I’m not impressed with Standard & Poor’s decision to downgrade U.S. debt as a matter of political punditry, but at least the agency knows better than to endorse the Balanced Budget Amendment (one of the worst ideas in the history of bad ideas).
House and Senate Republicans have rallied around the notion of a balanced budget amendment to the Constitution as a solution to the country’s dire fiscal straits. But over the weekend, the head of Standard & Poor’s sovereign ratings division dismissed the idea, arguing that it would be more harmful than helpful to the country’s creditworthiness.
“In general, we think that fiscal rules like these just diminish the flexibility of the government to respond” to crises, S&P managing director John Chambers told CNN’s Wolf Blitzer on Saturday when asked whether it’s important that Congress send a balanced budget amendment to the states in order to restore the country’s AAA credit rating.
The S&P official did not comment specifically on any of the various versions of the proposed constitutional amendment, but said the idea itself “would just reduce your flexibility in a crisis,” adding that there’s not much to be said for Congress “trying to bind itself with various rules.”
That’s really just the start of the problems with this proposed amendment, but I’m glad S&P noticed.
Indeed, John Chambers’ comments have some political relevance. In the wake of the downgrade, some of the less-sensible members of Congress have pushed even harder for the ridiculous idea, using the S&P’s analysis to justify the alleged need for the amendment. It helps to have an unequivocal assessment like “diminish the flexibility of the government to respond” to crises.
Also note, many Republican leaders, including Senate Minority Leader Mitch McConnell (R-Ky.), have prioritized lawmakers “impressing” Standard & Poor’s. Well, Mitch, S&P doesn’t want a balanced budget amendment.
With this in mind, maybe Republicans can drop the constitutional nonsense and work on meaningful economic policy for a change?
