More About Robert Greenstein

Robert Greenstein

Greenstein is the founder and President of the Center on Budget and Policy Priorities. You can follow him on Twitter @GreensteinCBPP.

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“Emerging” House Republican Offer Could Spell More Trouble on Shutdown, Default

October 7, 2013 at 3:42 pm

The nation may be in for more trouble on the government shutdown and debt limit than many commentators realize — if Robert Costa’s recent National Review piece accurately reflects House Republicans’ thinking on their next steps.  In “The Emerging Offer,” Costa describes the “offer” that House Republican leaders are assembling, which suggests that what House Republicans will portray as a reasonable, middle-ground compromise is anything but.

The offer largely represents yet another effort to push — as ransom for President Obama and Congress to pay in exchange for House Republican agreement to reopen the government and raise the debt limit — a set of highly unbalanced policies that are favored by one end of the political spectrum.  The offer, Costa reports, will likely include:

  • A mechanism for “revenue-neutral” tax reform.
  • Cuts in Social Security and various other benefits through the “chained CPI.”
  • Medicare changes affecting beneficiaries.
  • Other entitlement program cuts.
  • Repeal of the medical device tax, which helps finance an expansion of insurance coverage under health reform.

So, Republicans get lots of budget cuts, a repeal of the medical device tax, and revenue-neutral tax reform that devotes all savings from politically achievable curbs on tax deductions, credits, and other preferences (known as “tax expenditures”) solely to lowering tax rates, with none for deficit reduction?  As we’ve explained, this would effectively take any revenue contribution to deficit reduction off the table for years to come, virtually ensuring that future deficit reduction must come entirely from budget cuts.

And for … what?  In return for all of these concessions, and for enshrining the use of threats of massive harm to the government and the economy as a legitimate political tool, House Republicans would agree to let the government do its job — to resume normal operations and pay its bills on time.

And if the President and congressional Democrats do not accept this deeply unbalanced package, then what?  Do House Republicans keep the government shut down and even let the government default later this month?

As our readers know, we believe that policymakers should consider the chained CPI (with protections for low-income or very old Americans), increases in Medicare premiums for affluent beneficiaries, and various other entitlement changes — but only as part of a larger deficit-reduction package in which Republicans agree to substantial revenue increases from curbs on ineffective or low-priority tax expenditures, address sequestration, and set adequate domestic discretionary funding levels.  But the formulation that Costa reports is very different.  It should be unacceptable for two basic reasons.

First, the President and Congress should make no concessions in return for re-opening the government or raising the debt limit, or else hostage-taking — in which congressional factions threaten to shut down the government or default (or actually force one or the other) — will become a regular feature of the American political landscape.  That’s a prescription for a great nation’s decline.

Second, carefully designed savings in entitlement programs and well-designed increases in revenues must go hand in hand.

Adding to concerns about the “offer,” I suspect that House Republicans will craft their framework for “revenue-neutral” tax reform so that, in fact, it opens the door to substantial revenue losses that would worsen deficits in future decades.  We’ve explained that corporate tax reform that’s revenue neutral in the first ten years would likely lose substantial revenue in subsequent decades.  (Key reductions in corporate tax expenditures now under discussion would raise much less money after the first ten years than in the initial decade; as a result, the White House has called for corporate tax reform that’s deficit neutral in subsequent decades as well as in the first ten years so it doesn’t swell long-term deficits.)

In addition, it’s widely understood that the tax-reform package that House Ways and Means Committee chair Dave Camp is assembling will use timing gimmicks on the individual side of tax reform as well in order to make revenue measures that would lose money on an ongoing basis appear revenue neutral in the initial ten years.  One way to do that, for example, is to change the tax treatment of various types of retirement savings so that taxpayers pay, in the first decade, tens of billions of dollars in taxes they are now scheduled to pay in future decades.  Such timing gimmicks can make a tax-cut package look revenue neutral in the first ten years while creating a big revenue hole after that, deepening our longer-term fiscal challenges.

Observers will need to look carefully at the tax-reform instructions or framework, if and when House Republicans unveil the offer that Costa writes about.  They will need to see whether it includes measures to assure real revenue neutrality over time or, instead, requires neutrality only in the initial decade and fails to bar the widespread use of timing gimmicks that would swell deficits in future decades.

All in all, what’s very troubling is that House Republican leaders, with the shutdown continuing and default drawing ever closer, are thinking that somehow they can present this “emerging offer” as something that passes for major progress and a reasonable offer.

Don’t Reward the Politics of Blackmail, or We’ll See More Shutdowns

October 1, 2013 at 2:56 pm

More than the fate of health reform (and whether millions of uninsured Americans get health coverage) is at stake in the battle over the government shutdown.  How well — or poorly — our democracy functions is increasingly on the line.

