MANCHIN KNOWS NOT OF WHAT HE SPEAKS…. Sen. Joe Manchin (D-W.Va.), after about six months on the job, has struggled at times, occasionally badly. But on fiscal issues, the center-right Democrat appears to be getting worse.
Today, Machin will formally endorse a Republican proposal for strict new spending caps, saying it would be “irresponsible” not to. He joins the Senate GOP, independent Sen. Joe Lieberman (Conn.), and Democratic Sen. Claire McCaskill (Mo.), which suggests the measure, generally known as the CAP Act, now has the support of a Senate majority, or at least close to it. There’s even some talk it will be included as part of a “compromise” on the debt ceiling.
To date, the proposal hasn’t gotten much attention, but it’s important to understand how dangerous this is. Ezra Klein, who’s arguably even more cautious in his rhetoric than I am, recently described the spending cap idea as “completely insane.”
Spending caps are bad policy, and the McCaskill-Corker spending cap — which holds spending to 21.5 percent of GDP, or three percentage points lower than it is right now — is a badly designed spending cap. But beyond all that, it’s laughable to posit it as a compromise: It’s arguably the most radically conservative reform that could be made to the federal budget. More extreme, by far, than Paul Ryan’s plan.
Start with the shell game at the core of this discussion: We’re worried about the debt ceiling but talking about a spending cap. This works just fine if you hew to the conservative conceit that “we have a spending problem, not a taxing problem.” But that applause line is just an effort to deny the contribution tax cuts have made to the deficit and keep tax increases from being part of a solution. If you think we have a debt problem — and that’s what being upset about raising the debt ceiling implies — then do something about the debt. The “trigger” proposal the White House included in is budget, for instance, is tied to the debt, not to spending or taxes.
Of course, to the Republicans, that’s a feature, not a bug. The virtue of a spending cap is that by focusing on only one contributor to debt, it admits only one solution to it: spending cuts. Savage ones. The Corker-McCaskill proposal is so aggressive that there are years when even Paul Ryan’s budget, with all its fantastical assumptions and hard caps, wouldn’t qualify. “You put McCaskill-Corker into law,” says Bob Greenstein, president of the Center on Budget and Policy Priorities, “and progressive policy is dead for the next quarter-century.”
That’s not an exaggeration. The CBPP published a detailed report on the proposed cap a couple of weeks ago, explaining that if it were to become law, policymakers would have no choice but to enforce devastating cuts in Medicare, Medicaid, and Social Security, as well as every other domestic priority.
Ironically, Machin, whose depth of understanding on these issues appears to be less than an inch deep, said he supports the CAP Act but opposes cuts to Social Security and Medicare. In other words, Machin doesn’t understand the effects of the very policy he’s endorsing.
To a very real extent, the cap would be a straightjacket intended to prevent the government from responding to any challenges, foreign or domestic, for the foreseeable future. The “solution” doesn’t even match the problem — any credible evaluation of the fiscal issue shows the same truths: we lack the necessary resources to deal with a growing elderly population and escalating health care costs. How would a spending cap help this? It wouldn’t.
As Ezra added, “Health-care costs are rising far in excess of GDP growth, and a spending cap does nothing to stop them. Seniors will go from 13 percent of the population now to 20 percent of the population in 2035, which means America will temporarily have fewer people working and more people dependent on government support. But the spending cap does nothing to reverse the aging process. And amid all these trends driving up spending, Republicans are pushing to make the Bush tax cuts permanent and Democrats are pushing to make most of the Bush tax cuts permanent. A spending cap does nothing about that, either. A spending cap is an effort to deny our real problems, not to fix them.”