Balanced-Budget Amendment? Really?

Bruce Bartlett Capital Gains and Games February 3, 2010

"Children who are victims of failed personal responsibility are not my problem, nor are they the problem for our government." -- GOP Majority Leader Tim Pawlenty, April 2001 - as quoted in the Aitkin Independent Newspaper

So, when the idea of cutting/gutting/eliminating Social Security/Medicaid/ANY program that actually helps people, let alone kids in poverty through no fault of their own, is proposed by Gov. TBag, it's really nothing new for TBag and his fellow travellers.

The Republican Party long ago decided that Myth Trumps Reality & Facts. This trope from Pawlenty is merely another manifestation of a concerted effort to fool some of the people all of the time. A lazy, uninformed, and forgetful electorate likes talking points and platitudes in lieu of the messier results of cause & effect analysis.

Hilarious. EVERY single Republican voted against Pay-Go. "I hate it as a statute, but I LOVE it as a constitutional amendment!"

Pawlenty's advice boils down to two things:

1. Decrease the deficit by increasing it (by reducing revenues).

2. During hard economic times, we should force the government to fire a great deal people just like the states currently have do, or force them to raise taxes right when people need their money the most (or some combination thereof).

Call me crazy but I don't think massive layoffs + sudden tax hikes are the best way for the government to deal with a recession.

Pawlenty writes:

we need an amendment to the U.S. Constitution to require a balanced budget with limited exceptions for war, natural disasters and other emergencies.

I read Pawlenty's article before reading Bruce's post, and my first thought upon reading the above from Pawlenty is perhaps the kind of thing to which Bruce refers when he says "I can easily foresee the U.S. in a perpetual state of emergency to avoid the necessity of balancing the budget." My thought was that the "war" exception, coupled with the semantics of our day (and particularly Republicans) -- our "War on terror" and similar phrases using "war" as a descriptor for our anti-terrorism efforts -- means we will never NOT be "at war", since, practically speaking, there can be no end to our anti-terrorism efforts.

I also concur with Bruce's criticisms in general, and I'd note that not only is it stupid or disingnuous for Pawlenty to assert that broad tax cuts are a key part of solving our fiscal imbalance problem (tax cuts generally have a strongly negative net impact on revenues -- see http://swordscrossed.org/node/1671 ), but there is also another persistent, pervasive, moronic argument constantly put forth by those who oppose any tax increases as part of the solution to our long-term fiscal imbalance. They say essentially "The projected long-term fiscal imbalance exists entirely because of projected growth in spending on entitlements, therefore the solution should be entirely by reducing projected spending on entitlements". This is moronic on two levels. One is because it ignores the question of what is politically feasible. But even putting that aside, it is simply irrational. It's like saying that if I've started gaining weight because I've become less active, the only way to stop gaining weight is to get as back to being as active as I was before, as opposed to consuming fewer calories or some combination of the two. Or, to highlight the irrationality even more clearly, it's like telling someone who now has financial difficulty because he just lost his job that the only solution is for him to get back that specific job that he lost, as opposed to finding a different one (along with any other measures such as spending less in the meantime).

"It's too transparently phony even for them."

What?

Is this maybe a joke that went over my head? Because you can't possibly be serious about it, can you?

Great piece, but I don't see why you come to a differennt conclusion today than any of us would have come to last week.

You say: "He may think he has found a clever way of appealing to the right wing tea party/Fox News crowd without having to propose any actual cuts in spending, but it isn't going to work. It's too transparently phony even for them."

After the SOTU, and the give and take at the Republican retreat, nothing has changed. The President's performance will hold the news cycle to a week or so, and then Boehner, Cantor and co will be be back to the same talking points.

I wish I could share your optimism, and belief that a good week on the left equals enlightenment on the right.

I think the congressional dems need to go for reconciliation.

I admit that my last point may have been wishful thinking.

Last Friday, in Obama's "Q"&A with House Republicans (I must put "Q" in quotes given that they were mostly talking point rhetoric) Rep. Jeb Hensarling made a bogus assertion regarding the size of current deficits vs. those he regards as "under Republicans" (see fact check at http://politifact.com/truth-o-meter/statements/2010/jan/29/jeb-hensarlin... ). His assertion was both bogus and silly (the latter because it was devoid of context and misleading in implications), but my thought as soon as I saw Hensarling was: Oh, that's the guy who ignorantly, moronically or disingenuously asserted that tax cuts such as the Bush tax cuts increase revenues, and who tried to get then Fed Chairman Greenspan to concur. Greenspan disagreed instead. I remember it because it made my compilation of quotes of economists stating that tax cuts generally (and/or the Bush tax cuts in particular) do not increase revenues, but are believed to have a net negative impact on revenues (that compilation is at link in my prior comment upthread).