The shutdown battle is not over the funding levels at which the government will operate under a continuing resolution (CR) for fiscal year 2014.  President Obama and Senate Democrats have agreed to accept the Republican position that the CR maintain the fiscal 2013 funding levels, which reflect the sequestration budget cuts.

No, the shutdown is clearly, even nakedly, over a minority of members in one chamber of Congress (the House) trying to use a shutdown to extract, essentially as ransom, an otherwise unachievable legislative goal — to defund, delay, or otherwise unravel health reform.  (It’s a minority of one chamber because if House Speaker John Boehner allowed an up-or-down House vote on the Senate’s clean CR last night, it likely would have passed.)

Thus, the President and the rest of Congress must not give any concessions to hard-line House Republicans in return for ending the shutdown.  The reason is simple:  if they make concessions, then threats of government shutdowns will likely become a regular feature of our political landscape, and more shutdowns will likely occur in coming years.  The President and Congress will have rewarded the tactics of using a shutdown as a form of blackmail, paving the way for its use on a more regular basis.

Few things are more important than the effective functioning of our government.  We’re now at what could be a pivotal, even an historic, moment — one that will go a long way to determine whether shutting down the government, and even defaulting on the national debt, are acceptable ways for a militant, fiercely ideological minority to get its way.  For the sake of our democracy, we need to make sure that doesn’t happen.

Don’t Be Fooled: This Year’s Debt Limit Fight Is Frighteningly Different

September 20, 2013 at 10:13 am

Update, September 26: Although described as a “debt prioritization” measure, the provision in the continuing resolution that the House approved on September 20 really isn’t.  It would actually allow the Treasury to borrow funds that would not count toward the debt limit to pay interest and Social Security benefits.  While that would still leave the Treasury short of funds to pay other government obligations, it would not — contrary to what we originally wrote — leave less cash available for these purposes.  Our conclusion, however, remains: by appearing to make default legitimate and manageable, the proposal would heighten the risk that a default will actually occur.


This fall’s debate over raising the debt limit to avert a government default may seem like just another in a long line of battles by some lawmakers to attach unrelated items to this must-pass legislation — see, for instance, Glenn Kessler’s “Fact Checker” item in yesterday’s Washington Post — but that perspective misses a fundamental point.

Yes, Congress on occasion in recent decades has attached both fiscal and non-fiscal items to debt limit legislation.  But, on all of those occasions, the parties in question generally agreed that defaulting on the debt was not the desired outcome if they didn’t get their way.  They sought to attach their proposals to what they probably regarded as must-pass legislation — sometimes they succeeded, sometimes they failed — and Congress then raised the debt limit to avoid a default.

To be sure, the very same thing could ultimately happen this year.  But, increasingly, this year’s unfolding drama seems fundamentally different — all too many House Republicans are threatening to withhold their votes to raise the debt limit at all unless the legislation includes a delay or repeal of health reform — even if that means that the United States defaults, sending the economy into a tailspin.  This tactic isn’t just about trying to attach favored legislative items to a bill that’s certain to pass anyway; it’s about holding the debt limit bill hostage and actually defaulting unless Congress adds policy changes that otherwise cannot be enacted on their own.

In fact, House Republicans now seem to be preparing for a default.  They have proposed, as part of a short-term continuing resolution for fiscal year 2014 that they will consider today, to direct the Treasury to pay bondholders and Social Security recipients first if the government defaults.

Paying bondholders and Social Security recipients first won’t change the fact that the government has defaulted, and it would actually make things even worse for everyone else who’s owed money by the government — for instance, soldiers and veterans, doctors and hospitals that treat Medicare patients, state and local governments, and low-income Americans who receive Supplementary Security Income, SNAP (food stamps), and unemployment benefits.  But, the “prioritization” process seems designed to make default more palatable for the politicians doing the hostage taking.

But here’s the bottom line:

We should never get to the point of default — or even consider getting to it.  We should not legitimize the idea of a default.  We should consider the possibility beyond the pale. The potential costs to the economy, to U.S. and global markets, and to America’s standing in the world are simply too great.

Ideally, policymakers would abolish the debt limit, eliminating all risk that the government won’t pay its bills on time.  The United States is virtually the only major industrialized nation with such an arcane requirement.  But, failing that, Congress should raise the debt limit in a timely way and for an extended period of time.

What it should not do is hold the debt limit hostage to some Members’ desires to get their way at all costs, even if that means a default.

