Congress Kills Another Balanced Budget Amendment, For Kicks
For whatever reason, the House chose to whip out ye olde Balanced Budget Amendment for another vote today, after it was voted down a couple of times this summer. It failed. The vote was 261-165 in favor of it, but—oops!—you need 2/3 support to amend the Constitution. That's because amending the Constitution should be hard, and not done whenever Eric Cantor and a few buddies think something on Fox News sounds cool.
This Balanced Budget Amendment, however, was less Republican-y than the previous, also-killed version. While that earlier one set a cap on total government spending at 18% of GDP — nothing like throwing some arbitrary macroeconomic metrics in the Constitution! — and required a 2/3 vote for tax increases, this one had no spending cap and allowed for simple majorities to approve tax increases. These seem like sane changes — "Spending capped at 18% of GDP" isn't exactly the lush, long-view language you find in a constitutional amendment, and if your goal is to balance the budget, then it doesn't make much sense to effectively rule out one of the two ways of achieving that. But conservatives have been griping about these changes, and some very conservative Republicans voted against it. This piece at National Review nicely lays out the conservative thinking on the absolute need for spending caps/impossible tax increases in any BBA:
There is no limitation on taxation or total spending, so the amendment could be enforced by a catastrophic across-the-board tax increase. Instead of spending at 25 percent of GDP, taxing at 15 percent of GDP, and borrowing the rest (as the Obama budgets have done), we could find ourselves both taxing and spending at 25 percent of GDP. Without a strict limitation on taxation and spending, a balanced-budget amendment by itself could do more harm than good.
You hear this paranoid reasoning a lot, on the right side of things. Rep. Paul Ryan didn't support today's BBA for this reason, saying that "Spending is the problem, yet this version of the BBA makes it more likely taxes will be raised, government will grow, and economic freedom will be diminished." And when anti-tax overlord Grover Norquist came out against Herman Cain's 9-9-9 plan last month, his problem wasn't that it was painfully regressive or thin on details. He was worried, and confidently so, that a new revenue stream — the national sales tax — would almost automatically be jacked up from 9 to 15 to God knows how much percent, immediately, because politicians are always raising taxes. It would be inevitable!
This is one of those times where I feel like the National Review, Grover Norquist, Paul Ryan et al. have been living in some sort of parallel dimension for the last 20 years, with strange variations in color, time, language, and basic political narratives. Where do they get this idea that allowing majority votes on tax increases will OBVIOUSLY lead to tax hikes of 10 percentage points of GDP per year. That's what the National Review person says: "Instead of spending at 25 percent of GDP, taxing at 15 percent of GDP, and borrowing the rest (as the Obama budgets have done), we could find ourselves both taxing and spending at 25 percent of GDP." Yup! Nothing glides more smoothly through Congress these days then a, what, $15 TRILLION TAX HIKE OVER TEN YEARS? This is just how Washington works! Give Congress any tax increase wiggling room, and all they do is double the rates every few days.
Except that is not at all how things work? Congress hasn't signed off on an income tax rate hike since Bill Clinton asked the rich to pony up a few extra percentage points' worth in 1993. It has been impossible to raise taxes since then. One party is 100% dedicated to thwarting any tax increase, and the other party is its enabler. I mean, does Grover Norquist have any idea how hard Grover Norquist has made it to raise taxes? I will be stunned if I ever see a marginal income tax rate increase in my lifetime, at this point. And yet a lot of conservatives think that once they allow a single cent in increased tax revenue to go through, even in a compromise bill to tame massive deficits, then it'll be a slippery slope towards 100% tax rates on everyone for everything by the next week. It's just... doubtful.
[Image via AP]