Debt Crisis: Republican Senators Announce "Cut, Cap, and Balance Act" as Solution to Debt Crisis Debate
July 7, 2011
Diane W. Collins
dcollins@marketingweb.com
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Sen. Mike Lee (R-UT) introduces "Cut, Cap and Balance Act" |
This afternoon during a press conference in Washington, DC a group of Republican senators announced they were introducing and filing a piece of legislation today called the "Cut, Cap, and Balance Act."
The bill has 21 cosponsors including Sens. Barrasso, Blunt, Bozeman, Coburn Corker, DeMint, Graham, Hatch, Issacson, Johnson, Lee, Paul, Portman, Roberts, Rubio, Sessions, Thune, Toomey, Vitter and Wicker. (As of this time, Sen. McConnell has not formally endorsed the bill.)
According to Sen. Lee (R-UT), the proposal would raise the debt limit by $2.4T conditioned upon the occurrence of three significant events. The events include immediate cuts; statutory caps; and a balanced budget amendment passed by congress and submitted to the states for ratification. The cuts and caps in the bill mirror Sen. Toomey's recent legislation. The balanced budget amendment to the Constitution would be based on SJ 10. This was previously supported by all Republican senators though it failed to pass the Senate.
Sen. Lee went on to state the need for the "Cut, Cap, and Balance Act" comes from the fact that a future congress cannot be bound by a statute. In other words, a promise to cut $3-$4B right now as down payment on the debt increase could be illusory. (It's like Wimpy in the Popeye cartoon telling you he'd gladly pay you tomorrow for a hamburger today.) The promise needs teeth. The solution is the balanced budget amendment. Lee said he expects more cosponsors in the next few days and believes the bill is a debt crisis solution that could find support in both political parties and houses of congress.
Regarding potential default, Sen. Toomey remarked that not raising the debt ceiling by August 2nd would not cause default. The federal government has plenty of cash flow to meet the interest payments... "But, it would be highly disruptive by producing a partial government shutdown." Avoiding that shutdown is the reason Toomey is willing to support the bill. However, he repeated that in order to make the substantial increase in the debt limit possible, it must be contingent upon the restrictions outlined in the Cut, Cap and Balance Act.
The elements of the legislation have had broad support within the Republican Conference and among the general public. According to Sen. Vitter's remarks on the Senate floor this morning, raising the debt ceiling will require agreement backed by legislative action on the Cut, Cap and Balance Act prior to August 2nd. The Republican senators introducing the bill see this as the only guarantee the unfolding fiscal disaster will be not only averted but fixed. As Sen. Toomey stated, "...strong economic growth and job creation require a sustainable fiscal profile."
Contact: Representatives, Contact: Senators
UPDATE: 7/8/11 The Cut, Cap and Balace Act is S.1340. As reported on 7/7/11 it was Introduced in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time.
Further Reading: