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  • Ezra Klein Offers Dubious Statistics in Attacks on 'Cut, Cap, and Balance'

    [Klein responded in a post Wednesday afternoon. See below for our reply.]

    Ezra Klein, the Washington Post’s liberal political blogger, has been pushing a pair of questionable assertions in his posts on congressional Republicans’ plan to, as they say, “cut, cap, and balance” the federal budget.

    Klein has claimed, falsely, that the plan would cap federal spending at 18 percent of GDP. In fact, the Cut, Cap and Balance Act passed by the House on Tuesday brings spending down to 22.5 percent of GDP in 2012, then gradually reduces it to 19.9 percent in 2019, where it remains. Klein has also claimed that federal spending has not been “anywhere near” 18 percent of GDP since 1966. In fact, spending sat at 18.2 percent of GDP in 2000 and 2001 (as you can see in the chart above).

    The 19.9 percent cap would bring the federal government, in terms of spending as a percentage of GDP by president, all the way back to…2007.

    These data points are important, since Klein and others on the left are trying to paint Republican debt proposals as historically extreme, when they are anything but. The House’s CCB proposal would bring spending only slightly below its historical average of 20.3 percent of GDP.

    All of this information somehow escaped mention in Klein’s discussion of the CCB plan. Here’s what he had to say on Monday:

    The Republicans’ cut-cap-and-balance plan — perhaps better know to readers of this blog as The Worst Idea in Washington — will get a vote this week. The proposal would, among other things, cap federal spending at 18 percent of the previous year’s gross domestic product. The last time we were anywhere near there wasn’t during George W. Bush or Ronald Reagan. It was in 1966.

    Klein repeated his 18 percent claim the next day:

    The only way to prevent massive layoffs, the only way to give the unemployed some help and the underpaid some relief, is for the federal government to spend. And yet we want to write into the Constitution a requirement that spending remain at 18 percent of the previous year’s GDP? That is to say, a requirement that the federal government needs to make recessions worse rather than drawing on its unique capacity to make them better? Are we mad?

    Mad? No. Misinformed, perhaps.

    UPDATE (7/20/11, 5:45 PM):

    In their press conference on the House-passed Cut, Cap, and Balance Act on Wednesday, Sens. Barbara Mikulski (D-MD) and Barbara Boxer (D-CA) repeated a number of these same counter-factual claims.

    The CBB “cuts spending to 1965 levels,” Mikulski claimed. “That was 46 years ago!” Boxer insisted that the legislation caps federal spending at 18.5 percent, and also touted the inaccurate 1965 claim.

    So these Senators and a few of their colleagues called a press conference to bash legislation (Mikulski called it “cruel, dangerous, and stupid”) despite their apparent misunderstanding of one of its key provisions.

    UPDATE (8:12 PM):

    Klein responded to this critique in a blog post Wednesday afternoon, but his defense falls a bit flat. He writes:

    Title III of the Cut, Cap and Balance legislation says the debt ceiling can’t be lifted until Congress passes a constitutional amendment balancing the budget, capping spending and imposing a supermajority for tax increases. It specifically mentions S.J.Res.10, which is the constitutional amendment introduced in the Senate and supported by every Senate Republican, and the one whose numbers I’m using. It also mentions H.J.Res.1.RH, which appears to include the same limits. Until one of those constitutional amendments, or some variant of them, clears Congress, the debt ceiling can’t be lifted. And there are no exemptions for Medicare, Social Security, or anything else in either proposed amendment.

    The key phrase in that passage is “or some variant of them.” Klein is correct that the three balanced budget amendments specifically mentioned in the legislation would cap spending at 18 percent of GDP.

    He neglects to mention, though, that the legislation goes on to state that any balanced budget amendment that “requires that total outlays not exceed total receipts, that contains a spending limitation as a percentage of GDP, and requires that tax increases be approved by a two-thirds vote in both Houses of Congress for their ratification” would also be fine.

    In other words, the CCB Act does not bind Congress to any existing balanced budget amendment. In fact, it explicitly states that any such amendment would satisfy its requirement so long as it caps spending as a percentage of GDP at some level.

    Which is to say, the CCB Act does not cap spending at 18 percent of GDP, and does not require Congress enact any other measure that does. The only spending cap that the CCB Act itself would impose is the 19.9 percent of GDP cap – greater than the 19.6 percent of GDP the federal government spent in 2007.

    Klein insists on linking the CCB Act to existing BBAs, but the legislation requires no such link and in fact invites an alternative with a potentially higher spending cap.

    Posted in Ongoing Priorities, Scribe [slideshow_deploy]

    4 Responses to Ezra Klein Offers Dubious Statistics in Attacks on 'Cut, Cap, and Balance'

    1. George Colgrove, VA says:

      The current BBA suggests capping the federal budget to 19.5% of the GDP – it started out being 18%. This is dangerous as it allows government to grow with the economy. It will provide more money to the government that can be used to hire more regulators which will crush business. It would be best to cap the budget to a set number and allow adjustments to be made based on some index of the economy that measures inflation from some constant benchmark.

      A BBA should require cuts be made when expected revenue is not met. It shoud protect the people from interim tax hikes to meet spending. It should be something simple like:

      "Congress shall make no law that extends appropriations beyond that which the Government receives in revenue. Congress shall amend approved appropriations when said appropriations exceed collected revenue. Congress shall make no law that increases the financial burdens of the people to compel revenues to equal approved appropriations."

      • George Colgrove, VA says:

        That benchmark can be 2012. Inflation/deflation then can be measured from that benchmark and thereby allow agencies to set up their budget estimates from that. The amendment should be very simply worded so that there cannot be any loopholes.

    2. Pingback: CNN Poll: Two Thirds of Americans Support 'Cut, Cap, and Balance' Plan

    3. Joekuh says:

      I quote from Ezra's post about your GDP question:

      But I didn’t say we hadn’t spent 18 percent of GDP since the 1960s. I said we hadn’t spent 18 percent of the previous year’s GDP since the 1960s. That’s because S.J.Res.10 says we can’t spend more than “18 percent of the gross domestic product of the United States for the calendar year ending before the beginning of such fiscal year.”

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