The Cut, Cap, and Balance Act Follies

To: Rep. Todd Young
U.S. House of Representatives, IN-09

Cc: Sen. Richard Lugar, Sen. Dan Coats, Pres. Barack Obama

Subj: Your support of the “Cut, Cap, and Balance Act”

Rep. Young,

I received your letter regarding your support for the nonsensical “Cut, Cap, and Balance Act”, which is nothing but one more vehicle designed to insure the middle class and poor pay the costs of their corporate overlords’ folly, while continuing to see their own wages and access to sustainable economic conditions further deteriorate. It is just one more example of the Republicans’ and their guru Grover Norquist’s vision of strangling government until it dies in the bathtub.

FWIW, not that I have any great expectation you will actually read and digest it, I am including below an analysis of this ridiculous proposal, exposing it for the folly and further erosion of values and attack on rational management of the economy that it is.

As I have said before, and will repeat, and it is a simple truth:
1. The need for rational government will not go away. Republicans right now are irrational.
2. The need for revenues will not go away. The 50% tax decrease on the richest Americans that has happened in the past 12 years MUST expire.
3. Corporations MUST start paying their fair share of taxes, by ending all loopholes, subsidies, and hiding profits in off shore accounts.
4. Hedge fund managers and others in the financial industry must see their tax loopholes, which tax them at capital gains rates, ended. They should be paying at the same salary rates as the rest of us working class (or retired, in my case) peons.


I would suggest any readers follow the link and read the entire article. Here is the gist.

The “Cut, Cap, and Balance Act” that the House of Representatives will vote on next week stands out as one of the most ideologically extreme pieces of major budget legislation to come before Congress in years, if not decades. It would go a substantial way toward enshrining Grover Norquist’s version of America into law.

The “Cut, Cap, and Balance Act” that House Republican leaders are circulating achieves these results through a multi-faceted attack on the federal government. It would require that total federal spending shrink to about 20 percent of the Gross Domestic Product (GDP) starting in 2015 (by writing the Ryan budget’s year-by-year expenditure levels as a share of GDP into law, as caps to be enforced through automatic across-the-board budget cuts if the caps otherwise wouldn’t be met). The Ryan budget would slash non-security discretionary programs by 33 percent by 2021 (relative to CBO’s January baseline), cut Medicaid by $1.4 trillion over the decade, and cut an array of other programs from Medicare to Pell Grants, while shielding the defense budget and further cutting taxes for the wealthiest Americans.

In addition, as noted, the measure seeks to render it virtually impossible to raise new revenue by barring the necessary increase in the debt limit until both houses of Congress have approved a constitutional amendment which requires that the budget be balanced every year, that no measure raising any taxes may pass Congress unless two-thirds of the House and Senate approve it, and that budget cuts deeper than Ryan’s be instituted.

Adding to the extreme nature of the measure, the legislation also reverses a feature of every law of the past quarter-century that has contained a fiscal target or standard enforced by across-the-board cuts. Since the Gramm-Rudman-Hollings law of 1985, all such laws have exempted the core basic assistance programs for the poorest Americans from such across-the-board cuts. “Cut, Cap, and Balance,” by contrast, specifically subjects all such programs to across-the-board cuts if its spending caps would be exceeded.

It does so even as it seeks to erect a constitutional firewall to safeguard tax cuts and tax breaks for the most well-off Americans. Thus, 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.

Greenstein Statement on the “Cut, Cap, and Balance Act” That the House Will Consider on July 19


Author: Ron