February 3, 2011

SO I MENTIONED BOB CORKER’S NEW BUDGET CUTTING BILL EARLIER, and I just spent about a half an hour on the phone with him talking about it. Quite a few InstaPundit readers had emailed with questions or comments, so I raised some of those with him. Here are some of the things he said:

Teeth: Some InstaPundit readers thought the bill needed more teeth, but Corker points out that it requires sequestration of funds above the GDP-percentage cap, and that it affects not only discretionary spending but entitlements. Everything is put on-budget. And it takes a 2/3 vote, not a 60% vote, to escape the caps, making it tougher to opt out of than Gramm-Rudman. My suggestion: Add a citizen-suit provision, like environmental statutes have.

Why Not A Balanced Budget Amendment? He says he’s for one of those, too. But he doesn’t think there’s time. He sees a three stage process: (1) Specific spending cuts this spring, but unfortunately those will probably just be in discretionary spending; (2) His bill, which will start to take effect in 2013; and (3) A Balanced Budget Amendment, which will take several years to pass, most likely. He doesn’t think we have time to wait for a constitutional amendment. Plus, the bill adjusts its timetable if a constitutional amendment passes.

Why pick a 20.6% target and not a lower one? Corker says his first choice was 18% of GDP, which is the percentage federal tax revenues have averaged. But he felt that the average of federal spending over the past 40 years was politically achievable, while the 18% number probably wasn’t. “This is about action, not messaging,” he says. He wants to pass something now. Corker thinks our financial position is worse than the Administration does — we’ve benefited short-term from being perceived as a safe haven, he says, but that could evaporate very quickly.

In addition, he notes that this is a lower number than either the Deficit Commission, or the Ryan roadmap (which he calls “great”) will achieve by 2022. The President’s commission would cut about $4 Trillion from the baseline budget; this would cut $7.8 Trillion. The difference, he says, compounds over time. “If we can do more, I’ll be the first to vote for it.”

I should note that the GDP percentage the bill uses is based on an average of the three previous years, which means that — at least so long as the economy is growing at all — the actual percentage in any given year will be smaller than the cap amount. If you average 2009, 2010, and 2011, that number will be lower than 2012’s GDP, so long as the economy is growing. So 20.6% of the average of the previous three years will be somewhat less than 20.6% of the year to which its applied. I think this is a clever way to make the cuts a bit deeper than is obvious.

He says they’ve got momentum, with new cosponsors signing up, and that the bill has already done a lot to get people to look at how much the federal government takes out of the economy. He’s up for more, but “it’s a step forward, and it’s doable.”

He also notes that independents in swing states seem to care strongly about this issue, and that this should help bring Democratic support.

The text of the bill, which is rather short, is here. A one-page summary is here.

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