Today MoveOn released a letter to Congress about spending cap plans (see text below and link here <http://s3.moveon.org/pdfs/economist_letter_final.pdf>) signed by 75 economists, including Robert Reich, James K. Galbraith, Lawrence Mishel, and Dean Baker:
--- TO: Members of Congress FROM: Interested Economists DATE: May 9, 2011 Honorable Members of the House of Representatives and Senate: We write today to warn of the danger of spending cap plans—like the one proposed by Sens. McCaskill and Corker, and the Balanced Budget Amendment by Sens. Shelby and Mark Udall —to indiscriminately restrict government spending. Such caps would require cutting or eliminating programs that are vital to the middle class like Social Security, Medicare, and Medicaid. To put it bluntly, these plans would amount to nothing less than a Medicare kill switch. Eliminating these programs would undermine the security of the nation’s working families. The Congressional Budget Office’s cost projections imply that the House Republican plan to privatize Medicare would increase the cost of providing health care to seniors by $34 trillion over 75 years, and shift the increased costs onto seniors. While the budget plan approved by the House imposes this enormous cost by explicitly privatizing Medicare, the caps imposed by the McCaskill/Corker plan would almost certainly lead to the same outcome. As an analysis from the Center on Budget Policy and Priorities shows, the plan would “inevitably force enormous cuts in Medicare, Medicaid, and possibly Social Security.” By setting a spending cap, rather than a deficit cap like the one included in the president’s proposal, the McCaskill/Corker plan and the Shelby/Udall plan wholeheartedly endorse the false view that current and projected future budget deficits are due to excessive spending. In fact, tax cuts, which have disproportionately benefited the wealthy, are largely responsible for these deficits. These tax cuts compound the massive upward redistribution of income that the country has seen over the last three decades. Insofar as spending is projected to increase over the next decade and beyond, it is entirely due to an aging population, rapidly rising health care costs, and increased interest payments. Rather than grappling with these issues seriously, the McCaskill/Corker plan, and others like it, pretend they don’t exist. Finally, the McCaskill/Corker plan and the Shelby/Udall plan would also hamstring the government's ability to increase federal spending when necessary to boost the economy in the face of a downturn. Such counter-cyclical spending has consistently been supported by the leadership of both parties. If the federal government fails to counteract economic downturns it will lead to higher unemployment and longer recessions. Thus, it is in the strongest terms that we urge you to rule out McCaskill/Corker and others like it. Letting those who want to cut vital government programs hide a Medicare kill switch in a reasonable-sounding proposal would be bad for the budget and bad for America. Respectfully, [Click here <http://s3.moveon.org/pdfs/economist_letter_final.pdf> to see the signers of this letter] -- Nicole Woo Director of Domestic Policy Center for Economic and Policy Research (CEPR) 202.293.5380 x108 woo @ cepr.net www.cepr.net _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
