Newsfeed

Press Release 

Boehner‘s Debt Ceiling Plan Fails “Cut, Cap, Balance”and Financial-Market Tests, Taxpayer Group Contends

by Pete Sepp / /

(Alexandria, VA) – The 362,000-member National Taxpayers Union (NTU) stated today that HouseSpeaker John Boehner’s (R-OH) two-step plan to raise the debt ceiling not only failsto adhere to the “Cut, Cap, and Balance” strategy House leaders have said theysupport, it may deliver insufficient deficit reduction to prevent a downgradeof America’s credit rating.

“Thelanguage of the plan released last night does not, despite claims to thecontrary, adequately meet the principles laid out by the ‘Cut, Cap, andBalance’ coalition, in which NTU has been a key participant, or the legislationof the same name that has passed the House,” said Andrew Moylan, NTU’s VicePresident of Government Affairs.

AsMoylan noted, the short-term cuts envisioned in the Speaker’s plan amount toonly $6 billion next fiscal year, allowing for $24 billion more spending thanenvisioned in the budget resolution drafted by Representative Paul Ryan (R-WI).This is a far cry from the $111 billion in near-term reductions contained inthe House’s Cut, Cap, and Balance legislation.

Furthermore,the Boehner proposal’s spending cap only applies to “discretionary” (i.e.,non-entitlement) outlays and even then allows budget growth at half the rate ofinflation, rather than limiting expenditures as a percentage of the economy.And while it does not contain any immediate tax increases, the committee itestablishes for the second phase of the plan contains no prohibition on taxhikes and would leave taxpayers vulnerable to such burdens by limiting debateand amendments on the floor.

“Perhapsworst of all,” Moylan continued, “this package does nothing constructive toadvance the cause of passing a Balanced Budget Amendment (BBA) to ourConstitution that would insulate taxpayers from Washington’s recklessness.” Thebill does require a vote on a BBA, but that is something the Speaker couldschedule largely whenever he chooses. Most importantly, the debt ceilingincrease is not contingent upon its passage.

Thewhole purpose of the debt ceiling debate has been to achieve a coursecorrection that will allow the federal government to avoid the economic damageof a downgrade. What should really terrify Members, according to Moylan, is thevery real prospect that even enactment of the Boehner plan, which may prove acareer-ender for lawmakers who promised bolder action, will not be enough tofend off a downgrade in our nation’s credit rating this week. This is yet further evidence that the only plan writtenin legislative text that can pass the House and maintain America’s AAA-ratingis the Cut, Cap, and Balance Act, which has been stymied by Senate MajorityLeader Harry Reid (D-NV).

“HarryReid said he didn’t want to ‘waste time’ on the Cut, Cap, and Balance Act,”Moylan concluded. “It is now clear that the Senate instead is wasting its bestopportunity to solve the debt problem: passing the very same Cut, Cap, andBalance legislation it was too quick in dismissing.”