Editor's note: This article is one of an eight-part series that examines where U.S. Sen. Claire McCaskill, D-Mo., U.S. Rep. Todd Akin, R-St. Louis, and Libertarian candidate Jonathan Dine stand on some of the issues important to Missouri voters.
Akin wants to cut federal outlays, cap the debt ceiling and balance the federal budget. He supports U.S. Rep. Paul Ryan’s budget plan, which would cut spending for programs ranging from domestic transportation and federal research to food stamps and housing assistance programs.
Akin also believes reorganizing government bureaucracy will ensure more efficiency and reduce spending. He wants to restructure Senate committees so that each federal agency answers to only one committee, which would increase control over that agency’s budget and regulations.
Dine said politicians have “brought us to the brink of fiscal disaster” with “reckless” cap-tax-and-spend policies. He said he would balance the budget in 2013 and vote “no” on any legislation containing earmarks, corporate subsidies or taxpayer bailouts. Dine also wants to scale back defense funding, reform entitlement programs, stop foreign aid and end the “war on drugs.”
McCaskill believes in enacting long-term debt reduction. She wants to permanently ban earmarks in legislation, impose five-year binding caps on all discretionary spending and reduce outlays to 20.6 percent of gross domestic product. She thinks debt reduction must have a moderate approach and is willing to lower the corporate tax rate but wants compromise on other issues.
McCaskill supported the Obama administration’s $447 billion jobs bill in 2011 and is willing to look at the Simpson-Bowles Commission’s recommendations for solving federal debt.
What experts said
Dean Crader, research analyst with the MU Economic and Policy Analysis Research Center, said any plan put in place needs to have a deficit reduction because the Federal Reserve has few tools left to promote lending and stimulate the economy.
“Politicians will always use worst-case scenarios when referring to their opponent’s plans,” he said. “In terms of projections of debt reduction, Ryan's projection of Obama's budget plan was unrealistic.”
Crader said slashing spending will reduce the deficit but prioritizing government spending can generate revenue to fund the programs.
“Overall, if reducing the deficit is the goal, less spending reduces it,” he said. “But in the end, reducing the deficit depends on how exactly the revenue is cut and how other sources of revenue are spent elsewhere.”
MU labor economics professor Peter Mueser said the main issue is whether the budget will be balanced in the long run by both cutting government spending and raising taxes — or by choosing one or the other.
The Simpson-Bowles Commission allowed for the possibility of both, Mueser said. He said McCaskill wants to associate herself with Simpson-Bowles because it is bipartisan and isn’t entirely an Obama position.
“The real question is ‘What else happens?’” Mueser said. “People talk about the deficit as if it’s going to be a problem tomorrow, but it’s actually a problem years and years from now."
Mueser said that if the budget were balanced because of sufficient cuts in government spending, a government debt crisis would be avoided. If government spending isn’t cut, the deficit will balloon over the long run and will be a serious problem.
“Also, in the absence of any increases in taxes, you have problems,” he said. “Conservatives will say government spending wasn’t cut enough. Liberals will say taxes weren’t raised enough. The answer, of course, is both.”
Whether government stimulus should be applied in the current economic environment is something economists are split on, Mueser said.
“I can name a pair of Nobel Prize winners on either side of the issue," Mueser said. "Republicans have taken the view that government spending to stimulate the economy was not effective and will not be effective in the future. Democrats take the opposite stance, and some say the stimulus wasn’t large enough. If you’re going to spend stimulus money on anything, it would be good to spend money on something for which there is clear need. There is a pretty wide consensus that money is needed for infrastructure.”
Supervising editor is Scott Swafford.