Cut, Cap And Balance Is One Of Most ‘Extreme Pieces of Major Budget Legislation,’ Top Budget Analyst Warns

Prominent Washington budget analyst Robert Greenstein says the House Cut, Cap And Balance bill is one of the most extreme budget measures in years.

The so-called “cut, cap and balance” approach to federal deficit reduction House Republicans intend to pass on Tuesday is even more extreme than the budget put forward earlier this year by GOP Rep. Paul Ryan, according to a top independent budget analyst in Washington.

With their talks with the White House over deficit reduction at a standstill, House Republicans will turn, instead, to a plan they call “cut, cap and balance.” The plan would cut $6.2 trillion in federal spending over 10 years, far more than the amount President Obama has put on the negotiating table. It also would cap future spending and require a balanced federal budget in the future.

That legislation, which stands no chance of passing the Democratic-controlled Senate, “stands out as one of the most ideologically extreme pieces of major budget legislation to come before Congress in years, if not decades,” says Robert Greenstein, founder and executive director of the Center for Budget and Policy Priorities (CBPP), a Washington think tank.

“It would go a long way toward enshrining Grover Norquist’s version of America into law,” Greenstein adds, referring to the head of the conservative Americans for Tax Reform organization, who strongly opposes any tax increases and for decades has pushed to dramatically shrink the size and scope of the federal government.

“It is so extreme that even the budget plan of House Budget Committee Chairman Paul Ryan would not fully satisfy its requirements — the Ryan plan’s budget cuts wouldn’t be severe enough,” Greenstein continues, referring to the draconian spending blueprint put forward this year by the Republican chairman of the House Budget Committee.

The Republican plan likely would cost 700,000 Americans their jobs and threaten a variety of safety net programs upon which low-income Americans rely, says Greenstein, a former administrator of the Food and Nutrition Service at the Department of Agriculture under President Jimmy Carter, where he directed the agency that operates the federal food assistance programs, such as the food stamp and school lunch programs, and helped design the landmark Food Stamp Act of 1977.

700,000 Jobs And More At Risk

“The budget cuts under ‘Cap, Cut, and Balance’ would start with $111 billion in cuts in the fiscal year that starts October 1, 2011, about 75 days from now,” he says. “This would cause the loss of roughly 700,000 jobs in the current weak economy, relative to what the number of jobs would otherwise be.

“Furthermore, the legislation bars any increase in the debt limit until both houses of Congress approve a constitutional amendment requiring that no measure that raises any taxes may pass Congress unless two-thirds of both the House and the Senate approve it,” he adds. “This would render it virtually impossible ever to raise any revenue, even by closing egregious special-interest tax loopholes.

“The legislation would thereby hold the needed increase in the debt limit hostage to congressional approval of a constitutional tax limitation,” Greenstein says.

Adding to the extreme nature of the measure, the legislation 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, Greenstein says. 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, he notes.

“‘Cut, Cap, and Balance,’ by contrast, subjects all such programs to across-the-board cuts if its spending caps would be exceeded,” he says.

“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,” he adds. “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.”


Scott Nance is the editor and publisher of the news site The Washington Current. He has covered Congress and the federal government for more than a decade.

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