House approves ‘cut, cap and balance’ bill 234-190

The House on Tuesday evening approved the Republican’s controversial “cut, cap and balance” bill by a 234-190, mostly party-line vote, although the bill was likely made irrelevant even before its passage by signs of progress in the Senate on a debt-ceiling agreement.

President Obama himself announced that the bipartisan Gang of Six group of senators reached a broad agreement to cut $3.7 trillion over 10 years. Additionally, Senate Majority Leader Harry Reid (D-Nev.) said he saw a breakthrough on a smaller agreement that would allow Obama to raise the debt ceiling himself in three stages, subject to a procedural vote in Congress.

{mosads}Obama indicated that the latter plan could be needed as a backstop plan, as Reid said the Gang of Six plan might not be ready in time to meet the Aug. 2 debt-ceiling deadline.

In contrast to these Senate-based possibilities, the House GOP bill had the support of just five Democrats in the final vote, and was supported by all but nine Republicans. Obama said earlier in the day that few see the House-passed bill as a way forward given the dug-in opposition by Senate Democrats.

The House vote came after what was technically four hours of debate on the bill and an hour of debate on the rule. However, the entire process lasted nearly eight hours due to votes and the introduction of dozens of members who lined up to speak either for or against the bill.

Republicans argued repeatedly during the day that their bill, H.R. 2560, was the only plan on the table, and criticized the several Democrats who said it is too radical a plan. The bill would cut more than $100 billion in spending in 2012, cap spending to a falling percentage of GDP through 2021, and prohibit any additional federal borrowing until Congress approves a balanced-budget amendment.

House Budget Committee Chairman Paul Ryan (R-Wis.) said the bill is urgently needed to rein in a growing federal debt.

“In the good old days of 2007, we used to say that this debt was a threat to our children and our grandchildren,” Ryan said. “Not so anymore. It is a threat to our economy today.”

Republican support for the bill was punctuated by several comments that Obama is “arrogant” for telling Americans to “eat their peas” last week.

“This from a president who had the federal government on a ‘Supersize me’ diet since the day he has been sworn in,” Rep. Jack Kingston (R-Ga.) said. “Marie Antoinette would be proud of such arrogance.”

Rep. Trent Franks (R-Ariz.) added that Obama has been “breathtakingly arrogant” about the fiscal crisis given that the debt has soared by $4 trillion during the 30 months he has been in office.

House Majority Leader Eric Cantor (R-Va.) grew frustrated midday at Democratic charges that the Republican bill is aimed at protecting corporate tax loopholes by requiring a two-thirds vote for all tax increases. Cantor said Republicans have supported tax reform, but said Democrats have stood in the way of an agreement.

“I know it makes for good politics to throw the shiny ball out there … that somehow Republicans are wed to that kind of policy to sustain these preferences, when all along, in our budget and in our plan, we have said we’re for tax reform, we have said we’re for bringing down rates on everybody,” Cantor said.

House Budget Committee ranking member Chris Van Hollen (D-Md.) argued repeatedly that the bill is a Republican attempt to “graft” the GOP’s budget plan into the Constitution, particularly the two-thirds vote requirement for new tax increases. Rep. James McGovern (D-Mass.) argued during debate on the rule that such a dramatic change is being proposed without any committee debate or even much warning about the contents of the bill.

“Here we are today considering legislation that would fundamentally transform the United States economy, gut many of the programs like Social Security and Medicare that millions of Americans rely upon, and make radical changes to the Constitution, and the Republican majority of the Rules Committee has brought it to the floor under a closed rule,” McGovern said. “No hearings, no witness, no markups, no nothing.”

Several other Democrats argued that the GOP bill is essentially an even tougher version of the budget proposed by House Budget Committee Chairman Paul Ryan (R-Wis.). They said it would make drastic cuts to Social Security, Medicare and Medicaid. The Democrats continued to call for higher taxes on oil companies and other corporations.

But even as Democrats made these complaints, Republicans and Democrats were hailing a breakthrough in negotiations that has resulted in a broad compromise that includes many of the same elements found in the “cut, cap and balance” bill.

According to a summary from the Gang of Six talks, the agreement calls for immediate cuts of $500 billion, statutory caps on discretionary spending through 2015 and a two-thirds majority vote requirement for bills in Congress that exceed these caps. In addition, the plan foresees extending discretionary spending caps through 2021, as Republicans proposed in H.R. 2560.

The Senate plan does include tax increases through the elimination of tax breaks. However, the agreement would continue to allow home mortgage interest deductions and other tax breaks that many now enjoy.

In addition, it would lower individual income tax rates — a trade-off Republicans have insisted on if so-called tax deduction loopholes were closed — and lower corporate tax rates.

Late Tuesday, Cantor said House Republicans are reviewing this proposal. He said that while there are some “constructive ideas” in the bill, he is “concerned” with the revenue side of the bill. “I continue to caution that a tax increase is the wrong policy to pursue with so many Americans out of work,” he said.