Cut, Cap, and Balance

"No more."
--Rick Latimer (The Principal)

Earlier this week the House passed H.R. 2560, better known as the 'Cut, Cap, and Balance Act.' The bill has three primary components. One is to cut about $100 billion from the FY 2012 budget as proposed by the Obama Administration. The $100 billion comes about 75% from the hide of what is commonly termed 'discretionary' spending and 25% from 'mandatory' spending (oh that Washington terminology).

Secondly, the bill caps annual spending as a percentage of GDP. In FY 2012 the cap is 22.5% and over the next 10 years it whittles down to 19.9% (apparently politicians have learned the magic of .99 pricing).

Finally, the bill requires passage of a balanced budget amendment (presumably thru Congress but ratified by the states) prior to permitting an increase in the debt ceiling.

From where I sit this bill is inadequate. Cut: A FY 2012 spending cut of $100 billion is rounding error on a $3.5 trillion budget. Cap: Why cap spending at 20% of GDP instead of working to reduce it over time? Balance: While attractive on the surface, a balanced budget amendment may not pass, nor will it necessarily bind future Congresses from tax increases.

I note that Ron Paul voted thumbs down, consistent with his policy of no deals, no compromise.

The bottom line is that this bill still empowers the spending and debt addiction. The right thing to do is to vote 'no' on raising the debt ceiling.