Pick Your Poison: 'Gang of Six' Framework or the McConnell Plan?

Guy Benson

7/20/2011 8:40:00 AM - Guy Benson

As Katie noted last night, the Republican-held House passed 'Cut, Cap, and Balance,' mostly along partly lines.  If implemented, the measure would slash trillions from the rate of spending growth -- including over $100 Billion in cuts next year -- cap federal spending at 20 percent of GDP, and require Congress to pass a Balanced Budget Amendment.  It is expected to die in the Senate.  And even if by some fluke it managed to squeak through the Senate (after all, 20 Democrats have gone on the record in favor of a BBA in the past), President Obama would be waiting at the other end of Pennsylvania Avenue with his veto pen.  Also, it's all but inconceivable that this Congress would pass any BBA, let alone an acceptable one, by the 2/3 majority required to send the amendment to the states. 

Another GOP-led attempt to address the debt, another dead end.  The House deserves credit for trying, and for again puncturing the Democrat-media complex's myth that Republicans' position is to do nothing.  The president has that market pretty well cornered, after all.  So practically speaking, where do we go from here?  I'll try to wrap my brain around that question in a moment (brace yourselves for a decidedly unpleasant thought experiment).  First, though, I'll point out that perhaps it isn't the end of the world that CCB won't advance much further.  I linked to two pieces in a previous post, but they're worth a second go-'round now that the legislation has sailed through the House and into a brick wall.  The Wall Street Journal editorial board and National Review editor Rich Lowry argue against a Balanced Budget Amendment to the Constitution, suggesting it could be dangerous business.  Why?  Because it could be twisted and perverted to achieve the opposite of its supporters' intentions.  The Journal summarizes:
 

The newest versions of the BBA include a strong provision requiring a two-thirds supermajority vote to increase taxes. That said, we doubt the historic 1981 Reagan tax cuts within the Kemp-Roth bill, once subjected to Congress's revenue-neutrality accountants, could have survived the balanced budget mandate. Even with deficits, the U.S. grew strongly for seven years, adding to GDP as much as the entire West German economy.

Nor is it clear that the amendment could avoid unintended consequences. In the current fight over spending and the debt, the GOP Congressional leadership has worked well to protect the defense budget from a President who constantly cites the need to cut it. But under a mandated need to balance spending, the inevitable horse-trading would likely default to cutting defense while ducking fights on domestic programs.
 

Any hypothetical watered-down, Democrat-approved BBA would assuredly be maleable enough to allow for "revenue enhancements" to balance the budget.  If you think for a second that Democrats wouldn't exploit a built-in Consitutional requirement to raise taxes, you're dreaming.  Also, the BBA's war-time exception clauses could be used to defang the spirit of the entire effort.  Lowry explains:


The Republican amendment acknowledges there are circumstances when the budget shouldn’t necessarily be balanced. It allows for a waiver in fiscal years in which a declaration of war against a nation-state is in effect. We haven’t declared war on anyone since World War II.

...Another provision allows three-fifths of Congress to waive the amendment for expenditures related to a military conflict “that causes an imminent and serious threat to national security.” If you believe the Cold War or the War on Terror qualifies, this could have led to constant exceptions from 1947 to 1991, and from 2001 to perhaps the present.


In the end, these criticisms -- although valid -- are academic.  The Party of No Democrats have made clear that they're opposed to any form of CCB.  So for now, we're looking at the McConnell plan -- with its evolving elements, attributes, and significant flaws -- or the Gang of Six compromise, which is gaining steam in the Senate, despite its glaring red flags and troubling lack of detail. 

Parting thought:  Republicans control just one-half of one-third of the federal government, and the August 2 debt deadline is inching ever closer.  Therefore -- presuming Republicans view a default as truly unacceptable, as they should -- there's a good possibility that the GOP will have no choice but to settle for some form of either the McConnell contingency or the Gang of Six framework.   Break out your scorecard.  Stiff upper lip, now:


McConnell - Doesn't really address spending in any meaningful way, punts on entitlements, avoids any form of tax increase, and forces Democrats to own three debt hikes before the 2012 election.  Oh, and the debt ceiling gets raised.

'Gang' - Presumably makes singificant (yet undetermined) cuts, punts on entitlements, will likely amount to an effective tax burden increase, and strikes a bipartisan accord that will (a) create the false impression that our problems are solved, and (b) assist President Obama in papering over his disgraceful lack of leadership on these issues and play a faux "moderate" heading into 2012.  Oh, and the debt ceiling gets raised.


Question: Which of those two options is least acceptable to you?  Forget your ideal scenario -- it might soon be time to identify your worst nightmare, and push hard for the less unappealing alternative.  Pick your poison.  Either that, or explain to me how Republicans achieve at measurably better result at this point.  Divided government isn't much fun at all, but as we learned from 2009-2011, united government in the wrong hands can be far worse.


UPDATE - Some readers have suggested that the House could still pass a short-term debt limit hike with corresponding cuts (either with no tax language at all, or with an off-setting rate reduction/loophole closing element), and force the Senate and/or the president to kill it.  That may be feasible, but the clock is ticking.  Republicans made a decision to push CCB, and now they have to see it through.  Mitch McConnell will likely force a Senate vote on it this week.  Once it fails, the GOP will have even less time to execute a plan B -- particularly with the 'Gang of Six' sucking up all the oxygen on the Hill.  The other potential problem with this idea?  The credit agencies are now saying that they may still downgrade US credit if a large (read: about $4 Trillion), bipartisan deal isn't reached.