NRCC Now Just Wishing Progressive Debt-Reduction Plans Out Of Existence
The headline of the National Republican Congressional Committee's latest blog post reads, "Democrats Borrow The Future With No Plan For Debt Reduction." The post pretends that President Obama's speech proposing major debt reduction over the next decade never happened, and makes the strange argument that a White House effort to protect the U.S.'s credit rating from Standard & Poor's proves "Democrats have been in full out denial" about the debt. The NRCC apparently wasn't paying attention two weeks ago when the Congressional Progressive Caucus introduced a budget resolution titled "The People's Budget," a mirror image of the Republican scheme to undo the social safety net in order to finance a huge tax cut for the rich. That's just one of four debt-reduction plans offered by Democrats this month. Ironically, by showing more interest in name-calling than in engaging with the ideas Democrats actually put forward, the NRCC's researchers only further the fears that drove S&P to downgrade its expectations for U.S. debt in the first place.
NRCC: Dems Have "No Plan For Debt Reduction"
Congressional Democrats Have Offered THREE Plans For Debt Reduction
The House Voted On Five Budget Resolutions, Three From Democrats, In April. As reported by the Christian Science Monitor:
On Friday, the House voted on five budget plans for fiscal year 2012, each with dramatically different strategies to resolve the nation's fiscal woes. Here are details of those five plans:
- The GOP leadership plan, developed by House Budget Committee chair Paul Ryan (R) of Wisconsin, lowered both individual and corporate tax rates and capped government spending as a percentage of gross domestic product. It also significantly overhauled Medicare and Medicaid, shifting costs to individuals and the states. It passed with no Democrat votes, 235 to 193.
- Democrats on the House budget panel, led by Rep. Chris Van Hollen of Maryland, aimed to bring the budget back toward "primary balance" by fiscal year 2018 by freezing nondefense spending for five years, ending tax breaks to oil and gas industries, and not renewing the Bush-era tax cuts. It failed 166 to 259, with no Republican votes.
- GOP conservatives proposed even deeper cuts in entitlement programs: They'd increase the retirement age for Social Security to 70 and raise the eligibility age for Medicare to 67. It failed 119 to 120, with no Democratic votes. (In a last-minute maneuver, all but 16 Democrats voted "present" - a move that could have allowed the measure to defeat the more moderate Ryan proposal.)
- The Congressional Black Caucus aimed to cut deficits by nearly $3.96 trillion over 10 years, mainly by increasing revenue - ending, specifically, the Bush-era tax cuts on the wealthy. It failed 103 to 303. Seventy-five Democrats voted with all Republicans in opposition.
- The Congressional Progressive Caucus outlined the reduction of deficits by $5.7 trillion over the next 10 years, mostly by increasing taxes by some $4 trillion and cutting defense spending by $2.3 trillion. The measure failed 77 to 347, with 108 Democrats joining all Republicans in opposition. [Christian Science Monitor, 4/18/11, emphasis added]
EPI: Congressional Progressive Caucus's "People's Budget" Ends Federal Deficits By 2021. According to the Economic Policy Institute: "[T]he People's Budget would reduce primary spending by $868.9 billion, increase general revenue by $2.8 trillion, and increase payroll tax receipts by $1.2 trillion over a decade relative to the adjusted CBO baseline. [...] In total, the People's Budget would reduce deficits by $5.6 trillion over 2012-21 relative to the adjusted CBO baseline. The People's Budget is projected to turn from budget deficit to budget surplus in 2021, with a surplus of $30.7 billion ... in that year." [EPI.org, 4/13/11, emphasis added]
The Economist: Overlooked CPC Resolution Would Balance Budget A Decade Sooner Than Republican Plan. From The Economist:
Well, here's a test case. Mr Miller's column notes that "the Congressional Progressive Caucus plan wins the fiscal responsibility derby thus far; it reaches balance by 2021 largely through assorted tax hikes and defense cuts." Which is pretty interesting. Have you ever heard of the Congressional Progressive Caucus budget plan? Neither had I. The caucus's co-chairs, Raul Grijalva of Arizona and Keith Ellison of Minnesota, released it on April 6th. The budget savings come from defence cuts, including immediately withdrawing from Afghanistan and Iraq, which saves $1.6 trillion over the CBO baseline from 2012-2021. The tax hikes include restoring the estate tax, ending the Bush tax cuts, and adding new tax brackets for the extremely rich, running from 45% on income over a million a year to 49% on income over a billion a year.
