A Dangerous Paradox
Balanced budget amendment will require radical shifts in government, a fact nobody seems to get.
Thursday, July 14, 2011
This week, as the federal debt ceiling battle churns closer to Treasury Secretary Timothy Geithner’s Aug. 2 deadline, there’s increasing talk about an amendment to the Constitution that would require balanced budgets. Senate Minority Leader Mitch McConnell, a key negotiator in the debt ceiling talks, spoke this weekend about the need to “save our entitlements and our country from bankruptcy by requiring the nation to balance its budget.” Sen. Rand Paul now insists a balanced budget amendment must be part of any debt ceiling deal, and said Sunday that he will filibuster any agreement that doesn’t include it. Leading presidential candidate Mitt Romney also said recently that the United States should default on its debt unless Congress passes a balanced budget amendment.
The most important thing to know is that if enacted, the balanced budget amendment would make it impossible to have a balanced budget. Both the House and Senate versions of the legislation not only mandate a balanced budget starting in 2018, but also mandate how it must be done. Federal spending cannot exceed 18 percent of the national Gross Domestic Product, and there would be a supermajority requirement for any new revenue: In other words, two-thirds of Congress would have to approve any tax increase.
It is not hard to imagine that under a 67-vote threshold, Congress will never raise taxes again. Republicans have made it clear they will not support tax increases in virtually any situation, and most GOP Senators have signed Grover Norquist’s no-new-taxes pledge. So if the government permanently handicaps revenue, how can it possibly achieve a balanced budget, especially as health care costs are certain to increase as baby boomers become senior citizens?
SPENDING WOULD REQUIRE UNIMAGINABLE REDUCTIONS.
One answer would be that it’s not, which then raises basic questions of enforceability. Say the amendment was enacted, but Congress passes a budget where spending exceeds revenues. Would the federal courts rule the budget unconstitutional? What then?
Then there’s the 18-percent spending cap. Given that taxes are basically frozen by the supermajority provision, it’s quite possible that the government won’t even be able to raise revenue equal to 18 percent of GDP, meaning that Congress would have to spend even less than that in order to have a balanced budget. But putting that aside, even spending at 18 percent of GDP would be practically impossible and would require unimaginable reductions in government services.
The only budget proposal that would come close to federal spending at 18 percent of GDP is the ultra-conservative plan put forth by the Republican Study Committee. The Center for Budget and Policy Priorities found that it gets to 18-percent spending with a 70-percent reduction in non-defense discretionary spending by 2021. This is the area of the budget funding everything from “veterans’ medical care, most homeland security activities, border protection, and the FBI… [also] education, environmental protection, protecting the nation’s food and water supply, and medical research, as well as services for abused children, elderly people, and the disabled.”
The budget raises the Social Security retirement age to 70, makes deeper cuts to Medicare and cuts $86 billion over ten years from Pell Grants. If the idea is to shrink government “to the size where I can drag it into the bathroom and drown it in the bathtub,” in the words of Norquist, then the BBA is a watery coup-de-grâce.
The same poll shows support plummets to around 30 percent when the voters are told it would require deep cuts to Social Security and Medicare. This is why the media needs to be clear about what the GOP is proposing – the balanced budget amendment is one of the most dangerous soundbites in recent political history.
GEORGE ZORNICK writes for The Nation.