Latham opinion piece released July 19:
LATHAM REPORT: The Case for Cut, Cap and Balance
By Iowa Congressman Tom Latham
Common sense dictates that we must deal with the nation’s massive debt. When faced with a problem on a scale as massive as our country’s $14 trillion debt, the most effective strategy is to deal with the problem at its source. That means addressing the out-of-control spending binge that has erupted in Washington over the course of the last few years. To do this, we need a plan that combines spending cuts with permanent changes to how Washington spends your tax dollars.
But it would also be irresponsible for us not to ensure that this type of crisis never again threatens the economic stability of this nation or her people. The House of Representatives will take bold action on the debt crisis by considering legislation that cuts spending in the short term, caps it in the long term and requires Congress to approve a balanced budget amendment to the Constitution before it can approve any increase in the debt ceiling. This is a common-sense solution that not only addresses the crisis but also comprehensively changes the way Washington works.
If signed into law, the legislation — titled the Cut, Cap and Balance Act — will put our country on a path toward fiscal responsibility. Rampant spending has driven the national debt to the point of crisis, and the Cut, Cap and Balance Act is a common-sense solution that will save our children and grandchildren from a future of bankruptcy.
The legislation contains three major components. First, it cuts total spending in Fiscal Year 2012 by $111 billion, ratcheting back spending to below 2008 pre-bailout, pre-stimulus levels. Next, it institutes spending caps that will keep spending levels near their historic average of about 20 percent of gross domestic product by 2021. Current spending has ballooned to about 23 percent of GDP, exacerbating the debt crisis. Finally, the Cut, Cap and Balance Act requires passage of a balanced budget amendment to the U.S. Constitution in order to raise the debt limit. I voted for a balanced budget amendment in 1995 in one of my first votes in Congress. Such a measure would set in stone the principle of fiscal restraint and would bar the government from spending money it doesn’t have.
In addition to co-sponsoring this legislation, I signed a pledge last week to oppose any measure to raise the country’s debt limit without passage of the major features outlined in the Cut, Cap and Balance Act. Any proposal to raise the debt ceiling without substantial cuts, enforceable spending caps and House and Senate approval of a balanced budget amendment will not receive my vote – period.
The Cut, Cap and Balance Act under consideration in the House is a solution to the fiscal mess that will make real changes to how Washington spends taxpayer dollars. The federal debt has skyrocketed past the point of crisis. A problem of this scope requires a real solution that addresses the crisis at its root. The Cut, Cap and Balance plan will take immediate action to control spending and save the American Dream from its current path towards extinction.
Democratic Congressional Campaign Committee press release, July 19 (an almost identical release targeted the same votes by Steve King):
Representative Latham Votes to “Cut, Cap and End Medicare”
Instead of acting to create jobs, Representative Tom Latham (IA-04) today voted for a new House Republican scheme to “Cut, Cap and end Medicare” for seniors. The plan would again force an end to Medicare and raise health care costs for seniors while protecting tax breaks for Big Oil companies and multi-millionaires. This is the third time in three months that Republicans in the House of Representatives have voted to end Medicare.
The non-partisan Center on Budget and Policy Priorities wrote that “Cut, Cap and end Medicare” is an “ideologically extreme” plan that “would inexorably subject Social Security and Medicare to deep reduction.” Representative Jim Jordan, the Chairman of the 180 Members Republican Study Committee, said this scheme “basically mirrors the budget proposal that the House passed this year.”
“Representative Tom Latham voted for the third time to support the Republican plan to end Medicare and raise health care costs for seniors, while protecting subsidies for Big Oil and tax breaks for billionaires,” said Jesse Ferguson of the Democratic Congressional Campaign Committee. “As Representative Tom Latham doubles down on the plan to end Medicare, seniors and hardworking families are being asked to pay for Big Oil and billioires’s tax breaks. That’s just wrong and an example of Tom Latham’s misguided priorities: ending Medicare instead of creating jobs.”
