A different approach is advocated by Sens. Bob Corker (R-Tenn.) and Claire McCaskill (D-Mo.). They are proposing a bill to put a “straitjacket” on federal spending, drawing it down from its current 24.6 percent of GDP to 20.6 percent over 10 years.
Corker told me that his proposal has “brute force elegance.” If Congress did not meet statutory spending limits, the Office of Management and Budget would automatically impose across-the-board cuts in all federal programs.
Corker described his approach as superior to attempting to dictate specific cuts now because that would likely lead to endless haggling and no agreement. His plan, he said, would demand planned cuts in the future — including entitlements — and save $7.6 trillion over 10 years.
As MacGuineas points out, though, two flaws in the Corker proposal are that it deals only with spending, not tax loopholes, and it puts the spending lid on at 20.6 percent of GDP, which is a 40-year historical average, but not enough in view of the retirement costs of the baby-boom generation.
Still a third approach, contained in nine different bills, would amend the U.S. Constitution to require a balanced budget each year — a drastic step that would not only take time to be adopted, if at all, but would make it difficult to fight recessions either with stimulus spending or tax cuts.
So, there’s lots of activity in Congress on the budget front, but so far Obama has not weighed in to influence it.
Ideally, he would have laid out guidelines in the State of the Union message, perhaps calling for a bipartisan “grand bargain” of spending cuts and revenue increases. The time for doing so is getting short.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.