Here's the transcript from the House Budget Committee hearing, 9/8/04:

[Rep. Jeb] Hensarling [R-TX]: "¦ the latest reports I see from Treasury indicate that revenue is actually up since we passed the latest round of tax relief"¦seemingly suggesting that at least in this particular case, that maybe tax relief did help ignite an economic recovery that has added revenues to the Treasury and actually helped become part of the deficit solution as opposed to part of the deficit problem. So my first question is, have you seen these reports from Treasury, and do you concur that revenues are up now over what they were a year ago?

Mr. Greenspan:Well, Congressman, I think the general conclusion about the fact that revenues are lower than they would otherwise be without the tax cut, but higher because of the tax cut, is best described by saying that a tax cut will immediately lose revenue, and then to the extent that it increases economic activity and generates a larger revenue base will gain some of it back. It is very rare, and very few economists believe that you can cut taxes and you will get the same amount of revenues. But it is also the case that if you cut taxes, you will not lose all the revenue that is implicit in the so-called static analysis. http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_house_hear...

Mr Batlett once again demonstrates that there are honest, fiscally responsible conservatives still in our country. Pawlenty and his ilk have no regard for the truth, only votes.cowbirds

Pawlenty organized and spoke at a pro-life rally with Michele Bachmann here in Minnesota two weeks ago. Note to the rest of the country: be afraid of crackpot politicians from Minnesota!

The story is here: http://www.startribune.com/politics/state/82372242.html?elr=KArks8c7PaP3...

Squawk! TAX CUTS! Squawk!

According to the GOP, that is the solution to every fiscal problem in existence. Surplus? Tax cuts. Deficit? Tax cuts. Massive crash in federal revenue like we just saw? Tax cuts.

"When the only tool you have is a hammer, every problem looks like a nail."

Your comment reminds me of what I wrote a couple of years ago at http://swordscrossed.org/node/1755 "All You Need To Know About Fiscal Policy"

And while I'm at it, this one is from a couple of months later in January 2008 http://swordscrossed.org/node/1916 "No, Rudy, That's NOT Fiscal Conservatism"

Pawlenty is recycling an old trick:

http://minnesotaindependent.com/49103/pawlenty-never-submitted-a-budget-...

I have to agree with TwoPuttTommy. The far-right GOP talks about tax cuts, but their record really suggests that their plan is to end entitlement spending to fund it. I don't think their problem isn't that they don't realize that tax cuts cost money, its that they don't realize that eliminating school lunch programs won't cause eight-year-olds with neglectful parents to find their own food, for just one example, and eliminating all social welfare programs likely would make the US a miserable country to live in, even if your rich, because starving, sick people on the street are such a downer.

"Like all Republicans these days, Pawlenty wants to have it every possible way: complain about the deficit while ignoring everything his party did to create it." : Not ALL Republicans. Please read House Budget Committee ranking Republican Paul Ryan's credible budget proposal which has been scored by CBO to eliminate the U.S. budget deficit (mostly by gutting Medicare). There is no credible Democrat plan to eliminate the budget deficit.

I have looked at Paul's proposal and it's honest although Utopian. However, I have trouble forgetting that he voted for Medicare Part D back in 2003. That alone will add about $1 trillion to the deficit over the next 10 years. I also assume he voted for every Bush tax cut.

The Democrats are just as bad. The Democratic plan, let's say goal, really, to reduce the deficit was supposed to be "healthcare reform," which should include reforms to Medicare and Medicaid so government stops bleeding money. But since the bill was a real bag of holiday nuts, and they basically caved on reforming either in a meaningful way and instead expanded them with money from the mandate tax (to give the rest of us crappy, unaffordable, poorly regulated, take your premiums and deny your benefits insurance)- they don't have a lot of credibility, no.

While I'm not sure if Gov. Pawlenty is ready for prime-time, his argument here certainly doesn't disqualify him. That's because it appears the Republicans have no interest in actually governing, they're merely seeking electoral victories. From that perspective, Mr. Pawlenty's argument presented here isn't much different than the current set of GOP Senators who repeatedly submit plans proven to have failed previously and fail to get support from any independent experts.

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Balanced-Budget Amendment? Really?

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