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McCaskill plan to link spending and GDP draws flak from left and right

This article first appeared in the St. Louis Beacon, Feb. 2, 2011 - WASHINGTON - Taking what she called a "politically risky" step, U.S. Sen. Claire McCaskill, D-Mo., became the sole Senate Democrat on Tuesday to sponsor a bill that would cap all federal spending -- including Social Security and Medicare -- at a declining percentage of the nation's gross domestic product over the next decade.

"This bill is about long-term discipline," McCaskill said, joining Sens. Bob Corker, R-Tenn., Mark Kirk, R-Ill,, and Jim Imhofe, R-Okla., at a news conference to announce the legislation, called the Commitment to American Propserity (CAP) Act. "This is the kind of bill that helps Congress say no" to additional spending.

The bill would put in place a 10-year plan to cap all spending -- discretionary and mandatory -- to a declining percentage of the nation's gross domestic product. Eventually, it would bring spending down from the current 24.7 percent of GDP to the 40-year historical average of 20.6 percent of GDP. If Congress fails to stay under the cap, the Office of Management and Budget would make cuts in the federal budget to bring spending down to the mandated level.

"We have to say 'no' to say 'yes' for our long-term economic future," said Kirk.

McCaskill conceded that she would be criticized for putting Social Security and Medicare on the table for changes that would reduce spending, but she said that her goal was to preserve those programs, not to weaken them.

"I think this is a pathway for saving Social Security," she said, adding that "both sides of the aisle are engaging in irresponsible political cheap shots" related to what programs can be considered for cutbacks.

"We need to have all of it on the table. Do I want Social Security to be there for my kids and my grandkids -- absolutely. But should we be buying prescription drugs for Warren Buffett with federal tax dollars? Of course not."

True to her prediction, McCaskill was quickly criticized by liberal groups who said the caps would force sharp cuts in safety-net programs and do not take into account changes in society and government. The Center on Budget and Policy Priorities warned in a report that the Corker-McCaskill plan "would force draconian cuts in Social Security, Medicare, and many other programs while making it harder for the nation to recover from recession."

At the same time, Senate Majority Leader Harry Reid vowed to block any measure that would include Social Security in budget-cutting formulas.

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

Flak also came from the opposite side of the political spectrum. Lloyd Smith, the executive director of the Missouri Republican Party, issued a statement accusing McCaskill of "an election cycle ploy meant to distract Missourians from her record of excessive spending."

In the statement, Smith charged that McCaskill "is like an unscrupulous mechanic who breaks your car's engine and then offers to fix it at an inflated price" - a reference to her previous votes for the economic stimulus bill, the TARP program and last year's health care overhaul. Republicans claim "ObamaCare" will cost money, but the Congressional Budget Office says will have a net positive budget impact over the next 10 years.

McCaskill said she would try to find other Democratic supporters for the new bill, and Corker said he hoped to offer it as an amendment before the vote in the March on raising the national debt ceiling. It is among several proposals -- “ including a balanced budget amendment supported by Kirk and Sen. Roy Blunt, R-Mo. -- that would offer procedural solutions to the budget problem without specifying cutbacks. Unlike the proposed amendment, though, the McCaskill bill would not require a two-thirds majority vote to pass.

In a Senate speech, McCaskill said she expected flak and distortions from political opponents, and she criticized senators of both parties who refuse to be realistic about attacking the nation's budget deficit, which she said is leading to "the economic brink." Even so, she defended the economic stimulus program as a necessary "one-time expenditure" and the TARP bailout as "a genius decision in many ways because it stabilized our financial sector." She contended that "the biggest fiscal hole we are facing is because of the poor economy."

The Missouri senator, who is up for re-election next year, said she was well aware of the potential political consequences of supporting such cutbacks. "As I left my office, some members of my staff said, 'Good luck walking that plank' .... Because this is politically risky," McCaskill said. She added later in her floor speech: "If this bill is distorted and twisted [by opponents], it could cost me my Senate seat. And it's a price I'm willing to pay."

The Missouri senator also confirmed Tuesday that she is working with other senators - including Sen. Ben Nelson, D-Okla. -- to try to devise a way to amend last year's health-care overhaul in a way that might allow some people to opt out of the health-insurance mandate if they pay a penalty.

"The issue is: How do you get more people in a private-market pool. We have two judges who say you can, We have two judges who say you can't," she said, referring to two recent decisions by federal courts on the mandate.

"We are exploring whether or not it is possible to get enough more people in the [health insurance] pool by limiting the enrollment time and having significant financial penalties if you don't sign up during the enrollment time," McCaskill told reporters in the Capitol. "Will the research support that approach as workable to still allow [the health plan] to cover people with pre-existing conditions?"

"We're trying to maintain a private, free-market system and still cover people that are clearly risks in that private market."

Rob Koenig is an award-winning journalist and author. He worked at the STL Beacon until 2013.