Background
Latham Voted for the Cut, Cap and Balance Plan that is More Extreme than the Republican Budget . The non-partisan Center on Budget and Policy Priorities wrote: “The measure […] 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 would inexorably subject Social Security and Medicare to deep reductions.” [H.R. 2560, Vote #606, 7/19/11; Center on Budget and Policy Priorities, 7/16/11]Balanced Budget Amendment Would End the Medicare Guarantee and Slash Services While Giving a Tax Break for the Wealthy. “The balanced budget constitutional amendment (H. J. Res. 1) recently approved by the Judiciary Committee is a masquerade designed to foster the policy choices of the Republican budget: to end the Medicare guarantee for seniors and slash vital services while providing tax breaks for the wealthy. This balanced budget amendment would have dire consequences on the economy, on Medicare and other government guarantees to our citizens, and on Congress’s ability to respond to changing needs.” [Democratic House Committee on the Budget, 6/27/11]
Latham Voted for the 2012 Republican Budget Proposal that Would “Essentially End Medicare.” In April, Tom Latham voted to end Medicare by supporting the Republican budget. The Wall Street Journal reported “The plan would essentially end Medicare, which now pays most of the health-care bills for 48 million elderly and disabled Americans, as a program that directly pays those bills.” [H Con. Res. 34, Vote #277, 4/15/11; Wall Street Journal, 4/4/11]
Latham Voted to Deem the Republican Budget as Having been Passed by Congress. Representative Tom Latham voted to end Medicare by supporting a “deeming resolution” in H. Res. 287 which states “the provisions of House Concurrent Resolution 34 […] shall have force and effect […] in the House as though Congress has adopted such concurrent resolution”. [H. Res. 287, Vote #382, 6/1/11]
DCCC press release of July 19 (Latham voted for all of the same bills referenced below):
FACT CHECK: Representative Steve King Repeatedly Voted to Increase Debt Limit, But Now Will Hold Seniors Hostage to Protect Tax Breaks for Billionaires, Big Oil
Representative Steve King (IA-04) is trying to hide his record in Washington of selling out seniors to protect tax breaks for billionaires and Big Oil. Over the past decade, Representative Steve King has voted at least five times to increase the debt limit. So what’s the difference now? Representative King would rather recklessly endanger our economy than ask billionaires and Washington special interests to pay their fair share. He’s even claiming that the country won’t default on our debts while also pushing legislation that puts China before Iowa seniors.
When King assumed office in 2003, the Federal Debt was estimated at $6.38 trillion and has risen nearly $8 trillion while under his watch.
2005: Voted to Increase Debt Limit by $781 Billion. In 2005, King voted to adopt a conference report on a budget resolution that triggered a rule that deems to have passed legislation raising the debt limit to accommodate the spending and revenue levels approved in the adopted budget resolution. Specifically, the limit would be raised by $781 billion to $8.965 trillion. The report was adopted, 214-211. [H Con Res 95, Vote #149, 4/28/05; CQ Floor Votes, 4/28/05; CQ Today, 5/02/05; CRS Report, 4/5/11]2004: Voted to Increase the Debt Limit by $800 Billion. In November 2004, King voted for final passage of the Debt Limit Increase to increase the federal debt limit to $8.18 trillion, an $800 billion increase. [CQ Floor Votes; S 2986, Vote #536, 11/18/04]
2004: Voted to Increase Debt Limit by $690 Billion. In 2004, King voted in favor of a Republican budget that spent $174 billion of the Social Security Trust Fund in order to pay, in part, for $55.2 billion in additional tax cuts. The measure also increased the public debt limit by $690 billion. The measure passed 216-213. [CQ House Action Reports, 5/19/04; USA Today, 5/20/04; S Con Res 95, Vote #198, 5/19/04]
2003: Voted to Increase Debt Limit by $864 Billion. In 2003, King voted to pass a Republican budget that triggered a rule that deems to have passed legislation raising the debt limit to accommodate the spending and revenue levels approved in the adopted budget resolution. Specifically, the budget would have raised the debt limit from $6.4 trillion to $7.264 trillion [H Con Res 95, Vote #82, 3/21/03; H Con Res 95, 3/21/03; CRS Report, 4/5/11; National Journal’s Congress Daily, 4/11/03]
2003: Voted to Increase Debt Limit by $984 Billion. In 2003, King voted to adopt a conference report on a budget resolution that triggered a rule that deems to have passed legislation raising the debt limit to accommodate the spending and revenue levels approved in the adopted budget resolution. Specifically, the debt limit was raised from $6.4 trillion to $7.384 trillion. The report was adopted, 216-211. [H Con Res 95, Vote #141, 4/11/03; CRS Report, 4/5/11; National Journal’s Congress Daily, 4/11/03]
Debt Has Increased by $7.9 Trillion during King’s Time in Office. When King assumed office, the Treasury Department estimated the public debt at 6.388 trillion. It has since increased to $14.342 trillion. [Treasury Direct, accessed 7/19/11]
King Sponsored a Bill to Set Priorities for Government Payments-Puts Paying Interest to China at the Top. In July 2011, King introduced HR 2496, entitled the Payment Reliability for our Obligations to Military and Investors to Secure Essential Stability Act, that sets payment of military salaries and payment of principal and interest on the debt as the top priorities but does not place Social Security or Medicare payments to seniors as a priority whatsoever. [HR 2496, 7/12/11]