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NEWS FLASH

GOP’s Job-Killing Balanced Budget Amendment Fails In House | The latest Republican budget gimmick — a radical Balanced Budget Amendment that would actually kill 15 million jobs — failed to garner the necessary two-thirds majority it needed to pass the House today, failing 261-165. Four Republicans — Reps. Paul Ryan (WI), Justin Amash (PA), Louie Gohmert (TX), and David Dreier (CA) — voted against the amendment; 25 Democrats, most presumably from the conservative Blue Dog Coalition, voted in favor. The amendment needed 290 votes to pass. The amendment actually gained less votes than it did in 1995, when 300 House members voted in its favor.

Update

The 25 Democrats who voted in favor of the amendment were: Jason Altmire (PA), John Barrow (GA), Sanford Bishop (GA), Dan Boren (OK), Leonard Boswell (IA), Dennis Cardoza (CA), Ben Chandler (KY), Jim Cooper (TN), Jim Costa (CA), Jerry Costello (IL), Henry Cuellar (TX), Peter DeFazio (OR), Joe Donnelly (IN), Kathy Hochul (NY), Tim Holden (PA), Jay Inslee (WA), Ron Kind (WI), Larry Kissell (NC), Dan Lipinski (IL), Dave Loebsack (IA), Jim Matheson (UT), Mike McIntyre (NC), Collin Peterson (MN), Mike Ross (AR), Heath Shuler (NC). A full roll call vote is here.

NEWS FLASH

Key GOP Committee Chair To Vote Against Balanced Budget Amendment | Rep. David Dreier (R-CA), chair of the powerful House Rules Committee, announced today that he would vote against the proposed Balanced Budget Amendment. Although Dreier supported a very similar amendment in 1995, he now believes that decision was an error. “I was wrong,” Dreier said. “Two short years later, we balanced the federal budget. . . . [W]e were able to balance the federal budget without touching that inspired document, the U.S. Constitution.” Dreier is likely to retire after this term due to a redistricting map that makes his reelection bid much more difficult. Regardless of why he decided to break with his party on this vote, however, he made the correct decision. Balancing the budget immediately through spending cuts, as congressional Republicans suggest, “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.”

Justice

The Balanced Budget Amendment Isn’t Just A Terrible Idea, It’s A Terrible Idea For Conservatives

Later today, the House is expected to begin debate on a balanced budget amendment, with most of the amendment’s supporters hoping that it will impose sweeping and permanent austerity upon the United States. As ThinkProgress reported, if this amendment actually succeeded in balancing the budget entirely through spending cuts, it 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.” In other words, America would almost instantly suffer consequences that rival the Great Depression.

Yet, for those of us who are still old enough to remember when conservatives feared “activist judges,” the right’s recently invigorated obsession with writing fiscal policy into the Constitution is nothing less than bizarre. As Neil Kinkopf, a former constitutional advisor to the Clinton and Obama Administration explains, the most likely way to enforce this kind of amendment would be by requiring judges to strike down budgets that aren’t balanced — placing our fiscal policy in the hands the public officials who are least suited to make such decisions:

Our independent federal judiciary is highly skilled at deciding legal questions. It is not at all competent to make decisions of a political or policy nature. Judges are not, generally speaking, trained in matters of economics or finance. They have no special competency that would recommend committing such decisions to them. . . . Finally, legislators are politically accountable for their decisions. Judges are not and should not be. Decisions regarding how to achieve a balanced budget are precisely the type of decisions that involve will and not judgment, to use Hamilton’s phrase, and so should be made by accountable officials rather than judges.

Don’t trust former Clinton and Obamaistas? How about Robert Bork, the failed Supreme Court nominee who became the centerpiece of the legal conservative movement’s persecution complex? Here’s what he had to say about balanced budget amendments:

Also troubling is the problem of enforcing such a constitutional provision. In the early stages of discussion, a lot of people, including most economists, apparently thought this was no problem: if Congress exceeded the constitutional limits on spending, someone would sue. That much is true. The result, however, would likely be hundreds, if not thousands, of lawsuits around the country, many of them on inconsistent theories and providing inconsistent results. By the time the Supreme Court straightened the whole matter out, the budget in question would be at least four years out of date and lawsuits involving the next three fiscal years would be slowly climbing toward the Supreme Court.

