McCaskill Leads Democratic Rush Toward Austerity
The Obama Administration called for a 5-year spending freeze in the State of the Union. Republicans have advanced rollbacks to 2008 levels in their early budget projections. And there are outliers like Rand Paul and Michele Bachmann as well. But now, Democrats are threatening to tip the balance over to the side of austerity by embracing draconian cuts of their own.
Claire McCaskill, who already had a spending cut proposal with Jeff Sessions, has now teamed up with Bob Corker for the CAP Act:
The Commitment to American Prosperity Act, the “CAP Act,” would:
(1) Put in place a 10-year glide path to cap all spending – discretionary and mandatory – to a declining percentage of the country’s gross domestic product, eventually bringing spending down from the current level, 24.7 percent of GDP, to the 40-year historical level of 20.6 percent, and
(2) If Congress fails to meet the annual cap, authorize the Office of Management and Budget to make evenly distributed, simultaneous cuts throughout the federal budget to bring spending down to the pre-determined level. Only a two-thirds vote in both houses of Congress could override the binding cap, and
(3) For the first time, eliminate the deceptive “off-budget” distinction for Social Security – providing a complete and accurate assessment of all federal spending.
The rest of the sponsors of the bill are Republicans, but McCaskill signed her name to this. Look at what it would do: cap spending at Reagan-era levels, at a time when total population and particular populations of the elderly have grown significantly. It would bind future Congresses to this artificial, pre-determined spending level. It punts to OMB on the specifics of those spending cuts, the easy way out for deficit frauds who don’t want to tell their constituents what they’re about to deprive them of.
You could simply not accomplish the cuts in this proposal without massive reductions to Social Security and Medicare. And the fact that this puts those programs “on-budget,” despite their dedicated funding source, is the real tell here. That means that it would be part of the automatic cuts from OMB.
Harry Reid opposes this bill and will fight efforts to put it into action. But it’s only one of multiple efforts where Democrats are crossing the aisle in a bid for austerity. Mark Udall pledged support for a balanced budget amendment, introducing the bill with Richard Shelby. Kent Conrad – who finds McCaskill-Corker unacceptable because it does nothing on the revenue side, which just shows you how extreme a proposal it is – has been working to revive the Bowles-Simpson cat food plan on the Senate Budget Committee. Jeanne Shaheen and Johnny Isakson’s proposal for a two-year budget cycle is perhaps the most inoffensive of these plans (I’d actually go along with that one).
The point is that, with a struggle over the new budget and the debt limit looming, and with conservative activists rallying their representatives to stand firm, you have multiple Democrats perfectly to cut and cap spending, reduce Social Security benefits, and basically drown the government in the bathtub the way that conservatives have always wanted.
Maybe somebody in a Democratic office can forward this Dean Baker post to every one of their colleagues. Austerity would make things worse:
After failing to see the $8tn housing bubble that wrecked the US economy, the austerity crew in the United States has been newly emboldened by the hugely partisan media that desperately want to eviscerate the country’s bedrock social programmes: social security and Medicare.
The elite media and the politicians whom they promote would love to see the United States follow the austerity path of the UK’s new government. However, if this path takes the UK into dangerous economic waters, it could provide a powerful warning to the public in the United States before we make the same mistake.
The British economy looks like it is doing its part. The fourth-quarter GDP report showing that the economy went into reverse and shrank at a 2.0% annual rate is exactly the sort of warning that many of us here were expecting. Weather-related factors may have slowed growth some, but you would have to do some serious violence to the data to paint a positive picture. Of course, the austerity in the UK is just beginning. There will likely be much worse pain to come, with a real possibility that the country will experience a double-dip recession, or at least a prolonged period of stagnation.
While the UK seems to be doing its part, the key question is whether anyone in the United States is prepared to take the lesson.
Sadly, given McCaskill and her colleagues’ actions, I think the answer is “no.”