The New York Times reports today that a Balanced Budget Amendment is poised to get its first vote in both chambers since 1995, with a House vote next week, and a Senate vote expected soon after Thanksgiving.
Let’s pause, then, to note that this is still one of the worst ideas in the history of bad ideas.
In fact, Macroeconomic Advisers, which prepares respected, non-partisan economic analyses for the public and private sectors, reported yesterday that a BBA would do dramatic harm to the economy.
Macroeconomic Advisers writes that if a constitutional balanced budget requirement had been ratified in 2008 and took effect in fiscal year 2012, “The effect on the economy would be catastrophic.” If the 2012 budget were balanced through spending cuts, those cuts would have to total about $1.5 trillion in 2012 alone, which the report estimates would throw about 15 million more people out of work, double the unemployment rate from 9 percent to approximately 18 percent, and cause the economy to shrink by about 17 percent instead of growing by an expected 2 percent. [emphasis added]
Macroeconomic Advisers also found that the BBA would generate enormous economic uncertainty — a problem Republicans sometimes pretend to care about, would make all future economic downturns “deeper and longer,” and would “retard economic growth” even during normal conditions.
This comes soon after an analysis from Standard & Poor’s — which Republicans claim to want to impress — which also said the amendment is a very bad idea.
It won’t, but analyses like these should be a wake-up call to lawmakers who are on the fence about this constitutional monstrosity.
If nothing else, sensible lawmakers should realize that the country is facing real challenges, and wasting time on dangerous gimmicks is absurd. And even if we put aside the fact that there are problems that require immediate attention, and even if we ignore the proposal’s legislative prospects, the Republicans’ Balanced Budget Amendment is has no redeeming qualities.
In addition to all of the usual reasons a BBA is a tragic mistake, it’s worth reemphasizing a couple of related points.
First, the whole idea of the BBA is a cheap cop-out. Policymakers who want to balance the budget can put together a plan to balance the budget. It’s hard work, of course, and would require sacrifice and compromise, but those who take this goal seriously can put in the effort and craft a plan.
But they really don’t want to. Instead of drafting a plan to balance the budget, BBA proponents want a constitutional gimmick that will mandate a policy goal they can’t figure out how to accomplish on their own. That’s not responsible policymaking; that’s the opposite.
And in case this isn’t already obvious, even the point of this endeavor is misguided. Sometimes, running deficits is the smart, responsible thing to do, and to assume that the budget should always be balanced is fundamentally misguided.
What sensible policymakers should be doing is dismissing this “pathetic joke” of a proposal as quickly as possible. It’s policy madness.