Wednesday, October 5, 2011

Balanced Budget Amendment – look past the title says Rep. Bobby Scott

Virginia Congressman Bobby Scott

“Just because you name it the ‘balanced budget amendment’ doesn’t mean that it makes any sense,” said Virginia Congressman Bobby Scott in a phone call Tuesday. He had just come from a hearing of the House Judiciary Committee on the bill sponsored by 6th District Congressman Bob Goodlatte.

Virginia Rep. Bobby Scott Ranking Member of the Crime Subcommittee on the House Judiciary Committee said the amendment, H. J. Res. 1, “puts Social Security and Medicare at serious risk.” Scott elected in 1992 represents the cities of Portsmouth, Norfolk, Richmond and counties of Henrico and Prince George.

In H. J. Res. 1 a “super majority” (2/3 in both Houses) vote is required to increase revenues and raise the debt limit. It further restricts debt to be no more than 18% of Gross Domestic Product (GDP) in any given year. Only a simple majority vote (over ½ in both Houses) would be required to cut spending. This would leave open the door to cut Social Security, Medicare, and create special interest tax loopholes according to Scott.

“Not since Medicare was adopted has the GDP been at or below 18%,” said Scott. Debt stands at 40% of GDP today. “You’re going to have to cut [Social Security] because you’re not going to be able to raise taxes,” he said.

The question Rep. Scott says that should be asked is “will it help or hurt the campaign to get to a balanced budget.” The provisions that make up the bill are overlooked.

“Most people are mesmerized by the title,” said Scott. The first provision requires a 2/3 vote on a budget that is not even in balance he explained. To have a serious deficit reduction plan it should require a 3/5 vote not a simple majority to increase revenue. “Any serious deficit reduction plan has to have some path to get to balance … the idea that you can get to balance in one year is politically absurd,” he said.

Forty-nine out of 50 states are said to have a balanced budget amendment in their constitution. At Tuesday’s hearing he asked Governor Dick Thornburgh of Pennsylvania what in the bill would balance the budget. Scott said, “all I got [from him] was mumbo and a couple of things that weren’t even in the bill.”

“No states have the provisions of H. J. Res. 1 [in their constitution],” said Scott. No state has the provision requiring passage of a budget by 2/3 vote, nor a cap of 18% of GDP. “If a state calls out the National Guard it doesn’t say you don’t have to balance the budget.”

There is a provision in H. J. Res. 1 that allows ignoring the budget and debt limit with a declaration of war, a conflict or any other emergency.

Scott joked saying you could invoke the “two-bit’ dictator awareness act” and drop a bomb on him for an excuse to override the budget.

“For the last 50 years we have been in some kind of conflict. So the whole thing is nonsense,” said Scott.

“We were still cutting taxes during the middle of the war,” said Scott of the Iraq and Afghanistan wars. People are just now noticing the trillions of debt. “What you need is to just tighten up and just do it,” he said.

He saw no rationale either in requiring a 3/5 vote to raise the debt ceiling and risk another downgrade.

The balanced budget title “is like a psychotic drug … you make zombies out of people by reciting ‘balanced budget amendment’ over and over. People don’t read anything more,” said Scott. He joked saying, “you know [the BBA] will cure cancer too.”

The Bush tax cuts added $800 billion to the deficit over two years. In comparison to the general funds of all 50 states combined that comes in much less at $650 billion. “In one vote we cut $800 billion in taxes over two years. You can’t cut that and not notice it,” said Scott.

If you take $400 billion a year [eliminating the Bush tax cuts] and multiply it by 10 years you get $4 trillion in deficit reduction – the high end of the ultimate goal for deficit reduction. Scott mused at the simplicity of doing this one thing.

Polls indicate the public agrees that raising some revenue is necessary to balance the budget. Scott replied,” if you think they agree now you wait until people notice that we’re going to be cutting Social Security and Medicare in order to preserve the tax cuts.”

“Every bill being proposed requires a 3/5 vote to pass the budget. “You can’t hardly get a simple majority to go for serious deficit reduction – you’ll never get 3/5 … adding insult to injury the bills require a 2/3 vote to raise taxes,” said Scott.

The first trillion dollars of spending cuts that have already passed “will shock people” he said. The 12-member super committee will cut another $1.5 trillion and it will have to come from Social Security and Medicare explained Scott.

He compared that to the $4 trillion that could have decreased the debt if the tax cuts were allowed to expire. States will feel major damage to Medicaid. California is in court now over cutting Medicaid. Doctors will stop taking skimpy Medicaid and Medicare payments and accept only patients with private insurance.

Virginia Governor Bob McDonnell has already warned agencies to brace for cuts to education and Medicaid in anticipation of the trillions in federal funding cuts.

Once you debate the title [Balanced Budget Amendment] the threshold question is whether or not this actual legislation – not theoretical legislation – not “magic wand” legislation – but H. J. Res. 1 will it be helpful or counter productive in the goal to balance the budget. People don’t realize that it won’t actually result in a balanced budget said Scott.

Politicians including Democrats are looking to see where the public stands before voting on a balanced budget amendment. “You’d get a different answer if you asked people to support a balanced budget amendment that had no chance of balancing the budget,” said Scott.

Some opponents of the bill will try to explain the details of the amendment “hoping that the public will understand,” he said. Simpleminded rhetoric and slogans win public support, said Scott sadly. Jumping on a 70-30 split will get you booted out of office. “I don’t know what being on the long end of a 70-30 split looks like,” he chuckled.

As political experts say though, “when you’re explaining you’re losing … it’s a lot of work trying to explain stuff,” said Scott.

On this one Scott says he “has faith that the public will find out and I plan to help them find out …I’m going to do what makes sense and explain it and trust the people to figure it out.

Scott thought a better way to go would be to specifically exclude Social Security and Medicare in a provision in the bill and address it separately later. One way to save social security is to increase the cap on Social Security taxes to $200,000 or more.

The bottom line is that the public will realize that with this bill you are going to preserve the Bush-era tax cuts by cutting benefits to Social Security and Medicare according to Scott. People will begin to notice too as cuts come to health centers and public safety in order to preserve tax cuts for millionaires.

When asked what he thought the Senate would do if passed in the House he said jokingly, “you don’t have any profiles in courage over there.”

Scott thinks the same pressure will be on the 38 state legislatures when it comes to ratifying the amendment. None of the provisions in H. J. Res. 1 are in any of the states balanced budget amendments or statutes.

Scott mentioned how well the states did balancing their budgets with stimulus funds. Arizona balanced their budget with $6 billion in stimulus money and sold their state capital building and Supreme Court building … “give me a break,” said Scott. “What would [Arizona} have done without the $6 billion in stimulus,” he asked.

A vote on a balanced budget amendment must occur by December 31, 2011. Scott thinks there is a “reasonable chance that H. J. Res. 1 will pass.

Posted By Valerie Garner

Categories: Finance, National, Politics

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Comments (1)

Jack Mcguire

October 5th, 2011 at 12:16 PM    

I don’t think that getting to a balanced budget in a year is absurd..we are talking about a govt. that pays $400 for a hammer and $15 for a muffin.But if they wanted a few years to implement the BBA, I wouldn’t be against it.

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