A balanced budget amendment, like the one recent endorsed by the entire Republican Senate Caucus, sounds like the perfect antidote to our deficit crisis. It's not. Bruce Bartlett destroys the idea here.
The way I see it, the goal of fiscal solvency is to grow the economy faster than we borrow. We can do that with small deficits, and we should. Indeed, one reason why so many economists supported the Bush tax cuts in 2001 was that it wasn't advisable for the U.S. to run consistent surpluses (as we were doing in the late 1990s) by collecting more taxes than we need to pay for Medicare, Defense and the rest of the government. Small doses of deficit, like small doses of Aspirin, can be good for us. It's the overdoses that get us into trouble.
Balanced budget amendments are silly distractions. The latest Balanced Budget Amendment, supported by every Senate Republican this week, would cap total spending at 18 percent of GDP, even in recessions, and require a two-thirds majority to pass any tax increases. This plan is worse than silly. It is, as Ezra Klein rightly notes, dangerous and delusional.
Not a single year of the Bush administration would qualify as constitutional under this amendment [all deficits]. Nor would a single year of the Reagan administration [all deficits, and he technically raised taxes in 1986]. The Clinton administration would've had exactly two years in which it wasn't in violation [but he raised taxes in 1993, too].
Read that again: Every single Senate Republican has endorsed a constitutional amendment that would've made Ronald Reagan's fiscal policy unconstitutional. That's how far to the right the modern GOP has swung.
Four months ago, Sens. Tom Coburn and Mike Crapo approved the deficit commission's plan to delay deficit reduction for a year (to give the job market time to recovery) and phase in gradual tax increases and spending cuts over the next 10, 20 ... 50 years. Now they've apparently signed onto an amendment that makes tax increases more or less impossible and would require the government to shrink by 33 percent in five years. Frustrating.
To be fair, the best that can be said of the Senate Democrats in the budget debate is that thirty of them signed a letter asking the president to give them the green light to pass a law on the budget and released it to the press as though it were some kind of heroic gesture. This was a bit like an accountant asking for permission to do a great job on your taxes and demanding a bonus for his thoughtful outreach. You don't get brownie points for asking somebody to give you permission to do your job.