Between yesterday’s stock market nose dive and today’s jobs report that shows the labor market is barely treading water, its undeniable that the economy is in a precarious position. A report earlier this week by analysts at JP Morgan showed that federal fiscal policy is actually going to retard growth through the next year, and the Federal Reserve seems unwilling to approve any additional measures to boost job creation.
With that in mind, job creation should be foremost on the minds of Washington policymakers. However, it seems that House Speaker John Boehner (R-OH) has other plans:
In a meeting with his conference on Monday, Speaker John A. Boehner told members that the best thing they could do during the August recess was to sell their constituents on the idea that the amendment — which essentially stipulates that government cannot spend more than it takes in — is necessary and good.
Republican leaders on the Hill have pivoted from railing against Democrats about tax increases to pressing for the amendment, which would require the acquiescence of two-thirds of each chamber of Congress, and three-quarters of state legislatures. They point out that such a measure passed the House in 1995, but then failed in the Senate by a single vote.
Even though the GOP never even held a vote on a balanced budget amendment when it controlled both houses of Congress under President George W. Bush, it has now become obsessed with the BBA, demanding a vote on it as part of the deal to raise the debt ceiling. And evidently, the August recess will be spent trying to drum up the political support to make that vote a success.
As we’ve noted over and over again, a balanced budget amendment would force the government to actively make economic downturns worse, by cutting back on spending precisely when the economy needs it most. In a letter to Congressional leadership, five Nobel Prize-winning economists wrote that “a balanced budget amendment would mandate perverse actions in the face of recessions,” adding that the BBA would prevent federal borrowing to finance investments into infrastructure, education, environmental preservation, and other areas “vital to the nation’s future well-being.”
So instead of thinking of ways to alleviate the suffering of those coping with the current weak economy, Republicans are going to spend the rest of the month trying to sell a policy that will make future downturns even worse.