The second worst idea in Washington
There’s talk that the McCaskill-Corker spending cap will be the cost of raising the debt ceiling. This would be, to put it simply, completely insane. Spending caps are bad policy, and the McCaskill-Corker spending cap — which holds spending to 21.5 percent of GDP, or three percentage points lower than it is right now — is a badly designed spending cap. But beyond all that, it’s laughable to posit it as a compromise: It’s arguably the most radically conservative reform that could be made to the federal budget. More extreme, by far, than Paul Ryan’s plan.
Start with the shell game at the core of this discussion: We’re worried about the debt ceiling but talking about a spending cap. This works just fine if you hew to the conservative conceit that “we have a spending problem, not a taxing problem.” But that applause line is just an effort to deny the contribution tax cuts have made to the deficit and keep tax increases from being part of a solution. If you think we have a debt problem — and that’s what being upset about raising the debt ceiling implies — then do something about the debt. The “trigger” proposal the White House included in is budget, for instance, is tied to the debt, not to spending or taxes.
Of course, to the Republicans, that’s a feature, not a bug. The virtue of a spending cap is that by focusing on only one contributor to debt, it admits only one solution to it: spending cuts. Savage ones. The Corker-McCaskill proposal is so aggressive that there are years when even Paul Ryan’s budget, with all its fantastical assumptions and hard caps, wouldn’t qualify. “You put McCaskill-Corker into law,” says Bob Greenstein, president of the Center on Budget and Policy Priorities, “and progressive policy is dead for the next quarter-century.”
It’s easy to understand why Republicans would embrace legislation making their favored solutions the only possible solutions. What’s less clear is why McCaskill, or even Joe Lieberman, would do the same. McCaskill and Lieberman, for instance, both voted for the health-care law and consider themselves broadly in favor of the continued existence of Medicare, Social Security and the United States military. It is impossible for all of those things to exist, for the baby boomers to retire and for health-care technology to continue advancing and for spending to fall to less than 22 percent of GDP.
Saying “America has a spending problem” is saying “I don’t understand the budget and don’t want to learn anything further about it.” We have a health-care costs problem, an aging problem and a taxing problem. But a spending cap has nothing to say about any of these problems. Health-care costs are rising far in excess of GDP growth, and a spending cap does nothing to stop them. Seniors will go from 13 percent of the population now to 20 percent of the population in 2035, which means America will temporarily have fewer people working and more people dependent on government support. But the spending cap does nothing to reverse the aging process. And amid all these trends driving up spending, Republicans are pushing to make the Bush tax cuts permanent and Democrats are pushing to make most of the Bush tax cuts permanent. A spending cap does nothing about that, either. A spending cap is an effort to deny our real problems, not to fix them. It allows politicians to sound tough and solutions-oriented without forcing them to actually develop any solutions.
I requested an interview with McCaskill to ask her some of these questions, but her staff never responded. My hunch is that she’s facing a tough race in 2012 and signed onto this legislation under the theory that it (a) wouldn’t pass and (b) would make her sound fiscally responsible. But the legislation is terrifically irresponsible, could become a dangerous flashpoint as part of the debt ceiling debate and would destroy much that she holds dear if it somehow did pass. This isn’t the Worst Idea in Washington, but it’s close.