Bork, of course, is right to be worried about the judiciary’s unfitness to balance the budget. If the Supreme Court strikes down the 2014 budget in 2016, what happens next? Does the government have to take back the money it already spent, and if so, how? And what does this do to America’s credit rating if every bill sent to the federal government is subject to reexamination by nine judges in black robes?

But, none of this will probably bother the kind of conservatives who now dominate Congress. They were willing to push America to the brink of fiscal implosion during the debt ceiling fight earlier this year. Sen. Mike Lee (R-UT), a leading supporter of a balanced budget amendment, even admitted he wants America’s “house to come down” unless we agreed to his extortionist demand to rewrite the Constitution.

So conservative lawmakers have demonstrated time and time again through their actions that they don’t care one bit if their reckless tactics destroy the American economy. They have made absolutely clear, however, that they will never, ever vote to raise taxes on the rich, even though doing so is one of the least harmful ways to bring the budget closer to balance.

And that’s the real reason why conservatives in Congress would oppose the upcoming balanced budget amendment if they had any idea what it would actually entail — and it explains why the right-wing Heritage Foundation is already whining that this version of the amendment doesn’t do anything to save David Koch and Paris Hilton from paying more taxes.

NEWS FLASH

Hoyer Slams GOP’s BBA Effort: ‘You Don’t Need An Amendment’ To Balance The Budget | The same day conservative Blue Dog Democrats endorsed the job-killing Republican Balanced Budget Amendment, House Democrats led by Minority Whip Steny Hoyer (D-MD) pushed back against the plan and announced firm opposition. Hoyer, who voted for an amendment in 1995, is now “unapologetically whipping against the 2011 version,” which the House will vote on tomorrow. Asked if voting against the BBA would be tough for Democrats, Hoyer slammed Republicans who built up trillions in debt without paying for it when they controlled Congress, Politico reports: “It’s not a tough vote to pretend you’re going to go for a balanced budget by having something like that on the floor,” Hoyer said. “If you want to fight a war — pay for it. If you want to have a prescription drug program — pay for it. … You don’t need an amendment to do it.”

Economy

Blue Dog Democrats Endorse Balanced Budget Amendment That Would Double Unemployment, Gut Social Safety Net

Congressional Republicans are still trying to persuade Americans that they are focused on job creation, but each time they propose another piece of legislation, it is exposed as a gimmick that will do little, if anything, to create jobs. Such was the case with their anti-regulatory policies, their attempts to repeal health care reform, and virtually every other policy proposal they have brought forth.

Next up in that line, unfortunately, is a rehashed form of a radical Balanced Budget Amendment, a plan that according to recent analyses would actually cost America 15 million jobs. But thanks to the conservative wing of the Democratic Party, the Republicans won’t be alone in their chase for a radical budget amendment that could help push the country back into the throes of recession.

Despite the fact that House Minority Whip Steny Hoyer (D-MD) said yesterday he would encourage his party to vote against the radical plan, Blue Dog Democrats endorsed the amendment on a press call today, Politico’s Marin Cogan reported on Twitter. ThinkProgress confirmed that endorsement with a spokesperson for Rep. Mike Ross (D-AR), the Blue Dog Coalition’s co-chair for communications. According to the Hill, Ross said on the call that Blue Dogs favored such an amendment “before balanced budget amendments were cool”:

We were advancing a balanced budget amendment when balanced budget amendments weren’t cool,” a co-chairman of the coalition, Rep. Mike Ross (D-Ark.), told reporters on a conference call. [...]

If any Blue Dog does not vote for it, I’d have to question how much they’re a Blue Dog,” [Blue Dog Rep. Jim] Matheson [D-UT] said.

It’s hard to overestimate the negative effects such an amendment would have on the country’s economy. In addition to destroying millions of jobs, it would force such massive spending cuts that House Republicans’ own budget would be unconstitutional. According to a recent study by Macroeconomic Advisers, enacting a BBA now would double the nation’s unemployment rate and cause the economy to shrink by 17 percent — a far cry from the 2 percent projected growth that would occur with no such amendment.

Unfortunately, according to another analysis by the Center on Budget and Policy Priorities, the consequences get worse. The draconian budget cuts caused by a Balanced Budget Amendment would forice lawmakers to gut Medicare, Medicaid, Social Security, and the Children’s Health Insurance Program (CHIP), among other programs, the analysis found:

“The constitutional balanced budget amendment that the House is expected to consider this week could force Congress to cut all programs by an average of 17.3 percent by 2018.

