On July 20th, the House passed H.R. 2560, the so-called 'Cut, Cap and Balance Act' - which should be named the 'Cut, Cap, and End Medicare Act' by a vote of 234-190. This bill is nothing more than an ideological piece of legislation for Republicans to pursue their policy agenda of ending Medicare and extreme spending cuts, while protecting tax breaks for special interests and the wealthiest Americans. The bill incorporates the House GOP budget that ends Medicare, and then calls for deeper cuts by requiring adoption of a radical GOP constitutional amendment.
- The So-Called GOP “Balanced Budget Constitutional Amendment” Isn't About Balancing the Budget. The GOP constitutional amendment isn't about balancing the budget; it's about enshrining Republicans' extreme ideology into the Constitution. Rather than simply requiring a balanced budget, the amendment has two very damaging provisions that go far beyond a balanced budget: 1) requiring a 2/3rds vote for any measure that raises revenue, such as bills that close loopholes; and 2) setting a spending cap of 18% of GDP within the decade. By requiring a supermajority vote to raise revenues, the amendment actually makes it more difficult to achieve balanced budgets.
- Bill Also Holds An Increase in the Debt Limit Hostage to Passage of a Radical GOP Constitutional Amendment, Which Requires Deeper Cuts Than House GOP Budget. The bill requires that both the House and Senate must pass a radical GOP constitutional amendment and send it to the states for ratification before the debt limit can be raised. Since passage will never happen, these provisions recklessly bring the country closer to default.
- Bill Incorporates the House GOP Budget Plan That Ends Medicare. Republican leaders themselves have stated that this bill incorporates the House GOP budget plan passed in April. For example, on FOX News, Rep. Jim Jordan, Chair of the Republican Study Committee, stated that the bill “mirrors the budget proposal that passed the House earlier this year.” This is the same Republican budget that ends the Medicare guarantee and more than doubles health care costs for seniors. The bill makes the spending levels contained in the House GOP budget enforceable by statute.
- Under the GOP Constitutional Amendment, It Would be Easier to Cut Medicare Than It Would Be To Close Tax Loopholes for Big Corporations and Special Interests. As Rep. Chris Van Hollen has pointed out, since the GOP amendment requires a two-thirds vote to raise revenues, “Under their proposal, it would be easier to cut Medicare than it would be to cut subsidies for oil and gas companies.”
- GOP Constitutional Amendment Requires Deep Cuts in Medicare and Social Security. This GOP constitutional amendment sets a spending cap of 18% of GDP - requiring even deeper spending cuts than the House GOP budget. Federal spending has not been 18% or less of GDP since 1966 - when the very first enrollees were first entering Medicare. As the Center on Budget and Policy Priorities has concluded, “[Under the GOP proposal,] reaching and maintaining a balanced budget in the decade ahead while barring any tax increases would necessitate deep cuts in Social Security, Medicare, and Medicaid.” These deep cuts would essentially end these programs as we know them today.
Robert Greenstein, Executive Director of the Center on Budget and Policy Priorities, has stated this bill 'stands out as one of the most ideologically extreme pieces of major budget legislation to come before Congress in years, if not decades.'
The Bill's “Cut” Provisions
- Requires immediate spending cuts of $111 billion in FY 2012, the level of FY 2012 cuts in the House GOP budget passed in April, despite the fact that there is currently 9.2% unemployment.
- Includes $76 billion in domestic discretionary cuts and $35 billion in various mandatory cuts.
- Puts in place the inadequate 302(a) cap on discretionary spending that was included in the House GOP budget passed in April. As Rep. Norm Dicks, Ranking Democrat on the House Appropriations Committee, has pointed out, “[This cap will] necessitate draconian cuts to programs that Americans depend on, including Pell Grants, Head Start, Food Safety, and WIC, as well as assistance to state and local governments for law enforcement, infrastructure improvements, housing, community development, public health, and other needs.”
The Bill's “Cap” Provisions
- Imposes spending caps for the next 10 years, enforceable by sequestration.
- Includes spending caps that reflect the radical and damaging spending cuts over the next 10 years that were contained in the House GOP budget passed in April.
The Bill's “Balance” Provisions
- Cites three GOP balanced budget constitutional amendments (H.J.Res. 1 (Rep. Goodlatte), S.J.Res. 10 (Sen. Hatch), and H.J.Res. 56 (Rep. Walsh)) and requires that the House and Senate must approve one of them or a similar measure and send it to the states for ratification BEFORE the debt limit can be raised.
- Since passage of this type of radical GOP constitutional amendment will never happen (passage requires a two-thirds vote), these provisions recklessly bring the country closer to default.
- All three of these GOP constitutional amendments are virtually identical. Republicans claim that these are “balanced budget” amendments- but they all go far beyond requiring balanced budgets within the decade. They are very different from any balanced budget constitutional amendment ever considered by Congress. All three add the following three additional requirements to be placed in the Constitution:
- Setting a spending cap of 18% of GDP within the decade.
- Requiring a 2/3rds vote to raise revenue.
- Requiring a 3/5ths vote to raise the debt ceiling.
- All three of these GOP constitutional amendments would require cuts deeper than those in the House GOP budget - since even the radical House GOP budget does not lower spending to 18% of GDP within the decade.
- The GOP constitutional amendment is not about balancing the budget; it's about pursuing the radical and ideological policy goals of the Republicans, and enshrining Republicans' extreme ideology into the U.S. Constitution.
- The GOP constitutional amendment protects tax breaks and tax subsidies for the wealthy and powerful by imposing a supermajority requirement for any measure that would raise revenue.
- The GOP constitutional amendment called for would impose a spending cap of 18% of GDP within the decade. Federal spending has not been 18.0% or less of GDP since 1966 - when the very first enrollees were first entering Medicare. There are now 46 million Americans enrolled in Medicare. An 18% of GDP spending cap would inevitably lead to drastic Medicare cuts.
- The Center on Budget and Policy Priorities has concluded, “[Under the GOP proposal,] reaching and maintaining a balanced budget in the decade ahead while barring any tax increases would necessitate deep cuts in Social Security, Medicare, and Medicaid.” These deep cuts would essentially end these programs as we know them today