Saturday, April 02, 2011

Bad All Around


There must be an explanation somewhere. Somewhere.

But what could be the explanation for the apparently imbecilic balanced budget amendment (text here) 47 Republican Stepfords have introduced in the U.S. Senate.

If one is to believe economist Bruce Bartlett and political scientist Jonathan Bernstein, it is probably due to ignorance. Section 1 reads

Total outlays for any fiscal year shall not exceed total receipts for that fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific excess of outlays over receipts by a roll call vote.

But in criticizing the ever-pandering presidential candidate Tim Pawlenty for refusing to specify spending cuts and merely endorsing a balanced budget amendment, Bartlett notes that

for such an amendment to be operational and not just a meaningless expression of intent then there has to be a point in the budgetary process where the federal courts can enjoin spending or force tax increases. This is obviously a very bad idea in principle, but it’s also impractical. For example, as a legal matter we would have no way of knowing that the budget was in fact unbalanced until the fiscal year had ended, but even a federal court can’t make people give back federal funds that have already been paid out for interest on the debt, Social Security and Medicare benefits, wages and salaries, payments for goods and services etc. Thus a balanced budget amendment of the sort Pawlenty proposes is effectively unenforceable.

Not only can it not be enforced, but it probably cannot be implemented. Bernstein finds

there’s nothing here (or in the rest of the resolution) to force Congress to actually take any actions. Congress doesn’t pass a law every year specifying total receipts and total outlays; at best, it passes a non-binding budget resolution, but everyone who follows budget politics knows that the numbers in the budget resolution have no fixed relationship to what Congress eventually does that year (which, in turn, has only minimal effects on actual government revenues and expenditures, most of which are not affected by what Congress does).

In other words, there is simply nothing in this amendment to force Congress to do anything about deficits.

If the amendment was law, Congress could simply continue to pass annual appropriations bills, and....well, there is no "and." What it amounts to in practical terms, as far as I can see, is a statement of principle; we might as well put in the Constitution that global warning is a hoax and evolution a communist plot, for all the good any of it would do.


Bartlett explains

The gross domestic product is not a concept defined in law and is revised constantly; from time to time, the Bureau of Economic Analysis revises the GDP data all the way back to 1929. And of course, the 18 percent figure is totally arbitrary; the proposal effectively assumes that most federal outlays consist of funds that are appropriated annually, rather than of mandatory programs such as Social Security, Medicare and interest on the debt. Even if Congress was willing to cut mandatory spending, it is practically impossible to do so quickly unless it is willing to reduce the monthly checks going to current retirees and other actions difficult to contemplate.

Section 2 of the proposal reads

Total outlays for any fiscal year shall not exceed 18 percent of the gross domestic product of the United States for the calendar year ending before the beginning of such fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific amount in excess of such 18 percent by roll call vote.

Invoking gross domestic product as a baseline is faulty, Bartlett argues in a separate blog posting, because

The gross domestic product is not a concept defined in law and is revised constantly; from time to time, the Bureau of Economic Analysis revises the GDP data all the way back to 1929. And of course, the 18 percent figure is totally arbitrary; the proposal effectively assumes that all federal outlays consist of funds that are appropriated annually, rather than consisting primarily of mandatory programs such as Social Security, Medicare and interest on the debt. Even if Congress was willing to cut mandatory spending, it is practically impossible to do so quickly unless it is willing to reduce the monthly checks going to current retirees and other actions difficult to contemplate.

An amendment which cannot be enforced or implemented and whose numbers don't add up without "actions difficult to contemplate" evidently is worthless but relatively harmlesss.

But no. The measure reflects ignorance and pandering to the ultra-far right of the far right of the party but also a sprinkling of nefariousness. Bartlett notes rests on the assumption that federal outlays "consist primarily of mandatory programs such as Social Security, Medicare and interest on the debt." While the GOP will not push to pay back a portion of the debt, it may not be so "difficult to contemplate" that it will move to "reduce the monthly checks"- or worse. On March 29, House Majority Leader Eric Cantor told NPR

I mean, just from the very notion that it said that 50 percent of beneficiaries under the Social Security program use those moneys as their sole source of income. So we've got to protect today's seniors. But for the rest of us? For - you know, listen. We're going to have to come to grips with the fact that these programs cannot exist if we want America to be what we want America to be.

The Majority Leader, second in command to a Speaker who may face a primary challenge from a tea party candidate, now is on record as supporting the abolition ("cannot exist") of Social Security and Medicare- assuming he wants "America to be what we want America to be."

The proponents of this constitutional amendment may be silly, reckless, and out to destroy the nation's elderly. Impressively ambitious.



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