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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Democrats Should Not Contribute to Budget Gimmickery

Given the fairly large disconnect between talk about budget deficits in Washington, and the general unwillingness of pols to talk about specific programs they will cut (even the draconian House Republican Study Committee plan is full of TBD vagueness), budget gimmickery is a constant temptation. And it’s sad to see one prominent Democrat, Sen. Claire MacCaskill of MO, sign onto the mother of all gimmicks, the Commitment to American Prosperity Act of 2011, along with a group of Republicans led by Bob Corker of TN.
The problems with this “CAP Act” begins with the fatuous title, which reflects the current Republican line that government spending is somehow the only obstacle to a booming economy. Beyond that, the bill is one of those which is crazy if serious, and deeply cynical if it’s not.
The craziness comes from the central idea that total federal spending needs to be immediately and inflexibly limited to a fixed percentage of GDP that’s lower than the levels of the Reagan administration. As a long analysis from Paul Van de Water of the Center for Budget and Policy Priorities points out, this sort of “cap” is not only arbitrary, but does not reflect the aging of the U.S. population (which inevitably increases retirement costs), the recent spike in health care costs, or the automatic increase in government spending that occurs during a recession, and, well, the basic need in a democracy for representative institutions to make decisions on taxes and spending. Reaching the target proposed in this bill would involve reducing federal spending–all of it–by about 20% as compared to current levels. So much for Washington having any ability to deal with any challenges to the country, domestic or international. The negative impact on the economy would be vast and immediate.
But the cynicism comes from the mechanism by which the CAP Act would achieve its crazy goals: “sequestrations” of spending conducted by the Office of Management and Budget and enforced by an executive order of the president. The “sequestration” gimmick was first devised in the 1980s-era Gramm-Rudman-Hollings law, described by one of its sponsors as “a bad idea whose time has come.” The “idea,” so to speak, is to respond to the inability or uwillingness of Congress to identify specific program cuts by administratively cutting every single program by the same percentage. The only difference is that the CAP Act, unlike Gramm-Rudman-Hollings, would include mandatory spending–basically Social Security and Medicare–in the sequestrations. So under this system, one fine day, without a single vote being taken in Congress, Social Security beneficiaries would see reductions in their checks necessary to achieve some arbitrary level of annualized savings; doctors would see their Medicare reimbursements docked; Medicare beneficiaries would see their premiums jump.
Now the CAP Act isn’t going to be enacted any time soon, if only because Republicans will not seriously contemplate exposing the Pentagon to across-the-board cuts. But this sort of gesture is not benign, particularly for Democrats. Aside from very literally establishing federal spending reductions as the overriding national priority, more important than the economy, fundamental fairness, and every public responsibility imaginable, Democratic sponsorship of such measures offers Republicans a specific concession they very badly want, and that President Obama denied them in the State of the Union Address: bipartisan cover to go after Social Security and Medicare, which they fear to do on their own because it would provoke the certain wrath of their increasingly elderly electoral base. Already, conservative opinion-leaders are touting MacCaskill’s sponsorship of the CAP Act as representing a potential sea-change in the prospects for draconian spending cuts.
Democrats, even–perhaps especially–those who are in politically vulnerable territory, should not be making life easier for conservatives who have contempt for the very ideas of a social safety net and of public investment, and who refuse to let their supposed commitment to fiscal discipline extend to support for progressive taxation or the elimination of special-interest tax benefits. The Donkey Party, after all, didn’t create the current fiscal mess, and presided over the last achievement of a balanced federal budget before George W. Bush took office and demanded a “rebate” for high-income taxpayers and corporations. Moving to the right of Republicans on federal spending will just undermine the few responsible leaders in the GOP, and spur a mindless race to the bottom that obliterates all thoughtful efforts to bring long-term spending and revenues into better balance.

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