Mr Ryan's plan adds (by its own claims) $6 trillion to the national debt over the next decade, but promises to balance the budget by sometime in the 2030s by cutting programmes for the poor and the elderly. The Progressive Caucus's plan would (by its own claims) balance the budget by 2021 by cutting defence spending and raising taxes, mainly on rich people. Mr Ryan has been fulsomely praised for his courage. The Progressive Caucus has not. [The Economist, 4/22/11, emphasis added, parentheses original]
Congressional Black Caucus Introduced Budget Resolution To Cut $5.7 Trillion From Projected Debt Levels. As reported by ColorLines: "The Congressional Black Caucus this week continued its tradition of releasing an alternative budget - something the caucus says its done nearly every year since 1981. The CBC Fiscal Year 2012 budget restores some of the cuts to funding proposed by President Barack Obama-particularly the cuts that hurt poor people and people of color. Programs like the heating assistance program, community development grants, and Pell grants would all see their funds returned to current levels. It would also increase funding to the Temporary Assistance for Needy Families Emergency Contingency Fund. Crediting 'tough, responsible decisions,' which include allowing the Bush-era tax cuts to expire, and increasing other tax-based revenue, the CBC claims its budget will save $5.7 trillion on the deficit." [ColorLines.com, 4/14/11]
- Congressional Black Caucus Has One Republican Member, 42 Democrats. The CBC's website lists Rep. Allen West (R-FL) and 42 Democratic U.S. Representatives as members. [House.gov, accessed 4/25/11]
President Obama Has Offered His Own Plan For Debt Reduction
President Obama Announced Plan To Reduce Debt By $4 Trillion Over 12 Years Compared To Current Forecasts. As reported by the Washington Post: "President Obama entered the debate about the national debt on Wednesday after months on the sidelines, offering a plan to trim borrowing by $4 trillion over the next 12 years by combining deep cuts in military and domestic spending with higher taxes on the wealthy. In a stinging rebuke to Republican budget-cutters, Obama acknowledged that the debt must be tackled faster than he has previously proposed, but he rejected GOP calls to make fundamental changes to Medicare and Medicaid and to scale back his initiative to expand health-care coverage to the uninsured." [Washington Post, 4/13/11]
- President's Plan Includes "Debt Fail-Safe Trigger" To Ensure Debt Reduction At Promised Levels. As reported by the Washington Post: "In fact, the president offered his own alternative Wednesday: a 'debt fail-safe trigger' that would cut spending across the board if lawmakers did not approve policies that would set the debt on a downward path by 2014. The trigger should spare Social Security, Medicare and programs for the poor, Obama said, and should raise taxes by cutting dozens of tax breaks that benefit people and corporations." [Washington Post, 4/13/11]
CBPP: "The President's Plan Stands In Sharp Contrast" To GOP Budget Proposal. According to Robert Greenstein, founder of the Center on Budget and Policy Priorities:
The President's plan stands in sharp contrast to the budget plan that House Budget Committee Chairman Paul Ryan unveiled, and his committee approved, last week. Unlike the Ryan plan, the President's plan puts all parts of the budget on the table, including defense and revenues. Unlike the Ryan plan, which the Congressional Budget Office (CBO) has found would increase the costs of providing health care to Medicare beneficiaries, the President's plan contains measures to reduce these costs. CBO estimates that Chairman Ryan's Medicare proposals would substantially raise overall costs per beneficiary. Ryan's plan reduces federal Medicare expenditures only because it dramatically shifts more of these costs on to the backs of beneficiaries, who CBO says would see the amount they pay for health care more than double by 2022 (for people turning 65 in 2022 or subsequent years). In short, Ryan's plan doesn't lower health costs; it shifts them. The President's plan, by contrast, seeks to reduce underlying health costs themselves. [CBPP.org, 4/13/11]
NRCC: White House Lobbying Standard & Poor's To Protect U.S. Credit Outlook Means "Democrats Have Been In Full Out Denial About Their Spending Problem"
"Their Spending Problem"? Even GOP's Budget Would Require Higher Debt Ceiling...