“If revenues are not raised (the House-passed budget resolution assumes no increase above current-policy levels) and all programs are cut by the same percentage, Social Security would be cut $184 billion in 2018 alone and almost $1.2 trillion through 2021; Medicare would be cut $117 billion in 2018 and about $750 billion through 2021; and Medicaid and the Children’s Health Insurance Program (CHIP) would be cut $80 billion in 2018 and about $500 billion through 2021.”

In order to preserve those programs, Congress would have to cut ridiculously deep into every other program. Yesterday, economists around the country warned Congress that enacting widespread budget cuts and other austerity measures now would have perilous consequences for the American economy, pushing the country to the brink of a second deep recession. Today, unfortunately, Blue Dog Democrats decided not only to ignore those warnings, but to endorse an even bigger, deeper austerity plan.

Justice

Study: GOP’s Balanced Budget Amendment Would Double Unemployment Rate, Put 15 Million Out Of Work

In a week, the GOP will again vote on a Balanced Budget Amendment, the cockamamie economic proposal they have toyed with several times over the last several months, including during the debate over raising the debt ceiling. The vote is part of the final compromise to raise the debt limit, in which President Obama and Senate Democrats promised to hold a vote on such an amendment, despite the fact that such votes have failed numerous times in the past.

Republicans have taken to ignoring the obvious perilous consequences of the amendment even as voices on both sides of the aisle denounce it as the “worst idea in Washington.” The current amendment, former Reagan adviser Bruce Bartlett said, “looks like it was drafted by a couple of interns on the back of a napkin.” Today, the Center on Budget and Policy Priorities (CBPP) added to that criticism, releasing a study highlighting a piece from Macroeconomic Advisers that notes that such an amendment would make future recessions “deeper and longer” and saying that if a BBA had been enacted prior to the 2008 recession, the “effect on the economy” would have been “catastrophic.”

And according to CBPP, passing a Balanced Budget Amendment now, with the country trying to climb out of the hole of joblessness caused by the recession, would have the exact opposite affect one would expect policy makers to try and achieve. In fact, the budget cuts required by such an amendment now would double the unemployment rate and slide the country back into the throes of recession:

If the 2012 budget were balanced through spending cuts, those cuts would total about $1.5 trillion in 2012 alone, the analysis estimates. Those cuts 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.

That should be a reality check for Republicans who claim to be focused on job creation. Yet, despite evidence that the amendment would have disastrous consequences for our economy, Republicans — even those who pitch themselves as credible on the economy, like former Massachusetts Gov. Mitt Romney — continue to support it. Some even distort the past positions of Democrats to make it look like the proposal has bipartisan support.

In reality, such an amendment would only serve to exacerbate the very problems the GOP says it is trying to fix. And, as CBPP notes, the idea is utterly impractical: “[T]he only way to implement a BBA without some fiscal drag is to ratify it when the budget is in balance or surplus. Of course, then we wouldn’t have needed the BBA to achieve balance in the first place.”

Justice

Steve King Opposes A Balanced Budget Amendment Unless It Permanently Imposes Tea Party Policies On America

In an interview with conservative CNSNews, Rep. Steve King (R-IA) made a revealing claim. He opposes a balanced budget amendment that doesn’t also include draconian spending caps and a provision making it nearly impossible to raise taxes:

One of the reasons I voted “no” on the debt ceiling deal is because it was supposed to be an important lever for us to get a vote on a balanced budget amendment, but they did not have first a definition for a balanced budget amendment…[that] has a supermajority [to raise taxes] and an 18 percent GDP cap in it. [...] If we pass something out of the House that’s meant as a constitutional amendment that has no heat then we have no results then it will look like we are just posturing ourselves rather than actually fixing the problem.

Listen:

It’s hard to read King’s statement as anything less than an admission that he doesn’t really care whether the budget is balanced. In 1995, the House passed a true balanced budget amendment, which would have made it very difficult to enact an unbalanced budget. Had this actual balanced budget amendment been in effect in 2001, for example, the single largest driver of our present deficits — the Bush tax cuts — would have been unconstitutional. Likewise, the House GOP’s Medicare-killing budget that passed the House earlier this year also would fail under a clean balanced budget amendment because it fails to raise enough taxes to cover its costs.

