"Cut, cap and balance" will come to the House floor this week. And no, that's not a reality show for athletic hairdressers!
During the week of July 18, debt limit and deficit reduction talks between the White House and Congress will resume, and at least one major economic bill will come to the House floor. The President has offered a menu of options to Republicans in hopes of making a deal before August 2, when the Treasury Secretary says the U.S. will begin to default on some obligations. The President is still pushing for a big deficit reduction deal of up to $4 trillion, that would include spending cuts, cuts to entitlement programs and tax increases, but has also offered two other potential deals: a $2 trillion deal that would require smaller compromises from the two sides; and a much smaller short-term deal including enough spending cuts to offset a modest increase in the debt limit. The smaller deal is offered in the context of Senator Mitch McConnell's "Plan B" proposal (see July 13 entry below), which would require the President to offer binding spending cuts in return for raising the debt limit, but does not specify which programs would be cut. "Plan B" is looking more likely, with new talks on a larger deficit reduction deal to follow. There isn't a text yet that we can link to, and the written proposal will probably only appear when it’s introduced as legislation.
The House Republican leadership has announced that it will bring to the floor a "cut, cap, and balance" bill (see blog entry below from June 30). The proposal would cut total spending by $111 billion in FY 2012 by (1) reducing non-security discretionary spending by $76 billion (that's where cuts to scientific research would fall); (2) reducing "non-veterans, non-Medicare, non-Social Security" mandatory spending by $35 billion; and (3) keeping defense spending at the president’s requested level. The cap on federal spending would be on a sliding scale, starting at 22.5 percent of GDP in FY 2012 and getting progressively tighter to 19.1 percent in FY 2021. (Federal spending in Fiscal Year 2010 was 24% of GDP so that gives you an idea how draconian these spending limits are.) The balance requires passage of a Balanced Budget Amendment to the Constitution before raising the nation’s debt limit. The proposal does not address revenue. And right on cue, the leadership may also bring to the floor House Joint Resolution 1, a Balanced Budget Amendment to the Constitution. Because both of these proposals rely on deep spending cuts to research and services to bring the federal budget into balance, APA will oppose them. Both measures will likely pass in the House but stall in the Senate.