February 1, 2011

Thoughts on the Corker-McCaskill Spending Bill

Senators Bob Corker and Claire McCaskill introducing a bill on Tuesday that proposes cuts to spending over the next 10 years.  Economist Matt Mitchell says the bill is relatively promising.

“A glide path that starts cutting today makes sense,” said Mitchell.  “This balances the need to start immediately with a reasonable desire to not front-load with too many painful cuts that will undermine support for austerity.”

Mitchell believes that in the event that Congress can’t agree on where to cut, the automatic and evenly distributed cuts make sense. 

“The last time something like this was tried, they exempted defense and entitlements, which meant the automatic cuts were concentrated on relatively few programs and had to be draconian to meet the targets,” said Mitchell.  “Hopefully, ‘evenly distributed’ actually includes all entitlements.”

Mitchell’s reservation with the plan comes from a concern that after spending gets back down to the “historical” average, it will never fall below that average. 

“This could present a problem at that point, especially for those of us who think that the ‘historical average’ of the past 50 years should be considered an historical aberration in which spending has been too high,” said Mitchell.