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The Talk: The Cut, Cap and Balance Gang
July 22, 2012
Chip Lebovitz: Welcome back from Costa Rica Ross, have you kept up with the tangled mess that is the debt ceiling debate?
Ross Freiman-Mendel: Good to be back Chip: the venue changed, but it’s all a jungle. The debt ceiling is a truly global issue. I don’t support an increase, but since that view is unacceptable to reasonable people, I support Cut, Cap and Balance.
Chip Lebovitz: While I’m sure the foreign policy implications of a failure to raise the debt ceiling are ominous, the Cut, Cap and Balance Act (CCB) going through Congress is equally portentous. CCB is a radical attempt to balance the budget on the backs of entitlements like Medicare and Social Security and would cap discretionary spending at 18% of the previous years’ GDP. The last time the U.S spent that little on discretionary spending was in the 1960’s, and I think that this Center for American Progress info-graphic shows that times have been a-changin’ quite significantly since then.
Ross Freiman-Mendel: You’re characterizing radical change as if it’s a devastating consequence, rather than a necessary one. To me it’s a simple logic issue: this government has consistently demonstrated its profound ability to live outside of its means, evidenced by the previous 74 times the ceiling has been raised since 1962. Congress is kicking the can hard — this time it obstinately is going nowhere down the road. What would you have Congress do?
Chip Lebovitz: Change is absolutely necessary; however, unlike the supporters of CCB, when the unemployment rate is above 9 percent, I would prefer my deficit reduction plan not cost the American economy 700,000 jobs next fiscal year alone. Let’s focus on a large-scale plan with at least some hints of bipartisan appeal like the Gang of Six’s newly released $3.7 trillion option.
Ross Freiman-Mendel: Yes Chip, we’re all familiar with the success of trillions in “stimulus:” I’m a particular fan of those soothsayers who predicted the job situation had we not acted. But to your point, I don’t support the Gang of Six’s plan, which at this point is a 5-page outline. Should we really allow Max Baucus to write more law?
Chip Lebovitz: The Gang of Six’s plan is a 5-page outline at this moment –- the actual legislation will be longer and more detailed. It’s a bit of schadenfreude that you would immediately beeline to the superficial details of the plan. Two popular recent conservative rallying cries have been in favor of shorter bills (Herman Cain and the three page-bill plan) and against longer ones (Obamacare). The Gang of Six’s plan isn’t perfect, but I absolutely support a plan that can stabilize the nation’s public debt by 2014 without shredding entitlements and non-defense discretionary spending.
Ross Freiman-Mendel: Short is good when discussing the 2700-page health care bill that added a new entitlement without review by a single Congressman. However, the lack of detail affords Senate committee chairman too much discretion in crafting the actual law. Unfortunately the Gang of Six’s plan is a $3 trillion-tax hike, if you consider the projections used. Has it ever occurred to you why the President so willingly embraced the plan?
Chip Lebovitz: Thiessen’s logic in that article is a bit skewed. Letting the Bush tax cuts expire, the meat of Thiessen’s “tax hike,” isn’t even a tax increase according to anti-tax berserker Grover Norquist, head of Americans for Tax Reform and purveyor of a no tax increase pledge that is sacrosanct among Republicans. The only valid point Thiessen even makes isn’t even on taxes – it’s about authorizing individual Senate committees to make cuts under a relatively broad framework. I agree that we have no clue what the committees will cut, but that’s just a small but manageable flaw in the Gang of Six’s proposal.
Ross Freiman-Mendel: “We have no idea” is more than just a “flaw.” Do you honestly believe a vague 5-page outline can deliver a definitive solution? According to former acting CBO director Donald Marron, the plan raises $2 trillion in revenues under the status quo — rather than predict the future, let’s deal with reality.
Chip Lebovitz: Now your arguments are verging on circuitous, but to put it a different way, there is a reason that the president is willing to support a short-term increase if it is paired with a grander plan. Passing a short-term increase allows the Senate more time to transform the 5-page outline to a full fleshed out bill. Let’s look toward the positives of this plan. The fact is that it actually does deal with reality, stabilizing our debt in the most realistically passable fashion by cutting $3.7 trillion for the deficit and roughly $2.2 trillion in spending.
Ross Freiman-Mendel: Chip, the President has consistently called for tax increases, and that’s why he supports this plan. Respectfully, the actual product does nothing to stabilize the debt, because, as Jack Kenny of The New American explains, the Gang of Six’s plan is more a wish list that calls on committees to find savings rather than actually produce them.
Chip Lebovitz: The Gang of Six’s plan may currently lack detail but the President supports this plan because it’s the most promising one on the table that could be passed and do something about the deficit. The proper path forward on the deficit must mix spending cuts and revenue increases.
Ross Freiman-Mendel: I’m sure my fellow conservatives in the House would agree — “must” is such a strong word. Washington has a spending problem, and we ought to starve the beast.
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