The 'Super Congress' Is a Scam Designed to Force Cuts To Popular Programs And Keep Taxes On The Rich Low
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So it's a safe bet that the Gang of 12 goes the same way the Gang of 6, Simpson-Bowles, Rivlin-Domenici or any number of previous groups of Very Serious People trying to institute politically unpopular cuts went – nowhere, and fast.
So the trigger will kick in. What does that mean, exactly? In short: deep cuts to important services.
The government is projected to spend $46 trillion over the next decade, but a large chunk of that – more than $27 trillion -- is “mandatory spending” on Medicare, Social Security, Medicaid and interest payments, all of which are exempted from the trigger. Defense is another chunk, and then there's $6.7 trillion in domestic “discretionary spending.” In the first round, there was around $600 billion in cuts to this category, and when the trigger kicks in, it will add up to a total of $1.2 trillion, or a reduction of around 18 percent.
Matt Cameron at the Center for American Progress crunched the numbers and figured out how those cuts would be divided. The biggest hit would be in “education, employment, and training” – more than a fifth of the cuts would come from that category. Discretionary health-care programs, transportation, environmental protection, the State Department and Justice would also be hit. We're talking about a lot of programs that are both popular and necessary – Head Start, child care and K-12 education, family planning and health-care for the poor, job training, Pell grants, and services for the elderly.
The cuts will hit state budgets hard. According to the Center for Budget and Policy Priorities, “fully one-third of this category of federal spending flows through state governments in the form of funding for education, health care, human services, law enforcement, infrastructure, and other services that states and localities administer.” The “large cuts in federal funding to states would force states to make still-deeper cuts in their budgets,” concluded the analysis.
So states and localities, which have already shed almost 600,000 public sector jobs since 2008, will continue to do so, adding to the unemployment rolls and the demand for vital public services just as the funding for those services is being cut. Many of the cuts are “backloaded” in the belief that the economy will be rolling on all cylinders in 2013, but most economists expect this “recovery” to remain anemic in the near-term, if we haven't technically dipped into a recession once again by 2013.
A Process Based on a Big Lie
All of this is being driven by an alternative universe – inhabited not only by conservatives, but also most of the legacy media – in which we face “runaway” government spending and, as House Majority Leader Eric Cantor, R-Virginia, put it, “Washington doesn't have a revenue problem.”
That's the opposite of any objective reality. The undeniable fact is that this year, for the third year in a row, the federal government will collect the smallest share of our economic output in taxes than it has at any time since 1950, before we even had programs like Medicare and Head Start. And while spending (as a share of the economy) spiked short-term as a result of the crash, and efforts to counter the recession, before this debt reduction deal was cut, the government was projected to spend 23.6 percent of our economic output next year and 22.5 percent in 2014. Is that “runaway spending”? Well, the government spent 23.5 percent of our output under Ronald Reagan in 1983; four of Reagan's eight budgets authorized spending at 22.5 percent of our output or more. So this entire exercise is predicated on economic falsehoods.