Setting the Record Straight on SNAP, Part 8: Hill Article Gets It Way Wrong on House SNAP Cuts

September 18, 2013 at 12:30 pm

A recent article in The Hill on the House Republican SNAP (food stamp) bill that faces a floor vote this week (“GOP to push bill restoring work requirements for food stamps,” Sept. 12) is riddled with serious errors.  All of them help to portray the House GOP proposal positively — which may not be surprising, since the article quotes only House Majority Leader Eric Cantor and a Cantor aide.

The problem starts in the very first sentence:  “House GOP leaders plan to call up a bill next week that would reauthorize the federal food stamp program and restore a requirement that able-bodied people must work or be looking for work in order to receive food stamps” (emphasis added).  In fact, under the provision, adults aged 18-50 who aren’t raising minor children will be cut off SNAP after three months if they aren’t working at least 20 hours a week or participating in a work or training program — even if they live in areas with very high unemployment where jobs are scarce.  “Looking for work” will not count.  If you’re looking for work but can’t find it, and you can’t find a place in a work or training program — something only a few states make available to all of these individuals — you will lose SNAP after three months.  The Hill’s lead sentence seriously misportrays the provision.

The second sentence is even worse.  “Republicans,” it says, “have sought to restore the work requirement since the Obama Administration told states in 2012 that it could be waived.”  That’s flatly false.  The waiver criteria — under which governors can request waivers from the three-month cut-off for areas with high unemployment — were developed by the Clinton and George W. Bush administrations.  The waiver criteria that the Obama administration is applying are the same as those that the Bush administration used.

The errors continue in the third sentence, which states, “The GOP has said that decision” — the supposed Obama administration creation of new waiver rules in 2012 — “gutted a key decision from 1996 that helped thousands of people leave the welfare rolls.”  Not only is this mistaken, but the article fails to note that the GOP proposal itself would undercut part of the 1996 welfare law — the 1996 law established the waiver authority that the GOP proposal would abolish.  Indeed, the Republican sponsors of the three-month cut-off rule declared on the House floor in 1996 that the waivers would avert serious hardship in areas with high unemployment.

The article also confuses the SNAP waiver authority in question, which Congress established as an explicit part of the food stamp provisions of the 1996 welfare law, with a never-implemented Obama proposal from 2012 to allow states to waive certain rules in the TANF program.  The latter proposal is a separate matter, entirely unrelated to the pending SNAP legislation, despite the article’s claim to the contrary.

Finally, the article says that the welfare law “turned food stamps into a block grant to states.”  It didn’t.

We need better informed reporting on important matters that affect millions of low-income people, not a string of erroneous statements that largely reflect political spin.

Setting the Record Straight on SNAP, Part 6: Eric Cantor Is Misrepresenting the House SNAP Cuts

September 16, 2013 at 1:38 pm

In announcing that the House will vote this week on legislation to cut SNAP (formerly known as food stamps) by $40 billion over ten years, House Majority Leader Eric Cantor said the following:

“No law-abiding beneficiary who meets the income and asset tests of the current program and is willing to comply with applicable work requirements will lose their benefits under the bill.”

Two plus two isn’t five and the earth isn’t flat.  Rep. Cantor’s statement is no more accurate than those claims.

Here are the facts.

In 1996, two conservative House Republicans offered an amendment to the welfare bill to limit food stamps to adults aged 18-50 who aren’t raising minor children to three months while unemployed out of every three years.  If such individuals were not employed at least 20 hours a week or participating in a workfare or job training program at least 20 hours a week, their benefits would end after three months.  The amendment passed and became law.

Most states and local workforce boards don’t run large-scale workfare or training programs for these individuals, and for most of these people, no places are made available in such programs.  If they can’t find a job, their food stamps are cut off.

The measure’s sponsors defended the provision in 1996 against charges that it was draconian, partly by stressing that it explicitly authorized governors to seek temporary waivers from the three-month cut-off for areas that had high unemployment or otherwise lacked sufficient jobs.  Since 1996, governors of both parties have requested and received such waivers, especially during the recent years of high unemployment.

The bill that Majority Leader Cantor is bringing to the House this week cuts $20 billion in SNAP benefits by eliminating this waiver authority.  No matter how high the unemployment rate in a locality or a state, the three-month cut-off would apply.

That means that people who pound the pavement looking for work but can’t find a job in an area with unemployment at 8, 10, even 25 percent would be summarily thrown off SNAP after three months.  The average income of those who would be affected is 22 percent of the poverty line (about $2,500 a year for an individual), according to Agriculture Department data.  These are some of the poorest people in America.

So, Cantor’s statement — “No law-abiding beneficiary who … is willing to comply with applicable work requirements will lose benefits” — is deeply deceptive.  Many very poor people who are looking hard for work and willing to take any job they can find, but can’t land a job in three months, would see their food assistance ripped away.  No one would know that from Cantor’s soothing statement.