How can you tell the House GOP’s proposal for curbing deficits isn’t a serious one?
Because they tried the same plan before, in 2011. It didn’t work then, either.
There are plenty of reasons to mistrust Republicans’ position, including that they appear to care about deficits only when a Democrat is in the White House. But let’s assume this time they genuinely want to get the nation’s fiscal house in order. After all, the federal government does face long-term fiscal challenges, partly because of the structure of entitlement programs and demographic trends. A constructive debate on these issues would be worthwhile.
Preferably this debate wouldn’t happen under the threat of blowing up the global financial system, but in some context, sure: Let’s talk about it.
The problem is that Republicans have pledged to reduce debt but have ruled out virtually every mathematical path for doing so. They refuse to raise taxes — but cannot agree on what spending programs to cut, or by how much.
Which is not super surprising: Almost every program is backed by a constituency that would object to its being cut. That’s how we ended up with long-term fiscal challenges in the first place.
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This is a thorny political problem, and House Speaker Kevin McCarthy (R-Calif.) basically punts on solving it. His proposal promises overall, across-the-board funding cuts without detailing what gets targeted.
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To be sure, the cuts look enormous: Under his plan, most overall nondefense discretionary spending would be slashed by nearly one-third on average in 2024, after adjusting for inflation. The cuts would then expand to roughly 59 percent, on average, by 2033, according to estimates from both the Center on Budget and Policy Priorities and the Center for American Progress.
McCarthy says his plan is similar to the spending caps lawmakers agreed to as part of the Budget Control Act of 2011 — a law that was also passed in response to Republican threats to default on our debt unless “something” was done to reduce deficits. In recent weeks, McCarthy has repeatedly claimed that this 2011 precedent proves President Biden today is being wholly unreasonable in (A) refusing to negotiate over the debt limit in general and (B) refusing to accede to spending caps as the resolution to debt-limit negotiations in particular.
Henry Olsen
counterpointMcCarthy’s debt plan needs an endgame. Here’s what it could look like.
McCarthy is a little bit right and a little bit wrong on this point.
It’s true that Biden spearheaded the negotiations with Republicans during the 2011 debt limit standoff, when he was serving as Barack Obama’s vice president. But if anything, that episode should teach Democrats that repeating the same negotiations and resolutions would be exactly the wrong course of action.
The short-term consequence of the 2011 fight was a downgrading of the nation’s debt, for the first time in history; Standard & Poor’s decided that the U.S. government could no longer be unquestionably relied upon to pay its bills, even if it can afford to pay them.
The longer-term consequences of that episode’s resolution were arguably worse: years of fighting, more hostage-taking, government shutdowns and general chaos.
Lawmakers with national ambitions, such as Sen. Ted Cruz (R-Tex.), learned that they could raise their profile by taking the debt limit hostage on their own. What’s more, it turned out that not committing in advance to specific spending cuts didn’t successfully resolve the question of what to cut. The spending caps merely prolonged the fight over how to address the nation’s fiscal challenges.
Pretty quickly, Republicans gave up on even pretending to abide by the budget constraints they themselves had insisted upon; in 2013, for example, they pulled their own transportation and housing bill because they could not come to an agreement on how to stay within their own funding cap.
In fact, nearly every year throughout the decade that funding caps were in place, Congress voted to exempt itself from the full cap.
The size of the exemption — the amount by which lawmakers gave themselves permission to exceed their previously determined spending caps — began relatively small, and then exploded when Donald Trump took office.
To put all this in context: Those broad, unspecified spending caps from 2011 were much more modest and less severe than the ones McCarthy is proposing now. And yet, Congress still couldn’t execute them.
Whatever qualms I might have with Democrats’ commitment to fiscal discipline, at least they’ve learned a couple of lessons from last time: that giving in to hostage-takers invites more hostage-taking; and that promising to fix deficits, without offering a budget blueprint laying out how, will not actually fix them.
