Spending Cap Could Hurt Federal Action on Climate

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The debt ceiling continues to be the focus of deliberations in Washington, as Vice-President Joe Biden leads negotiations with congressional leaders to hammer out a deal. A number of Republicans in Congress say such a grand bargain must include an overall spending cap—which means no new federal spending in any fiscal year unless it’s offset with cuts elsewhere in the budget.

A number of liberal groups have expressed concerns about what this means for social programs (see: here, here, and here). But it would also likely handicap federal efforts to deal with climate change using market-based measures, as the Center on Budget and Policy Priorities points out:

The cap that these proposals would establish very likely would make it impossible to enact any market-based strategy to reduce the carbon pollution that drives global warming. That’s because all such strategies — from carbon taxes to carbon “allowance” systems — are “scored” under Congressional Budget Office (CBO) budget rules as both raising federal revenues and spending them. Comprehensive climate change legislation would raise revenues by putting a price on greenhouse gas pollution and use those revenues for such purposes as protecting consumers and energy-intensive firms and workers and investing in energy efficiency and clean energy technology.

Because the global spending cap proposals would impose a cap on total federal spending in any fiscal year (as a percent of Gross Domestic Product, or GDP), they would bar adoption of such strategies unless they contained large offsetting cuts in other government spending. This would be true even for climate protection proposals that raised sufficient revenue to fully cover their spending — or even went further and reduced the deficit. In other words, even climate protection legislation that reduced the deficit would run afoul of a global spending cap.

It’s an academic point right now, really, since a federal climate plan, market-based or otherwise, isn’t going anywhere for the time being. But it’s worth noting that such a cap would have wide-ranging implications for federal policy.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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