Counting down toward ‘Debtmageddon:’ We’ve got your good, your bad and your ugly.
BAD: What a rough week the Speaker of the House has had. First, the Congressional Budget Office (CBO) scored his debt limit and deficit reduction bill and determined the budget cuts it contained for the first year were in fact much smaller than advertised, so the bill had to be rewritten. Then on Thursday July 28, he scheduled a vote on the bill (The Budget Control Act of 2011, S. 627), and then had to pull it from the floor because he didn’t have the needed 217 votes to pass it. The vote has been rescheduled for later today, July 29, and it looks more likely that the bill will pass. Why? To attract a few more votes, an additional amendment is being added to make future borrowing authority contingent on Congress’s clearing a balanced budget constitutional amendment. The earlier version only required that vote be scheduled on a balanced budget amendment. This seems an unlikely way to move toward a bipartisan compromise, but we’ll play along.
So far the Senate and the President agree that there should only be one vote on raising the $14.3 trillion debt limit. S. 627 only provides enough headroom to allow government borrowing to continue until around Christmas of 2011, necessitating another scramble like the one we’re experiencing but with the added bonus of holiday cheer. Still, in order for an agreement to become law, SOMETHING has to pass in the House. The Speaker’s bad week is rolling into a bad weekend. Might he have won the battle only to lose the war? If getting to this agreement was hard, wait till he is pushing a compromise version. The Senate is not a potted plant, Mr. Speaker!
UGLY: What’s so bad about a balanced budget amendment to the Constitution? It depends on how it’s written. Two different bills are likely to come to the House floor later today. H. J. Res. 1, sponsored by Rep. Bill Goodlatte (R-VA) has 133 House cosponsors. It would, for the first time, write an arbitrary cap on federal spending into the U.S. Constitution. H.J. Res. 1 would force significant cuts in mandatory and discretionary federal programs, and scientific research programs would likely not be spared. At the same time, by requiring a supermajority vote (3/5) to raise taxes, the amendment would make it nearly impossible for Congress to raise revenues or amend the tax code even in a revenue-neutral way. H.J. Res. 1 would limit annual federal spending to 20 percent of the prior year’s gross domestic product (GDP). Federal spending averaged 22 percent of GDP during Ronald Reagan’s presidency (30 years ago!), a time when the U.S. was not fighting two wars and a bolus of baby boomers was not reaching retirement age. Under H.J. Res. 1, a two-thirds vote of all members in both houses would be necessary to approve spending above the cap in any fiscal year, making it more difficult for the government to respond quickly to economic downturns.
The second balanced budget amendment that will come before the House today, H.J.Res. 2, lacks the spending cap and supermajority provisions. It would require a balanced federal budget each year. It also requires 3/5 of the whole membership of both houses in order to raise the debt limit. 211 Republicans have cosponsored H.J.Res.2, and it is likely some moderate Democrats will support it.
GOOD: Yes, what a great story on the psychology of the debt crisis on “Morning Edition” on National Public Radio today from Shankar Vedantam. Mr. Vedantam has spoken at APA’s Science Leadership Conference and is the winner of an APA Presidential Citation for his insightful reporting, applying psychological research findings to current issues and problems.
All in all, looks like an exciting weekend ahead.