Cut, Cap, and Balance or Else!

 

by Capitol Confidential

The debt limit increase debate is heating up and conservatives have put together one fascinating proposal as a means to get spending cuts in consideration for a debt limit increase:  The Cut, Cap, and Balance Pledge.  Conservatives seem to be coalescing around this idea, because no other concrete ideas have been put on the table as a precondition for conservatives to allow an increase of the debt limit.  A senior Senate source tells Capitol Confidential that “this is everything.  This is the the big push for conservatives on the debt limit fight.”

The House is controlled by Republicans, yet the Senate is controlled by Democrats.  Divided government makes it hard to pass conservative ideas.  Hard, yet not impossible.

The debate on the Fiscal Year 2011 Continuing Resolution (FY2011 CR) was a case study on how NOT to negotiate with liberals.  The House can pass solid conservative legislation and appropriations bills, yet the Senate can defeat these ideas with inaction.  And they did on the FY2011 CR fight.  Senator Harry Reid (R-Nevada) defeated Speaker John Boehner’s (R-Ohio) Continuing Resolution by not scheduling a debate on the measure. The original House passed FY2011 CR contained massive cuts to spending, yet Reid beat it back by not doing anything and awaiting the inevitable panic by House leaders who snatched defeat from the jaws of victory.  Instead of daring the Senate to just never pass a bill and let the government shut down, the House blinked and sent over short term spending bills, then negotiated a final bill that was bad policy.  The House negotiated against themselves and conservatives ended up with a Continuing Resolution that, according to the Congressional Budget Office, actually increased spending by $3.3 billion.  The leftists over at the Daily Kos made fun of Speaker Boehner for the spending increases in the FY2011 CR.   The resolution of the debate on the continuing resolution for conservatives was an epic failure.

Hopefully conservatives have learned a lesson and will not make the same mistake again.

The debt limit increase is considered “must pass” legislation by the Obama Administration and some pundits, therefore this is the best opportunity for conservatives to leverage cuts to spending.  If you don’t give us what we want, we will not allow the debt limit to increase.  That is the demand - the pledge – the promise for conservatives to the American people.

This pledge has three elements.  The first is “Cut.”  The pledge signers have demanded ”substantial cuts in spending that will reduce the deficit next year and thereafter.”  To meet this demand, it is expected that Congress would have to place significant cuts on the table as part of any legislation increasing the debt limit.  The negotiations have been ongoing between Vice President Joe Biden and a bipartisan bicameral team and it is expected that they agree to some cuts to spending.  Will these cuts be “substantial” enough to please the pledge signers?

Element number two is “Cap.”  The demand is for “enforceable spending caps that will put federal spending on a path to a balanced budget.”  The Balanced Budget Amendment (BBA) has enforceable spending caps, yet they will not kick in until the BBA is passed by both chambers of Congress (with a 2/3rds vote) and ratified by the States.  This demand would necessitate a budget reform that implements and immediate spending cap.  One idea would be to take the 18% of GDP cap in the BBA proposed by Senators Orrin Hatch (R-Utah) and Mike Lee (R-Utah) and memorialize it into legislation.

Element number three is the “Balance” demand and this is a very important one because of the details.  The Hatch-Lee BBA is supported by all 47 Republican Senators and it is strong.  This version of the BBAsatisfies the pledge’s condition that it ” includes both a spending limitation and a super-majority for raising taxes, in addition to balancing revenues and expenses.”  The demand is for Congressional passage before the debt limit is allowed to increase.

Conservatives have started buzzing about this idea.  Conservatives are talking about this idea and why it is a necessary pre-condition on raising the debt ceiling.  Mike Needham, CEO of Heritage Action for America writes that Cut, Cap, and Balance is the only concrete idea on the table right now that will protect from generational theft.

The bottom line is this: our children and grandchildren cannot afford to pay the tab for the spending that is going on in Washington right now. The cut, cap and balance approach is the only one on the table right now. President Obama and Congressional Democrats have not offered a plan to save our country. Instead, they continue to demagogue conservative attempts to restore American exceptionalism.

Chuck Warren wrote here at Big Government that the Balanced Budget Amendment to the Constitution is a necessary element to put the United States of America on a pathway to solvency.

These lawmakers shrewdly see that a balanced budget amendment as one of the few means by which we can begin to return to fiscal sanity as a nation. Year after year, leaders in Washington fail to rein in out-of-control federal spending, and now the United States is on the brink of fiscal collapse. Either our lawmakers can require a constitutionally mandated balanced federal budget, or international bankers and US debt-holders – including China, Russia, and oil-exporting countries – will do it for us, just as they’re now forcing austerity upon Greece, Ireland, Portugal, Spain, and other debt-ridden countries. These debt-ridden countries have seen their unemployment rates nearly double since their financial woes came to a head. Passage of a balanced budget amendment is a major ingredient to getting our national fiscal health back on track

Some members of Congress are asking leaders to support the idea of Cut, Cap, and Balance, because it would cut the deficit next year and prove to the American people that some right leaning politicians have specific ideas on how to balance the budget without raising taxes.  Rep. Phil Roe (R-Tenn.)

It is imperative to the future of the country that we fight for an immediate shift toward fiscal responsibility. That is why I, along with my colleagues in the Republican Study Committee (RSC), wrote a letter to House Speaker John Boehner asking him to “Cut, Cap and Balance.” Specifically, we advocated for discretionary and mandatory spending reductions that would cut the deficit in half next year; enacting statutory, enforceable total-spending caps to reduce federal spending to 18 percent of Gross Domestic Product (GDP); and a Balanced Budget Constitutional Amendment (BBA) with strong protections against federal tax increases and including a Spending Limitation Amendment (SLA). This proposal will put us on a path to prosperity, and I will work to see provisions like this are included in any final agreement.

