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GOP Repeats Balanced Budget Amendment Farce

August 10, 2010

Historical events, it is said, occur twice: first as tragedy, then as farce. Sometimes, though, as with the latest Republican call for a balanced budget amendment, the farce is double. Even as they call for a budget busting $700 billion tax cut windfall for the wealthiest two percent of Americans, GOP leaders including John Boehner, Eric Cantor and Mike Pence can't - or won't - say where the necessarily draconian spending cuts would come from. And as the numbers show, 16 years after they first proposed it as part of the Contract with America, the Republican balanced budget amendment isn't merely a farce, but a fiscal suicide pact for the United States.
To be sure, the proposed Starve the Beast constitutional charade is hardly new. After all, Newt Gingrich's 1994 Contract with America, the 2008 Republican Platform and the 2010 Tea Party "Contract from America" all include a balanced budget amendment featuring a two-thirds supermajority to pass tax increases. But now, as The Hill reports, Republicans plan to make it a centerpiece of the fall campaign:

GOP Sens. Jim DeMint (S.C.), Lindsey Graham (S.C.), John McCain (Ariz.) and Tom Coburn (Okla.) will lead the charge in the fall, when Democrats plan to debate raising taxes on families that earn more than $250,000 a year...

A slew of Republican candidates in strong positions to join the Senate next year have endorsed amending the Constitution.

They are Rand Paul in Kentucky, Marco Rubio in Florida, Pat Toomey in Pennsylvania, Ken Buck in Colorado, Sharron Angle in Nevada, Mike Lee in Utah, Dino Rossi in Washington and Ron Johnson in Wisconsin.

A GOP strategist familiar with internal polling in some of these races says that surveys show strong public support for a balanced budget amendment, exceeding 65 percent in at least one race.

As for the supermajority requirement, South Carolina's Jim Demint boasted about the appearance of fiscal responsibility, "The point of that is so that raising taxes won't be the default way to balance the budget," adding, "The whole idea is to cut spending."
And there's the rub. Because as they've shown by repeatedly engaging in what Senator Sheldon Whitehouse called a "debt orgy," GOP leaders like their supporters won't say what - if anything - they'd cut in order to "drown government in a bathtub."
If this all sounds familiar, it should.
In 1992 and again in 1995, Republicans in the House and Senate narrowly failed in their first effort to drown government in a bathtub through a balanced budget amendment. Clinton Treasury Secretary Robert Rubin, no wild-eyed liberal by any stretch of the imagination, warned Congress that the GOP gambit would be ''a terrible mistake'' that would pose ''unacceptable economic risks to the nation.'' As the New York Times recalled in 1997:

In his testimony on Friday, Mr. Rubin said he would stress that if the amendment was in force, an economic downturn could quickly ''turn into a recession, and a recession into something worse.''

''The problem is that if the nation does in fact get into a recession,'' he said, ''we now have automatic stabilizers that go into effect that can increase demand in the government sector to offset declines in the private sector. What the balanced budget amendment would require is that during a recession we would have to raise taxes or cut spending to put ourselves back in balance. And that could exacerbate the recession.''

Of course, not a single Republican voted for Clinton's 1993 deficit reduction package, which along with a booming economy helped produce balanced budgets and a CBO-projected $5.6 trillion surplus by 2001. Nevertheless, Newt Gingrich like other of his GOP colleagues gave the Republican Congress credit for it:

Despite not passing the constitutional amendment in 1995, the Congress passed balanced budgets for four years, paid off $405 billion in debt and had the lowest spending growth - 2.9% - since President Calvin Coolidge.

Now, 16 years and two wives after the triumph of Republican class of 1994, Newt Gingrich is back. And so is the disastrous balanced budget amendment.
Voting against a deficit commission, John McCain argued, "Spending cuts are what we need. We don't need to raise taxes." But in making his case for the proposed amendment, Minnesota Governor and GOP White House hopeful Tim Pawlenty insisted, "I don't think anybody's gonna go back now and say, 'Let's abolish, or reduce, Medicare and Medicaid.'" All of which raises the question:

Just where would Republicans make their constitutionally-mandated cuts?

