Senators propose rigid spending cap

Social Security, Medicare and virtually every other federal program would face the budget ax under legislation unveiled Tuesday aimed at forcing Congress to dramatically cut spending over the coming decade.

The bill, co-sponsored by Sens. Claire McCaskill, D-Mo., and Bob Corker, R-Tenn., would phase in a federal spending cap of just more than 20 percent of the size of the economy, which they said would wring almost $8 trillion from the budget over the coming 10 years.

Cuts of that magnitude would have to fall heavily on Social Security and Medicare, the retirement programs whose costs are being driven sky-high by the retirement of the baby boom generation.

The legislation doesn't actually propose cuts but instead sets spending caps and enforces them with the threat of automatic, across-the-board reductions. The idea is that the threat of such a meat-ax approach would force lawmakers to make more thoughtful cuts.

Corker said the measure is a "legislative straightjacket, a way of forcing Congress to dramatically cut spending."

The target of 20.6 percent of gross domestic product is the average of federal spending over 1970-2008. A recent Congressional Budget Office report projects spending under current policies reaching 24 percent of GDP in 2021, which would require more than $800 billion in budget cuts in that year alone. That is significantly deeper than the recent proposal by President Barack Obama's deficit commission, which recommended raising Social Security and Medicare retirement ages, and cutting military pensions, farm subsidies and a variety of other popular programs.

The Senate proposal sparked an immediate uproar among liberals who said it would force draconian cuts in Medicare, Social Security, the Medicaid health care system for the poor and disabled, and a host of other programs. They said it ignores fundamental changes in the country like the aging of the population, greater-than-inflation increases in health care costs, and relatively recent decisions to boost spending for homeland security, veterans and a prescription drug plan within Medicare.

McCaskill's idea went over like a lead balloon with fellow Democratic lawmakers. She is the sole member of her party who's backing the legislation.

"I will do everything that I can in throwing my legislative body in front of any efforts to weaken Social Security," Senate Majority Leader Harry Reid said. "Social Security has not contributed one penny to the debt, and as I've said before, people should leave Social Security alone."

The McCaskill-Corker proposal is just the latest proposal in a litany of procedural cures — lacking in any specifics — for the nation's deficit woes. Several lawmakers have proposed amending the Constitution to require a balanced budget, a proposal that seems to have virtually no chance of being adopted with the requisite two-thirds majority of both House and Senate. But they allow lawmakers to look tough on spending without offering any painful solutions.

"Despite their posture of making tough choices, these are 'Look, Ma, no hands' proposals," said Bob Greenstein, founder of the left-leaning Center on Budget and Policy Priorities. "But make no mistake about it — they would lead to enormous changes affecting nearly all Americans."

The real action on cutting spending looms over two must-pass bills: a government funding measure due by early March and legislation to permit the government to go further in debt.

"At a time when many families have been forced to tighten their pocketbooks, Congress must also learn to do the same," McCaskill said. "This bill isn't just about cutting back this year or next year; it's about instilling permanent discipline to keep spending at a responsible level."

The national debt recently passed the $14 trillion mark. Government spending totaled $3.5 trillion last year, almost 24 percent of the size of the economy.