Monday, July 18, 2011

Balanced Budget Amendment and Taxes

As stated in recent articles, I strongly support a Balanced Budget Amendment to theConstitution, so long as it has a SPENDING CAP in it (18% of GDP being about as high as I would go). I will cheer if Republicans were abele to pull it off. And I will CONDEMN Republicans--not cheer them for trying--if they fail to pull it off after putting all of their eggs in that FANTASY. That smacks to me of fraudulent "politics as usual". Why do I call it a "fantasy". Read my articles. It takes a 2/3 vote to get a Constitutioinal Amendment through Congress, of both houses. That strikes me as impossible, in the current Congress, AND it strikes me as somehthing over which Republicans are unlikelyl to fight to the end ("the end" being refusing to raise llthe debt ceiling, and enduring weeks of the government not being able to borrow any more money, which will require a 40% cut in the Federal Government). I would be willing to go to those lengths to CUT PRESENT SPENDING (although I doubt the will of Republicans). I just don't see it happening overf a Balanced Budget Amendment that wold not go into effect for 8 years or more, and would have to be ratified by 3/4 of the states. More power to Republilcans if they prove me wrong--especailly snce I an never wrong. You can see, however, that the odds are against them. (me, WRONG!!!! Not going to happen.) Again, NO credit for playing "politics as usual", when you have no intention of really following through.


I would not support a Balanced Budget Amendment without a spending cap. However, I question inserting a TAX provison in a "Balanced Budget Amendment". Right now, Republicans have inserted aprovision that it would require a 2/3 vote of both houses to raise taxes. If you have a spending cap, which is necessary to keep the "balanced budget" part from becoming a fraud, I see no purpose to the attempt to control future taxes in the Constitution. In one of those cable TV interviews with a Republican and a Deomocrat, the ONLY criticism the Democrat had of the Amendment was that it is wildly unfair to make it easier to balance the budget by Medicare cuts than by raising taxes. I actually thnk he has a good point. What do TAXES have to do with either a balanced budget or a spending cap? So long as there IS a spending cap, the CHOICE of what mix of policies to use to comply with the Amendment seems to me to be a POLICY decision that should be up to Congress. You only have to look at the preent arguments to understand why. Is it "raising taxes" to "cloe loopholes"? What about eliminating a PAYMENT, such as the earned income tax credit? What about eliminating a deductioin that no longr makes any sense? You just don't need thee arguments as to what is and is not a "tax" as part of CONSTITUTIONAL LAW. If Congress can stay within spendnig limits, the choice of how to balance the budget should be up to Congress. I, personally, would go so far as to favor not even having the "balanced budget" part (although that is what is politically popular and easy to understand0, and just have the spending limit, WITH TEETH. (I have suggested that if an "emergency" is decleared, even with a 2/3 vote, that the entire Congress declaring such an emergency not be allowed to stand for reelection when the term of each member is up, whehter the member voted for waiving the limit or not.)


Don't I realize that the Democrat I heard opposes a spending limit just as much as he opposes a 2/3 vote requirement for a tax increase? Yes, I do. But the difference is that he is right on the tax increase unfairness, and wrong on the spending limit. To require every "adjustment" of the tax code to have a 2/3 vote is hard to defend. Now it would be too much to say I would OPPOSE such a requirement, if I thought it was easy to passs it. I would have to think about that. This constant TINKERING with the tax code is a major problem. Certainty that taxes will not be raised has great value. But it still makes no sense, theoretically, to take all flexibility away from Cnogress on taxes--especailly given the inherent ambiguity of exacthly what is a tax increease and what is not.


In short, if I were a Republican "leader", and really WANTED this Balanced Budget Amendment to pass, I would delete the 2/3 vote requirement on tax incrfeases. No, if yu have not guessed, I don't think that a lot of Republican leaders WANT a Balanced Budget Amendment to pass (not one with teeth, anyway--even the safeguards against waivers in the present Republican draft). I am morally certain that EVERY Republican leader doe not expect a Balanced Budget Amendment to actually pass unless it is gutted into uselessness. These kind of games are what may yet push the Republican Party to extinction. But if Republicans are serious about the Balanced Budget Amendment, they need to forget about trying to use it to push their policy on TAXES.


What about the argument that there is no way for us to have expanded Medicaid, ObamaCare, expoloding Medicare, and other "entitlements", and keep the government at the 40 year average for a percentage of GDP? Yu know the answer to that one. We just CAN'T HAVE all of these massive, out of control programs and keep the things that made this country great (including a limited Federal Government that is not out of control). We need to start with ObamaCare, which alone will destroy this country as we once knew it. We MUST learn to control Medicare and Medicaid, or those programs will destroy us. We have something like 60 TRILLION dollars in "unfunded liabilities" with Medicare and Medicaid (not sure whether ObamaCare in there too, although my impresson was that this just applies to Medicare and Medicaid). Nope. If ew can't keep a program within that 28% limit on spending, then we need to reform the program. Once we accept the idea that there is a "new normal" (like Obama apologists like to asssert on unemplyment, even though BUSH managed to get us to 5% unemplyment), and that the Federal Government can't possibly limit itself to a certain percentage of GDP, then we are DOOMED. The Federal Government will inevitably grow to consume our entire economy, and ur entire lives.


Bottom line: I don't thik a Balanced Budget Amendment, with a spending cap, is going to happen. And I will BLAME Republicans for making it a keystone of the debt ceiling fight, if they do not make it happen (at least to the point of actually going past the debt ceiling deadline). That smacks to me of "poliltics as usual": propose something you know will not happen for political points. If Republicans are serious about it, they should DELETE the requirement of a 2/3 majority on raising taxes. An effective Balanced Budget Amendment, with spending cap, may well be necessary to sAVE this country in the form it was intended to be, and once was. But it is absurd to say that it represents an IMMEDIATE "solution" to our defict and debt problem. By the time a Balanced Budget Amendment will take effect, especailly with that 5 year delay that is in the Amendment (to my understanding), our deficits and debt may have already destoroyed us. That has nothing to do with whether we SHOULD pass a Balanced Budget Amendment. But it does have something to do with whether we should GTE SERIOUS abut CUTTING SPENDING NOW. Republicans have proposed "cutting" 111 billion or so from this coming year's spending. That is not nearly enough. It may, of course, emphasize how important an Amendment is, if we can only survive until the Amendment goes into effect.


Will I be wrong (say it ain't so!!!!) about cynical Republican politicians and the Balanced Budget Amendment? Will Republicans ultimately BETRAY me--and you? Stay tuned, as this soap opera(or farce?) continues.


P.S. No proofreading or spell checking (bad eyesight). By the way, will 3/4 of the states really support a Balancced Budget Amendment if they look at the Federal Government being properly required to pass a lot of expeenses and responsibiity back to them, with no chance that the Federal Government will have the ability to bial the states out? I wonder. It might happen, if the peole force it on reluctant politicians. It is not a slam dunk. And look what happens if we do manage to pass a Balanced Budget Amendment--proving me wr...rr...ro...wron.......--sorry, can't gt the word out), and declare the debt "crisis" "solved"? Then we merrily spend away at the same 25% level of GDP that we are now approaching. Can you imagiethe SHOCK when we suddently have to balance the budget, and immediately revert to 18% of GDP? There is no sbustitute for CONTROLLING SPENDING NOW--Balanced Budget Amendment or no Balanced Budget Amendment.

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