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The Wall Street Journal Vs The Balanced Budget Amendment

 

There is much talk of getting a Balanced Budget Amendment through the House, although it would almost certainly die in the Senate, and would never survive Presidential veto in any event.  It may well return under a Republican Senate and White House after the 2012 elections, but the Wall Street Journal ran an editorial today arguing that it’s still not a good idea.

The editors begin by asking “What, then, is the point?” of introducing a doomed BBA.  The point, as Newt Gingrich pointed out recently, is taking legislative action in favor of sound principles and forcing the Democrats to shoot it down.  Let’s hear these clowns explain why the budget can never, ever be balanced.

The first argument against the BBA is that it becomes a weapon for extorting endless tax increases from the public, unless coupled with spending caps.  The Journal is correct to stress this point, but obviously the “Cut, Cap, and Balance” crew has already thought of it.

The newest versions of the BBA include a strong provision requiring a two-thirds supermajority vote to increase taxes. That said, we doubt the historic 1981 Reagan tax cuts within the Kemp-Roth bill, once subjected to Congress’s revenue-neutrality accountants, could have survived the balanced budget mandate. Even with deficits, the U.S. grew strongly for seven years, adding to GDP as much as the entire West German economy.

I’m not sure what they’re driving at here.  Why would a supermajority vote to raise taxes have scuttled tax cuts?  Because Kemp-Roth raised some taxes by lowering others?  That kind of nonsense has given us the “progressive” tax regime that crushes economic growth, while allowing liberals to carve out a nice tax-exempt constituency at the lower income levels.  The tax code should be funding the government, not shaping the population.

The Journal editors worry that even the most tax-failsafe BBA would become a cudgel for beating the Pentagon:

In the current fight over spending and the debt, the GOP Congressional leadership has worked well to protect the defense budget from a President who constantly cites the need to cut it. But under a mandated need to balance spending, the inevitable horse-trading would likely default to cutting defense while ducking fights on domestic programs.

The Senate and House versions both contain waivers in times of military conflict, but these are fraught with problems. The supermajority requirement for taxes is waived if a “declaration of war” is in effect, or if a majority votes to support spending for a conflict “which causes an imminent and serious military threat” as described in a joint resolution of Congress. Sounds complicated. Would Ronald Reagan’s spending that did so much to end the Cold War have survived these hurdles?

The opposite result seems more likely to me: an endless series of “emergencies” declared to get around the BBA’s restrictions.  The spectacle of an American Left transformed into savage war hawks, forever agitating in favor of a new war that would authorize higher taxes and an imbalanced budget, would be something to see.

If compelling the choice between social programs and defense spending is a struggle we’re supposed to avoid at all costs, there’s not much point in resisting Big Government expansion at all.  A balanced and restrained budget will, of necessity, involve some choices between swords and plowshares.  It’s healthy for the population to think about such things.  Every dollar of government spending should be weighed and challenged.  Convincing the public that there is no reason to pinch pennies is part of what’s gotten us in trouble.

The Journal runs out of arguments against the BBA at this point, and suggests legislators direct their energies against the 1974 Congressional Budget and Impoundment Act, which they credit for “eviscerating the President’s ability to impound Congressional spending,” and unleashing the horror of baseline budgeting, which “automatically ratchets up spending from one year to the next.”

That’s an interesting point, and baseline budgeting is a horrible idea long overdue for demolition, but we can do that and require a balanced budget.  Perhaps it’s a good idea to do away with baseline budgeting first, or as an integral part of a BBA.  Actually, I suspect it would be an inevitable result of a BBA.

An interesting political argument is advanced against weaving a long set of balanced-budget skirts that “moderate” Democrats can hide behind:

The BBA’s supporters are right that the U.S. is riding a runaway entitlement train. That train, however, is the product of politics, and politics is the way it will have to be stopped. The main political impact of the BBA, however, will be to give “moderate” Senate Democrats up for re-election next year a chance to enhance their prospects by voting “for” spending control they don’t believe in.

I lean toward the opposite political result.  Since Obama and the Democrat leadership are so viciously opposed to the concept of a balanced budget, allowing those craven “moderates” to hide will dilute their strength.  A bracing moment of clarity will arrive when the GOP presidential candidate asks Obama why he opposes a platform of fiscal sanity that so many moderates in his party have embraced.  That’s how you (accurately) show the public that Obama and the Democrat leadership are extremists.

As for Senate races, I suspect the competitive GOP candidates will have no shortage of other positions to use against their supposedly “moderate” opponents, especially if the Obama albatross is dragging the party down.  2012 is going to be a bad year for Democrats.  It will take more than a tactical vote in favor of a doomed Balanced Budget Amendment to save them.

“Cut, Cap, and Balance” is the right thing to do.  It won’t pass in this Congress, but the drive to achieve it will shape the next one.  Some powerful things will be said in its defense, while some despicable things will be said against it.  The American people will profit from hearing both.

 

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Written By

John Hayward began his blogging career as a guest writer at Hot Air under the pen name "Doctor Zero," producing a collection of essays entitled Doctor Zero: Year One. He is a great admirer of free-market thinkers such as Arthur Laffer, Milton Friedman, and Thomas Sowell. He writes both political and cultural commentary, including book and movie reviews. An avid fan of horror and fantasy fiction, he has produced an e-book collection of short horror stories entitled Persistent Dread. John is a former staff writer for Human Events. He is a regular guest on the Rusty Humphries radio show, and has appeared on numerous other local and national radio programs, including G. Gordon Liddy, BattleLine, and Dennis Miller.

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