A balanced-budget amendment to the Constitution would require that every year the federal budget would have to be balanced, no matter what: no borrowing, not a dollar more spent than the government receives in taxes. It’s one of the worst ideas anyone in Washington ever had, but it’s particularly absurd coming from the GOP.
Under President Trump, Republicans have pursued the same three-part budgetary strategy they did under Presidents Ronald Reagan and George W. Bush:
- Large tax cuts, mostly for the benefit of the wealthy and/or corporations.
- Massive increases in military spending.
- Little change to the trajectory of domestic spending.
This naturally produces large deficits, since you’re increasing spending and cutting revenues. Thinking it would do anything different is like saying your plan to lose weight is to eat more and exercise less. The deficit may exceed $1 trillion next year.
But the truth is that the deficit isn’t really much of a problem. Yes, there are interest costs, but at the level it’s at right now it isn’t crowding out private investment and holding back the economy. Over the long run we want to keep the deficit to a reasonable level, but taking radical steps to slash it in the short run — steps with potentially catastrophic consequences — would be unfathomably stupid.
And that’s just what a balanced-budget amendment would do, not least because it would require that we slash spending precisely at those times when we need government spending the most.
One way to think about this is by looking at the relationship between the federal government and the states. As you may know, nearly all the states have laws mandating that they balance their budgets every year. While that might sound like it imposes admirable fiscal prudence, it also means that when there’s an economic downturn and revenues plunge, the states are required to make things even worse by cutting back on services. You just lost your job? Well guess what, the free clinic in your neighborhood is going to close too, and state employees are going to be laid off, which means they aren’t spending money either, so local businesses see their incomes go down, which cuts revenue further, which leads to more service cuts, which leads to more job losses . . . you get the idea.
This abysmal scenario can be partly mitigated by the federal government, which usually opens its checkbook during recessions and provides aid to the states so they can keep schools and other services running. That’s what happened during the Great Recession: As states plunged into fiscal crisis and faced brutal cuts to services, the 2009 stimulus bill sent almost $280 billion in federal dollars to state budgets. It didn’t make everything okay, but it wasn’t nearly as bad as it might have been.
Now imagine what would happen if, during the next recession, there was a balanced-budget amendment in place. State revenues dry up, and not only is the federal government not there to help, it’s imposing its own cruel cuts to services, which makes the recession both worse for everyone and longer lasting.
There are really only two reasons you could support a balanced-budget amendment. The first is that you think the scenario I’ve laid out would actually be a healthy one despite the monumental human suffering involved, because it would render us with no choice but to slash programs like Medicare, Medicaid, and Social Security in order to balance the budget. The second is that you know it would be a disaster, but you also know it will never happen; and you further know that people don’t really understand the implications, so you think supporting it makes you sound like a serious, fiscally responsible guardian of the public weal.
So why would Republicans start advocating this now? It may have something to do with the fact that, though they have control of both Congress and the executive branch, they have literally run out of ideas for things they would like to do. There are a few thoughts floating around — maybe they should do some infrastructure stuff, or find new ways to restrict abortion rights — but they’ve decided there will be no major legislation between now and the November election.
As The Hill recently reported: “Republicans in the House are pivoting to messaging bills and away from the hot-button issues that have dominated the first two months of the year.” In case you’re wondering, “messaging bills” are those that are practically meaningless, but are meant to fool voters into thinking they’re doing something when they aren’t.
Not to be outdone, the administration has some idiotic, discredited ideas of his own. Last weekend, Treasury Secretary Steven Mnuchin told “Fox News Sunday” that the administration wanted a line-item veto, which would allow the president to veto individual parts of bills he doesn’t like. It was left to host Chris Wallace to inform him that the Supreme Court has already ruled a line-item veto unconstitutional, which seemed to leave the secretary confused but still allowed him to pretend that the president is peeved about all the spending he’s been forced to support.
Add it together and you have a party that wants to claim it isn’t actually responsible for the decisions it makes and the programs it has enacted. If only there were some major alteration in the rules that would force them to act in a way they consider responsible, then everything would work out much better and we’d finally see the spectacular results of conservative governance.
But this right here, what we’re seeing now, is true conservative governance in action. The system isn’t to blame. It’s them.