Senate Kills Cut, Cap, and Balance – Gang of Six is Still NOT the Answer
July 22, 2011
On Tuesday July 19, the House of Representatives passed H.R. 2560, the Cut, Cap, & Balance Act of 2011 (click here, here, and here to read previous posts on CCB). On Friday, the Senate cut off debate on its version of cut, cap and balance, effectively killing the legislation. If it had been passed by the Senate and signed by the President, the legislation would have forced Congress and the President to cut spending, cap spending and pass a Balanced Budget Amendment.
On the same day that the vote on H.R. 2560 took place, the Senate’s Gang of Six proposal was released. Named after the three Republican senators; Tom Coburn (Okla.), Saxby Chambliss (Georgia), and Michael Crapo (Idaho) and three Democratic senators; Kent Conrad (N.D.); Dick Durbin (Illinois) and Mark Warner (Virginia), the Gang of 6 plan is supposed to be THE bi-partisan answer to raising the debt ceiling and addressing future deficits and debt. In reality, the plan contains massive tax increases.
Named after the three Republican senators; Tom Coburn (Okla.), Saxby Chambliss (Georgia), and Michael Crapo (Idaho) and three Democratic senators; Kent Conrad (N.D.); Dick Durbin (Illinois) and Mark Warner (Virginia), the Gang of 6 plan is supposed to be THE bi-partisan answer to raising the debt ceiling and addressing future deficits and debt. In reality, the plan contains massive tax increases.
Here is a quick roundup of what others have said about the Gang of Six:
From Rep. Jim Jordan (R-Ohio) in USA Today:
“After months of secret discussions, a group of senators known as the Gang of Six finally released their plan for the debt crisis this week. Some consider it generous to call it a “plan” when, in truth, the document is little more than a set of talking points. Still, a close look at the details reveals a very bad deal in the works. In short, it asks Americans to shoulder a $2 trillion tax increase now in exchange for a promise by Congress to cut spending later.”
From Keith Hennessey, Research Fellow at the Hoover Institution at Stanford University (read full post here):
“The Gang of Six plan is designed in three legislative parts. Part 1 is “a $500 B down payment” that would presumably be implemented quickly/immediately through a bill. Part 2 contains the bulk of the plan’s deficit reduction, and would require enactment of at least two more pieces of legislation, a budget resolution followed by a reconciliation bill. Part 3 is a process for considering Social Security legislation that would, if successful, be combined with the reconciliation bill from Part 2 after both had passed the Senate.”
From Andrew Moylan, Vice President of Government Affairs for the National Taxpayers Union (read full post here):
“Overall, the plan promises to provide $1.5 trillion in tax relief relative to the CBO March baseline. But this is nothing more than a dishonest budgetary trick designed to hide the real impact on taxpayers. ‘The CBO baseline assumes the expiration of tax relief, resulting in a $3.5 trillion revenue increase. As a result, the plan appears to include a $2 trillion revenue increase relative to a current policy baseline,’ says the House Budget Committee in their analysis of the proposal. ‘If the $800 billion in tax increases from the new health care law are included, the plan appears to increase revenues by $2.8 trillion, without addressing unsustainable health care spending that is driving our debt problems.’”
On June 21, the Congressional Budget Office (CBO) issued it’s “CBO’s 2011 Long-Term Budget Outlook,” and reminded us why this debate is so critical. According to CBO, “With significantly lower revenues and higher outlays, debt held by the public would exceed 100 percent of GDP by 2021. After that, the growing imbalance between revenues and spending, combined with spiraling interest payments, would swiftly push debt to higher and higher levels. Debt as a share of GDP would exceed its historical peak of 109 percent by 2023 and would approach 190 percent in 2035.”
The Gang of Six proposal is just a diversion from Cut, Cap, and Balance and anything less is just window dressing. The real problem in Washington, D.C. is over spending, not under taxation.