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Just Sayin'

Paul Adair is a 21-year Germantown resident, retired scientist, writer, and lecturer.

We Don't Need An Amendment To Do the Right Thing

Taxes, Political, U.S., Wisconsin, Economy

The most important thing that happened in politics last week was the release of thousands of Kelly Rindfleisch e-mails. However, Walker's embarrassing ducking and dodging of media questions about the documents is well-covered, so I will not say anything further (at least this week) on the subject :)

However I do want to discuss two bills that passed the State Assembly last week and which will soon be up for a vote in the State Senate. AJR 81 calls for a convention to amend the US Constitution, mandating a balanced federal budget. An accompanying bill, AB 635, proclaims how the delegates to such a Constitutional Convention would be appointed and limits those delegates' freedom of action.

Article V of the US Constitution describes two ways that the Constitution may be amended. The first way, the way by which all 27 existing Amendments have been enacted, requires a 2/3 approval by the US House and the Senate, followed by approval by 3/4 (38) of the states. Normally, the state approvals are granted by state legislatures.

The second, untested way to amend the Constitution is to have the legislatures of 2/3 (34) of the states apply for a Constitutional Convention that would propose Amendments. Any Amendments coming out of such a Convention must then be approved by 3/4 of the states. This unproven method is currently advocated by Tea Party groups, as well as the right-wing ALEC organization, in an attempt to bypass the US Congress in implementing a Federal balanced budget Amendment.

I don't know anyone who believes that our country should run budget deficits in perpetuity. We should and must get our fiscal house in order. We know how to do it. We have done it within recent memory. We had our last balanced budgets in 1998-2001, under President Clinton. However, I question both the wisdom and effectiveness of doing it through a Constitutional Amendment.

It took gigantic and reckless tax cuts, two unfunded wars, an unfunded prescription drug program, and the housing crisis to get us to where we were in 2009 (Bush's last budget), with a record $1.4 trillion deficit. Since that time, an improving economy, repealing the tax cuts for income over $450k, fiscal restraint, and our exit from Iraq, have greatly improved America's budget picture.

In fact, the CBO projects that the 2015 deficit will be $478 billion, only 34% that of 2009, the last Bush budget. That is, the deficit for next year will be down by two thirds (66%) from that in 2009. But we can and should do better. During non-crisis years, we must live within our means.

We should not hold our military sacrosanct. Aside from the wars, the base defense budget has soared from $287 billion in 2001 to $530 billion in 2013 (up 85%!). We spend $ 682 billion/year on defense. That is 4.2 times that of the next highest spender (China) and 7.5 times that of the third highest (Russia). Surely, we can find some large savings in that humongous budget?

And US-based companies must help this budget crisis. The effective 2010 US corporate tax rate was only 12.6%. According to a USA Today study, 57 of the Fortune 500 companies pay no Federal tax. According to the Cato Institute, the US paid-out $92 billion in subsidies to corporations in 2006.

We must continue to increase our tax base by growing our economy. We must make wise investments in our technology base and in training our workforce. A reasonable increase in the minimum wage will remove many workers from assistance and increase our nation's tax revenue.

If it is not simply ignored by bookkeeping tricks, a balanced budget Constitutional Amendment would be catastrophic to our economy. Instead of gradually and wisely growing out of our problem, as we have been doing, it would impose immediate and drastic shocks to the nation. It would be a Sequester on a steroid overdose. Such austerity did not work recently in Europe and it won't work here.

In addition to these self-imposed financial shocks, a balanced budget Amendment would remove the flexibility that government has to even-out the economic cycle. We should run surpluses during good times and stimulate the economy during bad times. A balanced budget Amendment would force government to raise taxes and slash government at the worst possible time- during a recession.

An Amendment would cause problems when we are faced with war or major calamity. We should not be forced to cut seniors' SS checks to pay for clean-up of a new, New Madrid earthquake or a war with Moldova.

OK, so you are not convinced that Congress will continue on our current deficit-trimming path. You insist on having your little Convention to institute your ruinous Amendment. Why stop there? There are many potential Amendments to the Constitution that make more sense. These should also be introduced for consideration at the same Convention. Some of my favorites:

The right to a living wage.  Corporations are not people and money is not speech. Access to health care as a basic human rightThe right of workers to collectively bargain shall not be abridged.  Update the 2nd Amendment.  No undue burden can be put on people exercising their right to vote.  The right of consenting adults to marry whoever they want to.  States must conduct redistricting by an independent and non-partisan board.  Allow Encourage Texas to secede.

A Constitutional Amendment for a balanced budget is a well-meaning and naive dream, with probable dire consequences for our economy. Instead of allowing us to gradually grow out of the deficit problem, it would impose an austerity death spiral. Rather than adding a new Amendment, we should re-evaluate the policies that got us here in the first place. We should support politicians who will increase revenues, trim the enormous military budget, cut corporate welfare, and promote economic growth policies.

 

 

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