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A Just-For-Show Balanced Budget Amendment Vote

Wednesday April 11th, 2018   •   Posted by Craig Eyermann at 6:59am PDT   •  

4753896 - a copy of the united states constitution on an amercan flag background Three weeks ago, the U.S. House of Representatives voted to pass a bipartisan $1.3 billion spending bill that, because it eliminated the spending caps imposed by the Budget Control Act of 2011, guarantees the return of the kind of annual trillion dollar budget deficits that characterized much of President Obama’s tenure in office.

Perhaps belatedly sensing that they may have done something wrong, the U.S. House of Representatives is expected to vote perhaps as early as tomorrow on adding a balanced budget amendment to the U.S. Constitution. Juliegrace Brufke of The Hill tells the story:

The House is slated to vote next week on a balanced budget amendment to the Constitution after lawmakers return from their Easter recess.

The decision to bring the measure — which would require Congress not to spend more than it brings in — to the floor comes just weeks after the passage of a $1.3 trillion spending package that is projected to add billions to the deficit.

The amendment, introduced by House Judiciary Chairman Bob Goodlatte (R-Va.), would require a “true majority” in both the House and Senate to pass tax increases and a three-fifths majority in both chambers to increase the debt limit.

The measure has virtually no chance of becoming law as it would need Democratic support in the Senate and ratification from the majority of states. While conservative hard-liners largely support the proposal, critics argue adding a constitutional amendment could weaken economic activity and exacerbate recessions by limiting the government’s ability to spend money.

The decision to take up the measure stems from an agreement struck between Speaker Paul Ryan (R-Wis.) and Republican Study Committee Chairman Mark Walker (R-N.C.) in October. Ryan agreed on a vote on the amendment in exchange for conservative support on a procedural budget measure needed for Republicans to move forward on tax reform.

Even as a largely symbolic measure, that is something that could at least be a tiny step toward establishing more effective fiscal discipline over the U.S. government’s spending. Unfortunately, the proposed text for the balanced budget amendment that the House would be voting upon is perhaps the worse they could possibly have chosen. Dan Mitchell excerpts the a portion of the proposed text and explains why it is such a lousy proposition:

Here’s the core provision of H.J. Res 2.

Section 1. Total outlays for any fiscal year shall not exceed total receipts for that fiscal year, unless three-fifths of the whole number of each House of Congress shall provide by law for a specific excess of outlays over receipts by a rollcall vote.

Sound reasonable and innocuous, but I’ve been telling folks on Capitol Hill this is the wrong approach. I pointed out that 49 out of 50 states have some form of balanced budget requirement, yet that doesn’t stop states such as Illinois, California, and New Jersey from over-taxing and over-spending, or from accumulating more debt.

I also explained that the so-called Maastricht rules in the European Union operate in a similar fashion, yet that hasn’t stopped nations such as Greece, France, and Italy from over-taxing and over-spending, or from accumulating more debt.

The problem, I explained, is that anti-deficit rules simply give politicians an excuse to raise taxes (which leads to more spending and more red ink, but I don’t think that causes many sleepless nights for elected officials).

Let’s use the recent passage of the Bipartisan Budget Act of 2018 as an example for why this version of a balanced budget amendment is such a bad idea. Starting with the vote in the U.S. Senate, the bill passed with far more than a three-fifths majority of that legislative body, so the amendment’s principal barrier to preventing budget deficits was easily hurdled by a coalition of politicians seeking a free license to spend and borrow more than they could under the terms of Budget Control Act of 2011.

However, in the House of Representative, the bill received 240 “Yea” votes (167 Republicans and 73 Democrats) and 186 “Nay” votes (67 Republicans and 119 Democrats), passing with a 56.3% majority, so at first glance, it would seem that the U.S. Congress would have to go back to the drawing board to get the spending number down to something more affordable for the nation.

But that’s not how Washington D.C. works. For the 426 members of the House who were present to vote on that day, it would have taken just 16 members to switch their votes from “Nay” to “Yea” to pass what would be constitutional muster to unlock the opportunity for unconstrained spending for themselves.

Now consider this: the motivation behind a very large percentage of the “Nay” votes in the House of Representatives was because the spending cap-busting Bipartisan Budget Act of 2018 didn’t spend as much as the opposing politicians wanted. All the bipartisan majority of politicians seeking to spend more would need to do to flip 16 votes from “Nay” to “Yea” to reach the magical three-fifths majority requirement under the proposed balanced budget amendment is to add even more spending to the bill.

For the 16 unprincipled politicians who would be willing to flip their votes for money, the sky would be the limit for what extra spending they could get. And because that kind of spending would by definition exceed the amount of revenue the government collects in taxes, it would all get added to the $21.1+ trillion national debt.

There is much more that’s wrong with the proposed balanced budget amendment that the House will be voting upon this week, but it is not worth going into at this time because, let’s be honest, it is going nowhere. If the House of Representatives wanted to make a more serious statement about establishing fiscal discipline in the U.S. government, it would be considering a balanced budget amendment that spells out how much the U.S. government’s total spending can grow from one year to the next, tying that value to how much revenue the government can prove that it can successfully collect in taxes to constrain it.

Alas, it is not. This week’s vote is just for show.

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April 2018