Home 2018 Elections The GOP Balanced Budget Amendment: Hypocrisy & Poor Economics

The GOP Balanced Budget Amendment: Hypocrisy & Poor Economics

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by John Suddarth

I’m a Congressional candidate in VA-01, a Progressive in favor of Single-Payer & investment in Education, Infrastructure & action on Climate Change.  I’m also a Fiscal Conservative with a real plan to lower deficits– not a deficit chicken-hawk like my Republican Opponent Congressman Rob Wittman

This past week the Republicans in the House voted for a balanced budget amendment to our Constitution that – were it to pass – would limit the country to spending only as much revenue as it takes in each year.  While it might sound good to those who prefer bumper stickers and slogans to process and policy, all republicans know this proposed constitutional amendment has virtually zero chance of passage.  But actually amending the Constitution is not their objective.  Their goal is to throw enough smoke into the air that people ignore their total lack of responsibility in managing our federal budget.

Before we talk about the GOP’s mismanagement of the Federal budget though, let’s first discuss basic economic theory—something you and I already know because we live in the real world outside the GOP bubble. The government would be dumb to limit its total spending to current revenues.  It’s absolutely amazing to me that republicans, members of the supposedly fiscally responsible “business” party, do not understand the difference between expense and investment—something any college freshman learns in Econ 101.

Most of us borrow to invest in our homes and in ourselves. How many Americans do you think paid cash for their homes with one year’s income?  Or for their cars?  Or for their technical schooling or college education?  Not only is it OK to borrow to invest in long-term assets, it’s smart to do so.  We should not borrow to pay for entitlements or non-revenue producing assets like the military.  These in fact should be paid for out of current revenues.  It makes perfect sense however to borrow to invest in our infrastructure and in our citizens.

What has been the payback on the Golden Gate Bridge, universal secondary education, our electrical grid, our Interstate Highway System, or the GI Bill?  Immeasurable. These intelligent investments made during the 1930’s through 1960’s are what once created the world’s largest middle class and most vibrant economy. We should have done the same thing after the Great Recession of 2008:  borrowed money at the lowest interest rates in history and fixed our crumbling infrastructure.  This would have put Americans back to work and it’s what President Obama and the democrats wanted to do but the republicans blocked it. Terrified of deficits—unless they’re the ones creating them—and incapable of discerning the difference between spending and investing, the GOP blew one of the biggest opportunities for our country in our lifetimes.

The Federal government can borrow money at very low interest rates and invest in our infrastructure and people, greatly increasing our economic potential. In fact by not investing and by giving budget-busting tax breaks to the wealthy and businesses instead, we run a real risk of economic growth outpacing GDP capacity, resulting first in a bubble economy like in 2007 and 2008, and then another huge GOP-caused Great Recession.  This is actually what I expect will happen if the democrats don’t win in November and stop this runaway Trump train, the Deficit-Express.

Remember, these are the same economically clueless republicans who passed a massive tax bill last fall that is heavily tilted in favor of the wealthy, the Bi-partisan Budget Act of 2018, and the Consolidated Appropriations Act.  The non-partisan Congressional Budget Office estimates these three pieces of legislation, each signed into law by President Trump, will result in a $2.7 trillion increase in the federal deficit through 2027, and much greater risk of higher interest rates and inflation.

https://www.cbo.gov/publication/53651

If the Republicans actually cared about the budget deficit they wouldn’t have lowered the top tax rate on the very wealthy from 39.6 per cent to 37 percent; this increased the deficit by $139 billion. Many of the wealthy will actually see their tax rate on pass through income drop to 21%.  If the GOPers really cared as much about deficits as they do about contributions from their wealthy donors, they would not have drastically cut the alternative minimum tax for high earners, increasing the deficit another $429 billion.  They also could have ended the carried-interest loophole that benefits wealthy hedge fund managers; this increased the deficit another $12 billion but who would do that to their favorite campaign-funders?  And they would not have eliminated the estate tax on the super rich, increasing the deficit yet another $83 billion and creating a permanent über-class.

To make matters worse, these Republicans – in charge of both chambers of Congress and the White House, could not even pass a budget until February—four months late.   This spending bill should have been passed last September. If they hadn’t passed the bill Trump signed while complaining “I will never sign another bill like this again. I’ll never do it again. Nobody read it. It’s only hours old,” we’d have had yet another government shut down.

Instead of just passing omnibus spending bills at the last possible moment with across-the-board increases in all programs, Congress should actually consider what programs are working and which are not and what our current needs are, and then pass a budget consistent with expected revenues and objectives.  I can assure you a budget properly passed would have a totally different set of priorities—priorities that benefit citizens and not special interests and not cost what we’re spending now.

But in the height of hypocrisy—maybe we should start calling it “GOPocrisy”– House republicans pushed this sham piece of legislation calling for a constitutional amendment requiring a balanced budget. An amendment to the constitution would have to be approved by a 2/3 vote in the house and 2/3 in the Senate and then be approved by 38 of the 50 states.  This sham legislation couldn’t even get the 2/3 vote it needed to pass the House.

The Republicans control the House, the Senate and the White House.  If they really wanted a balanced budget, they have the power to do it.  Instead they prefer grandstanding to governing.

I am a progressive congressional candidate for Virginia’s First District. I’m running against Rob Wittman.  He has rubberstamped all three of these terrible bills.  My policies would not only provide universal single-payer healthcare, investment in education and infrastructure, and action on climate change but actually lower federal spending.  You won’t find a true fiscal-conservative in the GOP, but you’ll find one right here.  It’s time for a change.