Because they tried the same plan before, in 2011. It didn’t work then, either.
There are plenty of reasons to mistrust Republicans’ position, including that they appear to care about deficits only when a Democrat is in the White House. But let’s assume this time they genuinely want to get the nation’s fiscal house in order. After all, the federal government does face long-term fiscal challenges, partly because of the structure of entitlement programs and demographic trends. A constructive debate on these issues would be worthwhile.
Preferably this debate wouldn’t happen under the threat of blowing up the global financial system, but in some context, sure: Let’s talk about it.
The problem is that Republicans have pledged to reduce debt but have ruled out virtually every mathematical path for doing so. They refuse to raise taxes — but cannot agree on what spending programs to cut, or by how much.
Which is not super surprising: Almost every program is backed by a constituency that would object to its being cut. That’s how we ended up with long-term fiscal challenges in the first place.
Follow Catherine Rampell's opinionsFollow
This is a thorny political problem, and House Speaker Kevin McCarthy (R-Calif.) basically punts on solving it. His proposal promises overall, across-the-board funding cuts without detailing what gets targeted.
Press Enter to skip to end of carousel
To be sure, the cuts look enormous: Under his plan, most overall nondefense discretionary spending would be slashed by nearly one-third on average in 2024, after adjusting for inflation. The cuts would then expand to roughly 59 percent, on average, by 2033, according to estimates from both the Center on Budget and Policy Priorities and the Center for American Progress.
McCarthy says his plan is similar to the spending caps lawmakers agreed to as part of the Budget Control Act of 2011 — a law that was also passed in response to Republican threats to default on our debt unless “something” was done to reduce deficits. In recent weeks, McCarthy has repeatedly claimed that this 2011 precedent proves President Biden today is being wholly unreasonable in (A) refusing to negotiate over the debt limit in general and (B) refusing to accede to spending caps as the resolution to debt-limit negotiations in particular.
Henry Olsen
counterpointMcCarthy’s debt plan needs an endgame. Here’s what it could look like.
McCarthy is a little bit right and a little bit wrong on this point.
It’s true that Biden spearheaded the negotiations with Republicans during the 2011 debt limit standoff, when he was serving as Barack Obama’s vice president. But if anything, that episode should teach Democrats that repeating the same negotiations and resolutions would be exactly the wrong course of action.
The short-term consequence of the 2011 fight was a downgrading of the nation’s debt, for the first time in history; Standard & Poor’s decided that the U.S. government could no longer be unquestionably relied upon to pay its bills, even if it can afford to pay them.
The longer-term consequences of that episode’s resolution were arguably worse: years of fighting, more hostage-taking, government shutdowns and general chaos.
Lawmakers with national ambitions, such as Sen. Ted Cruz (R-Tex.), learned that they could raise their profile by taking the debt limit hostage on their own. What’s more, it turned out that not committing in advance to specific spending cuts didn’t successfully resolve the question of what to cut. The spending caps merely prolonged the fight over how to address the nation’s fiscal challenges.
Pretty quickly, Republicans gave up on even pretending to abide by the budget constraints they themselves had insisted upon; in 2013, for example, they pulled their own transportation and housing bill because they could not come to an agreement on how to stay within their own funding cap.
In fact, nearly every year throughout the decade that funding caps were in place, Congress voted to exempt itself from the full cap.
The size of the exemption — the amount by which lawmakers gave themselves permission to exceed their previously determined spending caps — began relatively small, and then exploded when Donald Trump took office.
To put all this in context: Those broad, unspecified spending caps from 2011 were much more modest and less severe than the ones McCarthy is proposing now. And yet, Congress still couldn’t execute them.
Whatever qualms I might have with Democrats’ commitment to fiscal discipline, at least they’ve learned a couple of lessons from last time: that giving in to hostage-takers invites more hostage-taking; and that promising to fix deficits, without offering a budget blueprint laying out how, will not actually fix them.
