May 2, 2011; Source: American Prospect | In line with poll results showing that Americans would rather protect record-level corporate taxes than federal domestic spending, Democrats are gravitating toward the Commitment to American Prosperity Act, introduced this past February by Senators Bob Corker (R-TN) and Claire McCaskill (D-MO).
The bill would gradually reduce the proportion of the GDP that the federal government is allowed to spend, currently 24.7 percent of GDP.
The Senate version of the bill, S.245 (PDF), just picked up its second Democratic cosponsor, freshman senator Joe Manchin of West Virginia. A writer on the American Prospect’s website from Demos, the non-partisan public policy research and advocacy organization, worries that “conservative” Democrats might be fooled into supporting the Corker/McCaskill bill, not recognizing that it is “just a massive budget cut by another name.”
Oh, please! Manchin, McCaskill, and the other Democrats who will follow along know exactly what they’re doing. Manchin is a newbie who ran in a state where conservative Republicans were strong. McCaskill is up for reelection. They know the poll numbers, that the American public is disinclined to raise taxes and favors slashing spending.
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The CAP bill would start reducing federal spending to 22.25 percent of GDP in 2013, aiming toward a permanent ceiling of 20.6 percent by 2023. Spending that exceeds the cap would trigger automatic cuts to domestic spending including Medicare and Social Security, though the bill doesn’t predetermine where the cuts would come from by name.
The challenge of the CAP bill, and the poll results of Americans favoring cutting domestic spending, reflect a failure by Democrats to make the case that the budget deficit isn’t going to be cured by sucking public investment out of the social sector. In fact, McCaskill, Manchin, and others know that cutting spending in this economy is a sure-fire way to drag unemployment back into double-digit territory and more Americans into poverty. But the Democrats have failed to make the case, much less win the argument.
As nonprofits, the argument is to ensure that the people nonprofits serve, the people and communities to whom nonprofits are responsible, get the social supports they need to survive and, if not exactly thrive, to avoid falling further into the vortex of economic uncertainty. Despite being a major part of the GDP themselves, nonprofits haven’t succeeded in articulating an argument about domestic spending versus corporate taxes that will put a dent into the public opinion polls that the likes of McCaskill and Manchin read.—Rick Cohen