Republican "Path To Prosperity" Budget Would Require Raising Debt Limit By Nearly $9 Trillion Over 10 Years. As reported by The Hill: "Senate Democrats are hammering home the message Friday that House Republicans have already voted for a budget that requires a raising of the nation's debt ceiling, and say the GOP should stop playing games with the debt limit. The House Republican 2012 budget resolution passed April 15 does not balance the budget until about 2040 and will increase the national debt massively - although by much less than President Obama's budget or his new revised budget framework unveiled last week. Under the GOP resolution, the debt limit would have to be raised every year, from $14.3 trillion today to $23 trillion in 2021. This is necessary despite the fact the budget would reduce deficits by $4 trillion over 10 years while cutting nearly $6 trillion in spending." [The Hill, 4/22/11, emphasis added]
...And Ballooning Debt Under Bush Policies Required SEVEN Increases In Debt Ceiling
Congress Raised The Debt Ceiling Seven Times While President Bush Was In Office. Businessweek prepared a graphic showing the past 12 increases in the statutory debt limit, seven of which occurred during President George W. Bush's term in office:
Before Obama Took Office, The FY 2009 Deficit Was Projected At $1.2 Trillion. As reported by the Washington Times: "The Congressional Budget Office announced a projected fiscal 2009 deficit of $1.2 trillion even if Congress doesn't enact any new programs. [...] About the only person who was silent on the deficit projection was Mr. Bush, who took office facing a surplus but who saw spending balloon and the country notch the highest deficits on record." [Washington Times, 1/8/09, emphasis added]
CBPP: Deficit Grew By $3 TRILLION Because Of Policies Passed From 2001 To 2007. According to the Center on Budget and Policy Priorities: "Congressional Budget Office data show that the tax cuts have been the single largest contributor to the reemergence of substantial budget deficits in recent years. Legislation enacted since 2001 added about $3.0 trillion to deficits between 2001 and 2007, with nearly half of this deterioration in the budget due to the tax cuts (about a third was due to increases in security spending, and about a sixth to increases in domestic spending)." [CBPP.org, accessed 1/31/10, parentheses original]
The Bush Tax Cuts Are The Primary Driver Of Federal Budget Deficits Over The Next Decade. Below is a chart from CBPP showing the deficit impacts of war spending, financial recovery spending, the recession itself, and the Bush tax cuts:
Public And Foreign-Held Debt Skyrocketed While Bush Was In Office. Below are two graphs prepared by then-Speaker Pelosi's office showing the increase of publicly and foreign-held debt during the years Bush was in office:
[U.S. Treasury via DemocraticLeader.gov, 6/11/10]
Article NRCC Cites Doesn't Support "Full Out Denial" Claim
Article Cited By NRCC Goes On To Explain That Standard & Poor's Based Its Decision On "Skepticism That The Political Parties Could Come Together" On Debt Reduction. From the Washington Post: "Treasury officials told S&P analysts that they were underestimating the ability of politicians in Washington to fashion a compromise to curb deficits, a Treasury official said. They argued a change in ratings was not needed at this time because the debt was manageable and the administration had a viable plan in the works, the official said. But S&P analysts told Treasury officials on Friday that they were unmoved - and released a report that expressed skepticism that the political parties could come together on how to bring spending in line with revenue." [Washington Post, 4/19/11, emphasis added]
Article Cited By NRCC Goes On To Explain That The White House Fought S&P's Announcement Because It Would Worsen Debt Picture. From the Washington Post: "Any doubts by credit rating agencies about government debt has the potential to increase borrowing costs for the Treasury. It is not uncommon for companies and governments to push back when they don't agree with a decision made by a credit ratings agency. Sometimes, companies that issue debt - which also pay for the ratings - will shop around for the best rating. But the U.S. government is an unusual case - it doesn't solicit ratings. S&P and the other major credit rating agencies offer their judgments notwithstanding." [Washington Post, 4/19/11, emphasis added]
Standard & Poor's Decision To Downgrade Outlook For U.S. Credit Could Make Borrowing More Expensive. From the Washington Post:
The ratings agency Standard & Poor's warned the United States on Monday that it could lose its coveted status as the world's most secure economy if lawmakers don't rein in the nation's nearly $14.3 trillion debt.
The finding, the first of its kind in the 60 years that S&P has been judging the country's credit quality, sent a jolt through the markets and injected a new sense of urgency into the debate gripping Washington over whether to allow the Treasury to keep borrowing. [...]
The AAA rating identifies the United States as one of the world's safest investments - and has helped the nation borrow at extraordinarily cheap rates to finance its government operations, including two wars and an expensive social safety net for retirees.
A downgrade would drive up the cost of borrowing and throw into question the global role of the Treasury bond. The Treasury serves as a crucial risk-free place to invest money - and has been a stalwart of stability amid the economic upheaval of the past few years. [Washington Post, 4/18/11]