Senator Jim DeMint (R-S.C.) took it a step further and made support of the Cut, Cap, and Balance Pledge a precondition of his support for higher office.

I’m telling every presidential candidate, if your name isn’t on this list, don’t come see me.

Colin Hanna, President of Let Freedom Ring, argues that the detractors of the Balanced Budget Amendment portion of the Pledge, including former Senator Judd Gregg (a consultant for a Wall Street firm),  have mischaracterized the nature of the demand of Cut, Cap, and Balance.  Supporters of that pledge want the Balanced Budget Amendment to pass the House and Senate to be sent to the States for ratification.  It is not the request that the BBA be ratified by the States before a debt limit increase is allowed to pass.

What America needs is transformative reform that accounts for the inability of lawmakers’ to act like adults, and forces them to do so. Namely, the federal government needs a balanced-budget amendment. Gregg engages in the classic logical fallacy of the “straw man argument” when he dismisses the growing support for a balanced-budget amendment with teeth. He talks about how many years it takes to ratify a constitutional amendment, and suggests therefore that the connection between a BBA and the debt ceiling naively overlooks that timeline. He completely ignores what is actually being proposed: that congressional passage of the BBA, not ratification, be one of the preconditions, along with a statutory cap on spending that would apply until the amendment was ratified by three-fourths of the states. And even with such a statutory cap, we still need immediate, significant, spending cuts.

Erick Erickson, Editor in Chief of Red State, has issued a threat to Republicans who rubber stamp a debt limit increase.  He has taken the pledge a step further into a concrete thret.

If any Republican votes to raise the debt ceiling without forcing (1) substantial cuts; (2) enforceable caps; and (3) sending the Lee-Cornyn-Hatch Balanced Budget Amendment to the states, the conservative movement must unite to beat the hell out of them in a primary. Period. End of Story. No more wimping out. It really is that simple — or at least it is that simple unless your brain has atrophied from being inside the Beltway. Just don’t raise the debt ceiling. Oh, I know, some of you are getting sweaty palms thinking about it and insisting that we must raise the debt ceiling. That’s what we always do. Putting it bluntly — it is time to be a hostage taker and take the debt ceiling hostage to cutting, capping, and balancing the budget.

Mike Flynn, Editor in Chief of this great web site Big Government, is sick and tired of pledges.  He agrees with Erickson that “the time for pledges is over.”  Flynn worries that politicians and groups in Washington will treat this pledge as a means for groups to build lists and politicians an opportunity to dodge the difficult decisions.  That may happen, yet the ideas contained within the four corners of the pledge are laudable.  These are ideas that Tea Partiers can print out to ask Members of Congress for support.  Flynn’s concerns are spot on and conservatives need to make sure that the elected officials in Washington do something significant to deal with the “existential crisis” of our time.  The pledge may help, but the American people need more than a Member of Congress signing up for a pledge.

This morning, Erick Erickson at RedState issued a much needed salvo against the latest wave of ‘this-time-we-really-mean-it” pledges to cut spending. He focused his ire on the many DC-based institutions and individuals who are peddling this new magic elixir, but I think the problem actually goes much deeper than that. Of course, he is already experiencing significant blowback and complaints. And, also, of course, Erickson is being urged to ‘be reasonable.’ That is always the last line of defense for those without the stomach for a fight. I stand with Erickson on this one; the time for pledges is over.For the past several decades we’ve had pledges, commitments, frameworks, understandings, ‘down-payments’ on reform and countless ‘baby-steps’ towards fiscal sanity. And, yet, here we are on the edge of an existential crisis. In addition to a looming fiscal collapse, our government has taken over auto companies, bailed out Wall Street banks, set in motion a government take-over of health care and so overburdened the economy with regulatory red tape that the private sector job engine is permanently stalled.

Brian Darling writes for The Heritage Foundation Blog The Foundry that conservatives need to oppose tax increases as a means to balance the budget.  Conservatives need to shrink government through the use of a balanced budget amendment or other means that forces cuts to spending.  Politicians need to stop the closed door secret meetings on a grand deal to pass a debt ceiling increase and have an open debate including the participation of the American people.

Conservatives want to shrink government and are dead set against raising taxes as a means to balance the budget. The opponents of big government want to pass a Balanced Budget Amendment to the Constitution, set up a tough budgetary mechanism to control spending, and/or implement entitlement reforms. Between liberals and conservatives, there is not much common ground on a debt limit deal or on the future of government spending. The Republican Study Committee has taken a different approach to this debate: Put out a list of demands and pledge to stop any increased debt limit unless these demands are met. Instead of cutting secret deals with the Vice President behind closed doors, the RSC is opting for a transparent public negotiation on the debt limit increase that includes the participation of the American people.”

The debate over increasing the debt ceiling from $14.3 trillion before August 2nd is not going to end well for conservatives if they do not put out a specific list of demands then stick to it.  The supporters of the idea of Cut, Cap, and Balance have put out a specific list of demands and it will be interesting to see if (a) they stick to the list without compromise; and, (b) if the supporters hang tough and follow through with a promise to block the debt limit increase with0ut the list of demands being met.

A pledge is meaningless if these politicians don’t take action.  If a pledge helps conservatives to sign up for a strategy to take a meat cleaver to government spending, then it is a good thing.  If the pledge becomes an end goal, then our conservative leaders in Washington will have missed a great opportunity to use the debt ceiling debate to cut spending , cap the size of government and put our government on a road to balance.