During the debate over whether or not to raise the nation’s debt ceiling, many Republicans pushed for adoption of the radical “cut, cap, and balance” plan, which would have led the country into default without the imposition of a federal cap on spending and the adoption of a balanced budget amendment to the Constitution.
The debt ceiling fight has come and gone, but it seems that “cut, cap, and balance” will remain, as Rep. Mick Mulvaney (R-SC) told Politico that GOP presidential hopeful Gov. Rick Perry (R-TX) will make the plan’s provisions “a centerpiece of his platform“:
Freshman Rep. Mick Mulvaney (R-S.C.), who is helping to set up the the Hill meeting for Perry, is serving as an economic adviser to the campaign. He said Perry plans to make House Republicans’ signature Cut, Cap and Balance approach to the budget this year “a centerpiece of his platform.” Mulvaney added that he hopes to help “put some meat on that bone.”
This plan has some significant problems, the first of which is that a balanced budget amendment is economically bone-headed, as it would force the government to cut spending during an economic downturn, making the downturn worse.
Bill Hoagland, a budget adviser to Republican leaders from 1982 to 2007, called the amendment “a political cheap shot,” while Scott Galupo, a former staffer for Boeher, has called the idea “quite simply, insane.” Bruce Bartlett, a former economic adviser for Presidents Ronald Reagan and George H.W. Bush, noted that the amendment is a phony solution to nation’s budget problems that allows Republicans to support a balanced budget while not having to “support anything politically unpopular.”
A cap on spending, meanwhile, bring its own set of problems. “Cut, cap, and balance” stipulates a cap on spending at 18 percent of the economy, a level which the House Republican budget (complete with its elimination of Medicare) doesn’t attain until after 2040.
As the Center for American Progress’ Michael Ettlinger and Michael Linden noted, actually getting spending down to that level would require 25 percent cuts in every government program, including the Pentagon and Social Security (or, alternatively, deeper cuts in other programs for every program that gets exempted). No President in the last 50 years, including conservative icon Reagan, has even proposed a budget with spending so low.
As Bloomberg reported this week, Perry “has so far been the least specific about the policies he’d pursue” amongst the GOP’s primary contenders. If his embrace of “cut, cap, and balance” is any indication of the direction in which he’s going, the specifics are not going to be pretty.