Taxes & Spending

Balanced Budget Amendment Flunks Final Test

The quest for a balanced budget amendment to the Constitution failed its final tests Wednesday as the Senate voted to defeat both Democrat and Republican versions, which would have blocked Congress from future spending binges.

The Republican version failed on a vote of 47 yeas to 53 nays, while the Democrat proposal was defeated 21 yeas to 79 nays.

Both parties agreed to vote on a balanced budget amendment before the end of the year as part of the August deal on raising the debt ceiling. The measure also failed in the House last month on a 261-165 vote, below the needed two-thirds majority or 284 needed for passage.

“For too long, the politics of the moment or of the next election has been put ahead of Congress’s responsibility to balance the books,” said Senate Minority Leader Mitch McConnell (R. –Ky.). “Too many promises have been made that can’t possibly be kept.”

Sen. Mike Lee (R.–Utah) said he was surprised that 60 percent of Senate Democrats did not support either version.

“It sends a strong signal that the majority of Democrats in the Senate do not view Congress’s out-of-control spending to be a problem, and the American public should be appalled,” Lee said.

“Despite all the warnings from economists and experts on both sides that we are headed for a fiscal meltdown if we don’t control spending, the majority of Democrats in Congress are content to do nothing about it and choose instead to fight political battles aimed at the next election,” Lee said.

The Republican amendment would have required Congress to balance its budget annually, limited federal spending to 18 percent of the Gross Domestic Product, and required a two-thirds majority in the House and Senate to raise taxes except for extenuating circumstances like war.

“We are taxing and spending this country into bankruptcy,” said Sen. Orrin Hatch (R.–Utah), the author of the Republican bill.

Hatch said he was fed up with Congress’s tax and spend mentality, and that a balanced budget amendment would restore the nation’s fiscal integrity.

“We are having this debate for a simple reason,” Hatch said. “Our nation is now $15 trillion in debt.”

“The nation achieved the ignominious landmark of a trillion dollar deficit in President Obama’s first year in office.  We are now in our third straight year of trillion dollar deficits,” Hatch said.

The federal government is borrowing 40 cents of every dollar that it spends, and the burden of debt for every American is $48,000 each.

“The impact of this quickly escalating debt burden could prove catastrophic for economic growth and for America’s families,” Hatch said.

Sen. Mark Udall (D.–Colo.) sponsored the Democrat measure, which had no spending caps nor did it require a supermajority to raise taxes. It required that Congress submit a balanced budget, but Congress could also overturn that provision in national emergencies.

Udall also said his plan brings back the “Social Security lockbox” to prevent those funds from being used to balance the budget.

“It’s time to put aside our political differences and check our ultimatums at the door and work across the aisle,” Udall said. “We’ve run out of time to act. We should not pass off this unsustainable debt to our children.”

Democrats who objected to the Republican measure said they were concerned it would put the courts in charge of deciding future disagreements about spending.

Sen. Patrick Leahy (D.–Vt.), chairman of the Senate Judiciary Committee, said the federal courts are not equipped to enforce the amendment and that it relinquishes Congress’s constitutional power of the purse to an unelected judiciary with no budget experience.

“Do they really want judges deciding fiscal policy?  Do they want judges deciding whether to cut Social Security or raise taxes?” Leahy asked. “We should not for the first time in American history amend the Constitution to set fiscal policy.  It is a bad idea.”

“I wish those who so often say they revere the Constitution would show it the respect it deserves rather than treating it like a blog entry. Let us not be so vain as to think we know better than our founders and better than the constitutional framework that has preserved our liberties for more than 200 years. Partisan efforts like this may make good bumper-sticker politics, but they are bad solutions,” Leahy said.

Sen. Chuck Grassley (R.–Iowa) said reverence for the Constitution does not mean it can never be amended.

“When it is necessary, each generation has amended the Constitution,” Grassley said.  “When a guarantee of free speech, or the abolition of slavery, or giving women the right to vote was necessary, the Constitution was amended.  No one said that reverence for the Constitution was the end of the matter.”

Meanwhile, Senate leaders are at odds over the payroll tax package passed by the House on Tuesday and a $1 trillion spending bill to keep the government open past a Friday night deadline.

Senate Majority Leader Harry Reid (D.–Nev.) wanted to vote on the matter Wednesday so Democrats could defeat the measure. “The sooner we put this useless partisan charade behind us” the faster we can craft a new bill, Reid said.

Democrats don’t like a provision that forces President Barack Obama to make a decision on the Keystone XL pipeline, which would create 20,000 jobs, but is opposed by the party’s environmental interests.

Republicans don’t like the Democrat version, which raises taxes on the wealthy to pay for the tax cuts on the middle class. Key Democratic Senators reportedly spent the afternoon at the White House and are now considering eliminating the new surtax.

McConnell blocked the tax cut vote though, insisting that the Senate take up the omnibus spending measure first.

“I agree with the majority leader, a government shut down is a terrible thing. The way to avoid that is to get our work done,” McConnell said.

The House is expected to file a Megabus spending bill Wednesday night, which could be on the Senate floor for a vote before Friday.


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