Of course, a balanced budget could theoretically still be achieved if Republicans were willing to make cataclysmic cuts to the $3.8 trillion federal budget proposed by President Obama. But these ersatz fiscal conservatives won't make the choices. We know this, because they told us so.
A quick note on the basic math of the budget. President Obama's proposed $3.8 trillion budget for 2011 is forecast to produce a $1.3 trillion deficit (down from $1.6 trillion in 2010). National defense and Social Security each come in at $738 billion. Medicare totals $498 billion, while Medicaid and other health care services add $260 billion and $25 billion, respectively. Throw in the required $251 billion in required interest payments on the national debt, and those portions alone of Washington's bill total over $2.5 trillion. Meanwhile, given that the Bush tax cuts accounted for half of the deficits during his tenure and more than half over the next decade, the Obama budget rightly calls for letting the Bush tax cuts expire for Americans earning over $250,000. (For more details, see this convenient New York Times interactive budget chart.)

But as a recent survey from the CBS and the New York Times made clear, the Republicans' Tea Party base has taken the big ticket items off table when it comes to budget cuts:

Despite their push for smaller government, they think that Social Security and Medicare are worth the cost to taxpayers...

And nearly three-quarters of those who favor smaller government said they would prefer it even if it meant spending on domestic programs would be cut.

But in follow-up interviews, Tea Party supporters said they did not want to cut Medicare or Social Security -- the biggest domestic programs, suggesting instead a focus on "waste."

Some defended being on Social Security while fighting big government by saying that since they had paid into the system, they deserved the benefits.

If defense, Social Security, Medicare and the required interest on the national debt are untouched, that's over $2.2 trillion. Somehow, Republicans would have to magically cut $1.3 trillion of the remaining $1.6 in FY 2011 spending. And the key is "have to."
For her part, 62 year old Tea Party supporter Jodine White acknowledged to the Times:

"That's a conundrum, isn't it? I don't know what to say. Maybe I don't want smaller government. I guess I want smaller government and my Social Security." She added, "I didn't look at it from the perspective of losing things I need. I think I've changed my mind."

She's far from alone. A recent poll by the Economist found that the only area of the federal budget which more than one-third of Americans supported cutting was foreign aid. "Bummer, then," Ezra Klein of the Washington Post wrote, "that it accounts for less than a single percent of the budget." For more on this stunning chart of what Americans are willing to cut (in blue) versus where their government actually spends their money (in red), see Annie Lowrey.

True to form, the Republican Party in 2010 only wants to make the fiscal crisis worse. After all, the national debt tripled under Ronald Reagan and doubled again under George W. Bush. Analyses from the Center on Budget and Policy Priorities showed that the Bush tax cuts accounted for almost half of the deficits during his presidency and, if made permanent, would contribute more to the U.S. budget deficit than the Obama stimulus, the TARP program, the wars in Afghanistan and Iraq, and revenue lost to the recession - combined.
As he detailed in "The Bankruptcy Boys" and "Starve the Beast," Paul Krugman's question to the likes of Demint, McCain, Gingrich, Pawlenty and other Republican born-again deficit hawks is, "OK, the beast is starving. Now what?"

At this point, then, Republicans insist that the deficit must be eliminated but they're not willing either to raise taxes or to support cuts in any major government programs. And they're not willing to participate in serious bipartisan discussions, either, because that might force them to explain their plan -- and there isn't any plan, except to regain power.

But there is a kind of logic to the current Republican position: In effect, the party is doubling down on starve-the-beast. Depriving the government of revenue, it turns out, wasn't enough to push politicians into dismantling the welfare state. So now the de facto strategy is to oppose any responsible action until we are in the midst of a fiscal catastrophe.

Or to put the Republican history of balanced budget frauds another way: farce, then farce.


Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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