You didn’t know? That’s not surprising. It’s been tough to keep track of the constantly shifting budget plans over the past few days. Among the competing proposals, you may have heard some politicians calling for a balanced budget constitutional amendment (BBA). It looked like the House would vote this week on the radical BBA approved by the House Judiciary Committee, H.J. Res. 1 – until House leadership announced suddenly last Friday that they would instead be voting on the “Cut, Cap, and Balance Act” (H.R. 2560). And the House GOP leadership has carefully avoided talking about what the bill would do to programs and services critical to women and their families. So – before the expected House vote on H.R. 2560 late this afternoon – here’s the real story.
The Cut, Cap and Balance Act combines immediate cuts to vital programs, a global spending cap, and an extreme balanced budget amendment in one bill. In fact, the bill requires that Congress pass H.J. Res. 1 (or a similar BBA, like S.J. Res. 10 or S.J. Res. 23 in the Senate) as a condition to any debt limit increase. You read that right – under H.R. 2560, before Congress can act to ensure that the U.S. can pay its bills and avoid a catastrophic default after August 2, it must pass an extreme BBA that includes a cap on spending, a requirement of a two-thirds vote in both Houses to raise taxes, and a requirement that federal spending and revenues match each year. H.J. Res. 1, for example, caps federal spending at 18 percent of GDP; such a cap would force even deeper cuts to Medicare, Medicaid, and Social Security than the Ryan budget, which would not reduce spending to 18 percent of GDP until around 2040. Any amendment requiring that spending each year be matched by revenues raised that year would prevent Social Security from using its Trust Fund reserves to continue paying full benefits for the next 25 years, as it could otherwise do. And requiring a two-thirds vote to raise taxes would protect tax breaks for millionaires and corporations while making it far more difficult to actually bring the budget into balance.
But wait, there’s more! A BBA likely would not go into effect until around FY 2018. H.R. 2560, however, would ensure swift and steep cuts to programs beginning just next year. The bill would cut $111 billion in FY 2012 alone, forcing program cuts at least as severe as those in the House-passed Ryan budget – and causing more pain for struggling families and more job losses for women in an already fragile recovery.
H.R. 2560 sets increasingly restrictive annual spending caps over the next decade, which would be enforced by automatic across-the-board cuts. While previous deficit reduction laws exempted safety net programs for low-income people from automatic enforcement mechanisms, H.R. 2560 would subject Medicaid, child care, Head Start, Food Stamps, and Pell Grants – as well as food safety, medical research, environmental protection, and much more – to devastating cuts. At the same time, the bill would protect the defense budget and tax breaks for millionaires and billionaires. Under H.R. 2560, savings from cutting wasteful defense spending or closing tax loopholes could not mitigate the scheduled spending cuts.
Like the balanced budget amendment, the title of the “Cut, Cap and Balance Act” suggests a reasonable – and, of course, balanced – approach to addressing the federal deficit. But a closer look reveals a one-sided, unfair and fiscally irresponsible plan that would risk a renewed economic crisis and devastate Medicare, Medicaid, Social Security, and other vital programs, while moving to protect tax breaks for billionaires and corporations in the Constitution.
President Obama has made clear that he will veto H.R. 2560 if it winds up on his desk. That’s good – but I sincerely hope there are enough reasonable and responsible lawmakers in the House to reject this disastrous bill out of hand.