Magical Mark’s Unbalanced Amendment

Nevada Congressional District 2 candidate Mark Amodei has another plank on his “tax platform” that deserves some more attention — he’s come out in favor of a balanced budget amendment.  If ever there were a litmus test for political and economic illiteracy this would be it.  It doesn’t take too much effort to understand why.

There are several versions of a BBA floating inside the Beltway, but the one closest to House Republican hearts comes from the Republican Study Committee.

There are inequitable provisions for applying budget cuts and closing tax loopholes and off-shore tax haven provisions.

“The RSC budget secures all of its deficit reduction through spending cuts and none through revenues; it cuts federal expenditures by more than $9 trillion over the coming decade, relative to a continuation of current policies.  To ensure that policymakers follow this cuts-only approach, the version of the constitutional amendment coming to the House floor requires supermajority votes of two-thirds of both the House and Senate to raise any taxes, which would make it virtually impossible to raise revenue.” [CBPP]

In other words, it would require a virtually impossible super-majority to cut taxpayer subsidies for major oil companies, or for deductions for vacation homes and private jets — but cutting benefits for veterans, the elderly, and children would be relatively simple.

Cuts required in the federal budget under the proposed balanced budget amendment would predominantly impact the American middle class.

“This is the part of the budget that includes veterans’ medical care, most homeland security activities, border protection, and the FBI.  It also includes education, environmental protection, protecting the nation’s food and water supply, and medical research, as well as services for disadvantaged or abused children, frail elderly people, and people with severe disabilities.”  [CBPP]

And, what do middle income Americans depend upon for law enforcement, veterans benefits, clean air and water, food inspection, student loans, medical research, and assistance for elderly or disabled family members?  “Non-defense discretionary programs.”

The proposed balanced budget amendment is simply not feasible.

“This plan moves the goal post for the coming debt ceiling debate so far to the right that Republicans have left the stadium. Short of eliminating every cabinet agency (the entire discretionary budget), drastically defaulting on our obligations to our citizens (Social Security, Medicare, and Medicaid), or defaulting on our obligations to our creditors, this plan simply is not feasible. Even if it were feasible, cutting $1.4 trillion in federal spending by 2016—when the economy is projected to just be returning to potential output and full employment—would be economically devastating. Budget process proposals are much easier to generate than budgets, but this one is totally detached from reality. ”  [EPI]

Under this proposal not even drastic cuts to Medicare, Medicaid, Social Security, and every cabinet level department of the United States would be enough to meet the balanced budget amendment’s requirements within the next 50 years.

The balanced budget amendment is unenforceable.

As previously suggested these kinds of political statements are easy to draft, but not so easy to implement.  Who determines if income equals outlays? During what time periods? Using what numbers?  Numbers based on what methodology? There are enough questions to render the implementation of the amendment subject to protracted litigation.   Those who are disturbed by the propensity of the courts to become involved in policy development should be positively hysterical at the prospect of a judicially driven budget process.

As if these reasons were insufficient, there’s more information about the ridiculousness of this “balanced budget amendment” ploy in a previous post.  That post contained an extensive list of “extra credit” reading.

Thus, what we have in Congressional District 2 is a Republican candidate delighted to proclaim his support for a policy which:  (1) Protects the tax havens, loopholes, and special provisions for the ultra-wealthy, while (2) Further impacting the already precarious finances of and support for the American middle class, and which is (3) unenforceable without significant judicial activism.

Worse still, it is close to being (4)  false advertising.  No, it won’t make the national budgets like the state ones, because the state ones still allow debts incurred for capital project investment.  And, no, it’s not like the family budget either — unless we’re speaking of a family that doesn’t take out vehicle, student, or car loans, and pays cash for all medical and educational expenses, and doesn’t put anything on a credit card.

It doesn’t deliver what it promises.  If any of its proponents have been lulled into believing that this balanced budget amendment would quickly and efficiently redirect and restrict government spending — they have the next 50 years to wonder what went wrong.

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