Caps and triggers and talks … oh my

The bipartisan debt-reduction talks led by Vice President Biden continued yesterday, with two hours of discussions on Capitol Hill. By all accounts, there’s been at least some steady progress. Rep. James Clyburn (D-S.C.), the assistant Democratic leader, said yesterday, “We’re getting there.”

That’s good to hear, I suppose, but as the talks turn to “structural” ideas, it’s critically important Democrats realize that spending caps would be nothing short of devastating.

Wednesday’s meeting centered on deficit reduction caps and triggers, Rep. Chris Van Hollen (D-Md.) told reporters. Republicans want caps that are tied exclusively to spending as a percentage of the gross domestic product, while Democrats are pushing to link any caps to the broader goal of deficit reduction, in which both spending cuts and tax increases could be used to rein in future deficits.

Van Hollen said the negotiators “had a useful discussion about different perspectives, and we’re going to continue to work on it.”

He said that while there was broad support for some form of a cap or trigger, differences remained. “We did not get them resolved,” he said.

You don’t say.

When it comes to lines in the sand, we’ve heard leaders from both parties highlight some deal-breakers. Republicans, of course, have said tax increases will never be acceptable (but increased revenue remains a possibility). Democrats have ruled out any cuts to Medicare benefits (though Dems are open to savings elsewhere in the program).

But when it comes to structural changes, Dems have to realize that rigid, arbitrary spending caps have to be off the table, too. It’s been a while since we talked about this, but the kind of caps Republicans are eyeing would impose insane, statutory spending restrictions on Congress, with the goal of automatically slashing public investments in practically everything. It is, without a doubt, one of the worst ideas in recent memory.

The Center on Budget and Policy Priorities’ Paul Van de Water recently explained to the Senate Finance Committee, “Imposing an arbitrary limit on federal spending would risk tipping faltering economies into recession, make recessions deeper, and make recovery from a recession more difficult.”

Heather McGhee also did a nice job summarizing the case against the CAP Act, calling it what it is: “a depression maker.”

And if programs like Medicare remain a top priority, the GOP’s proposed caps would necessarily lead to deep cuts to the health care program, as well as Medicaid, Social Security, and every other domestic priority.

It appears that Dems realize this, but party leaders must recognize this as a deal-breaker.