Republican Cut, Cap, Balance Plan Exempts Medicare, Social Security, War on Terror From Spending Limits


At the end of last week, House Republicans offered up yet another debt-limit deal in the form of a bill dubbed "Cut, Cap, and Balance." In theory, it allows the debt ceiling to be raised while preventing future deficit fiascoes by simultaneously requiring Congress to pass a constitutional amendment mandating a balanced budget and yearly spending caps set to predetermined percentages of total GDP: Under the proposal, spending would be limited to 21.7 percent of GDP in 2013 and ratcheted down to 19.9 percent of total economic output by 2019.

But Republicans have also exempted a number of their own priorities, including some of the biggest long-term debt drivers, from the proposed spending limits. As The Hill reports, "There is an exception for operations related to the global war on terrorism of $126 billion." So are two of the biggest entitlements: Page five of the legislation lists exemptions exemptions for Social Security and Medicare, as well as military retirement, veterans health care, and interest on the debt.

Lots of conservatives back the plan, and balanced budget requirements typically poll well across the political spectrum. But a spending cap that quietly exempts Medicare, Social Security, military health care (which has also been beset by exploding costs in recent years) seems awful convenient, and unlikely to be all that effective in the long run.

No matter what, its prospects for passage are minimal: House Speaker John Boehner seems interested in the bill only as a way to placate conservatives: At a Friday news conference, he didn't exactly offer a full-throated defense of the bill. "The cut, cap and balance plan that the House will vote on next week is a solid plan for moving forward. Let's get through that vote, and then we'll make decisions about what will come after," he said, according to The Huffington Post

Meanwhile, there are still political and procedural hurdles: Democrats don't like it, so there's little chance it would pass in the Senate. And even in the unlikely event that the legislation made it all the way through Washington, amending the constitution would still require ratification by two thirds of state legislatures.