( – promoted by Colorado Pols)
News has hit that Senator Mark Udall is cosponsoring the resurrected constitutional balanced budget amendment. The paper which shall not be named has a gushing editorial about it.
Needless to say, the base is rattled, and I think the Senator would do well to make the progressive case for this policy, or else every time the topic comes up the blogosphere will be a beehive being poked by a stick.
Fortunately, I don’t think it’s going to see the light of day in its current form for many reasons, but here are just a few:
1. The spending limit isn’t substantially different than the reconciliation rules in that it only takes a 3/5 majority to override it. Congress frequently waives the Byrd Rule already. So the spending side doesn’t have a lot of teeth while the revenue side is a straight jacket (see #2).
2. It contains a TABOR-like ratchet where spending is based on the previous year’s revenue. So when we go through a multi-year recession such as the one we just had, the budget would be needlessly constrained when spending is needed so as not to stymie a recovery. In addition, it has a percent-of-GDP cap at 20%. The problem there is sometimes the GDP drops suddenly. When that happens, government needs to spend more, not less, or the GDP will drop again as output gets choked off.
3. 3/4 of the states will never, ever ratify it. States and local governments derive a substantial share of their funding from the federal government, and as such if the federal government’s share of the funding expands and contracts with the economy then states will take a double hit.
4. There are times when we must deficit spend or face annihilation. If we had a balanced budget amendment in 1941 we’d all be speaking German or Japanese today. Fortunately the proposal has an out clause–a congressional declaration of war. Problem is, Congress hasn’t declared war since 1941. So while on one hand the constraint would tend to reduce the size of the military industrial complex and perhaps keep us out of several of our recent misadventures, it would also wipe us off the map as a world power. You can’t speak softly yet carry a big stick if you can’t afford the stick.
5. The base will stay home again. If we got a shellacking in 2010, imagine what will happen to us when hundreds of thousands of people are thrown off Medicaid because Wall Street screwed up again.
I don’t doubt Senator Udall’s sincerity about wanting to pay down the debt. But there’s very little in this proposal that seems workable. What we have to do is get the corrosive effect of money out of politics. We have a massive defense budget because of the power of the defense lobby. Our health care costs are so high because of the power of the various medical and insurance lobbies. We give massive tax cuts to the rich because if we don’t they’ll “shove 30-second ads up his ass,” to coin a phrase.
Even if, by some miracle (or catastrophe), this thing passes, and we don’t do something about the system of influence peddling, the rich and powerful are still gonna get theirs. The people who will suffer the wildly alternating cuts in services and tax hikes as the economy bobs up and down will be those who can’t afford to spend billions of dollars lobbying to protect their bottom lines. Comprende?