What is the Cut, Cap and Balance Act passed by the House

On paper it seems like a sensible proposal. The question is whether automatic reductions for non-discretionary federal spending is politically workable in practice. Bear in mind that federal spending affects us all in one way or another. If there are automatic cuts in social security, medicare, and medicaid funding, would the public tolerate it? Would families suddenly want to incur the added expense of housing, feeding, and medicating their elderly loved ones? Are we to bring back the poor houses of the nineteenth century? What about aid to education and student loans? Would families tolerate or could they afford the added expense of paying for college education if there is a sudden cutback in aid? Twenty percent of the federal budget is allocated to the defense establishment. If cuts are to be fair, they should be across the board and include the defense expense of wars, weapons, and military personnel. Would military families and veterans tolerate sudden reductions? Would defense contractors? Don't forget that the defense establishment employs millions of people. What about corporate subsidies financed by taxpayers to major agribusinesses, big oil, and other special intersts? Would they stand for sudden reductions? Wouldn't they use their financial and political clout to fight reductions in order to maintain their profitability level? It is scandalous that some so-called conservatives oppose closing tax loopholes on the pretext it amounts to a tax increase. It's an utterly phony and spurious position financed by special interests with political clout. For example, hedge fund managers who earn billions only pay a 15% capital gains tax rate when the fund makes a 20% profit instead of the top marginal rate of 35%. The rest of us pay for their loopholes in taxes and interest on the national debt. The way that the Cut, Cap and Balance Act is proposed seems to place the onus only on the middle class and poor to cut back in order to balance the federal budget. Another factor is the transfer of costs from the Federal to State and local governments to balance the federal budget. Additional obligations on State and local governments, which are required to balance their budgets, would have to be financed through reduction of services and/or tax increases. Another factor is that reduction in federal spending takes money out of the economy and tends to be deflationary and reduce employment. There are those who say the vacuum resulting from downsizing government will be filled by the private sector. That may be true in theory and be effective over the long run. But sudden downsizing envisioned by the Cut, Cap and Balance Act that results in economic dislocations and hardships to millions of people used to a prosperous middle class life is not politically viable the U.S. now or tomorrow.

Just consider that both cutting and capping will take federal money away from states. Every states either directly or indirectly has a financial stake in a lot of the federal programs. All sorts of federal funding helps state economies from military bases to direct funding it's all money going their state economy. So each and every representative has a financial stake in keeping federal spending high because any decrease threatens to reduce funding to their state.

The states are required in their constitution to balance their budgets except for Vermont. So in my opinion the federal government needs to also balance it's budget. They only way tat the government will balance it's budget is with an amendment to the constitution. There is so much waste in so many of the programs and agencies that are run by the government. We3 need to stop sending funds to countries with out being able to monitor it. We have too many agencies and need to do away with some of them. If we had a flat tax We wouldn't have tax cheaters. Over 100 tax employees have cheated or helped their friends and family also cheat. http://www.washingtontimes.com/news/2011/may/23/irs-staff-committed-tax-credit-fraud/ All of this make me so angry.

Harry Reid is trying to Kiss up to Obamam everyone here knows how Harry and his band of thugs bought the election in Nevada...He went to the Union's and said if you don't vote for me don't come to me and ask for government jobs......Even was dumb enough to write a book and give it to the Casino workers... Why doesn't he resign he's not doing his job......Or is his job kissing up to Obama and his thugs....

I won't comment on the cut and cap part, I'm pretty sure we do need to do a healthy amount of both. But i am here mainly to comment on the balance portion. I am not entirely sure or sold yet on the idea of a balanced budget amendment. I have a lot of reservations so far. But more importantly, I have seen a lot of people saying even if it passes the senate, the president will veto it and will never see the light of day. What no one mentioning though is that even though that will kill the cut and cap part of it, the balance portion will still go on to the states for ratification. The president is in no way part of the amendment process. In light of that I do hope they are seriously studying the ramifications of the amendment portion, because if it passes the senate, it will likely be very rapidly (relatively speaking) be ratified by the state and it will be part of the constitution whether it was a good amendment or not.

you indicate that the act is something the people want. which people? the people in the house are proving themselves to be idealogues driven by the tea party principle of no taxes. certainly a noble goal. the act contains not a single reference to revenue from taxes. it ignores the fact that the wealthiest in our country are paying the lowest tax rates in 60 years and are seeing their wealth increase significantly year after year. All without adding jobs to the economy. very patriotic. the idea that spending cuts would reduce a deficit which took ten years to create means that social programs for the poor, the disabled, children, and the ill would be drastically affected. very christian. the gop continues to impress me as supportive of a small group of greedy, small-minded, mean-spirited politicians who will take over the party and either end it or change the character of our country.

Harry Reid showed his "Nobility" mentality here. What is he afraid of, not having as much taxpayer money to fund his bribe racket?

Prudent spending of money collected from the public is the only way to overcome any crisis financially. This is known by the Government.In India,many measure have been taken to control the credit flow to any individuals.Lot of precaution have been taken by the Central Bank and the implementation by the Authorities in the Bank.It is not so easy to get loan in Indian Bank and there is a lot of scrutiny before sanction of loan. Secondly the Corruption,it has been raising the ugly head in India and the measure are being taken and the Government should declare their corrupt wealth as national wealth and those who involved in corruption as anti Nationals.And this way the economy could be saved. But in US, it is otherwise. Getting a loan is very easy and simple.No much hassles in getting loans. Also US is helping many Countries in many ways.