Needless to say, congressional Republicans don’t like this outcome, which is why they are currently dressing up a Tea Party fantasy amendment in balanced budget amendment clothing. The so-called “balanced budget amendment” that King supports does far more than simply requiring federal spending to equal federal revenues. It makes it functionally impossible to raise taxes by imposing a two-thirds supermajority requirement — a provision closely modeled after the California anti-tax amendment that blew up that state’s finances. It would also require spending cuts so steep that it would have made Ronald Reagan’s fiscal policy unconstitutional.

Last month, Senate Minority Leader Mitch McConnell explained that he supports this Tea Party amendment because it eliminates the ability of something as silly as the American people voting for candidates who don’t want Tea Party fiscal policy from actually having an impact on national policy. Rep. King’s opposition to a clean balanced budget amendment is just one more admission that Congressional Republicans don’t actually care a bit about balancing the budget — they just want to use the American people’s legitimate anxiety over our long term deficits to permanently enshrine a comprehensive Tea Party agenda in the Constitution.

Justice

S&P Director: GOP’s Balanced Budget Amendment Would Hurt America’s Creditworthiness

After the first round of the contentious debt limit fight, congressional Republicans are redoubling their efforts to push through a so-called Balanced Budget Amendment as a solution to the country’s financial woes. Last week, Speaker John Boehner (R-OH) told GOP House members that the best thing they could do during the August recess was to sell the BBA to their constituents. Republicans have even suggested that Standard & Poor’s recent downgrade of U.S. debt from its sterling AAA rating would not have happened, or could be reversed, if a Balanced Budget Amendment were passed.

This weekend the head of S&P, John Chambers, publicly dismissed that idea as foolhardy when he said passage of a BBA would hurt, not help, America’s creditworthiness. Chambers, S&P’s managing director, told CNN’s Wolf Blitzer that a balanced budget measure “would just reduce your flexibility in a crisis”:

BLITZER: Would it be important or not that important for Congress to pass a Balanced Budget Amendment to the Constitution?

CHAMBERS: In general, we think that fiscal rules like these just diminish the flexibility of the government to respond. Also, when Congress has a long track record of trying to bind itself with various rules…But when push comes to shove, they don’t bind very much. So even if you had a Balanced Budget Amendment, you’d have some questions about it’s credibility, and it would just reduce your flexibility in a crisis.

Watch it:

Chambers also said it could take as long as a decade for the U.S. to regain its AAA rating, spurning GOP suggestions that a hasty and drastic revision to the U.S. Constitution could automatically fix the downgrade. The Republican plan would require a balanced budget for each fiscal year and cap spending at 18 percent of GDP.

As Chambers said, a balanced budget amendment would tie government’s hands and render it unable to take corrective measures during a recession. By slashing spending and mandating “perverse actions in the face of recessions,” it would greatly damage America’s already weak economy — which is why five Nobel Prize-winning economists have denounced the idea.

Justice

Sen. Mark Udall Proposes Somewhat Less Awful Balanced Budget Amendment

As Pat Garofalo explained earlier today, ratifying a Balanced Budget Amendment is a terrible idea that would “mandate perverse actions in the face of recessions.” And congressional Republicans took this terrible idea and made it even worse by demanding that Congress not only approve such an amendment, but that the amendment also include provisions that make it impossible to raise taxes and that require spending cuts so steep that it would have made Ronald Reagan’s fiscal policy unconstitutional.

Perhaps in response to the congressional GOP’s Balance The Budget On The Backs of Seniors And The Middle-Class While Protecting Millionaires From Taxes Amendment, Sen. Mark Udall (D-CO) recently introduced an amendment of his own. Unfortunately, the Udall amendment includes a balanced budget provision which would prohibit stimulative deficit spending during a recession unless three-fifths of the Congress agrees to allow such spending. Nevertheless, the proposed amendment also includes an encouraging provision that would prohibit Congress from prioritizing tax cuts to millionaires over fiscal responsibility:

SECTION 6. Congress shall not pass any bill that provides a net reduction in individual income taxes for those with incomes over $1,000,000 (as may be adjusted by Congress to account for inflation) if, after enactment, total outlays would exceed total receipts in any fiscal year affected by the bill.

Had this provision been in effect in 2001, George W. Bush’s disastrous tax cut packages would have been unconstitutional, and the single largest contributor to our present deficits would never have become law:

There are very good reasons why it is not a good idea to write any kind of budgeting amendment into the Constitution. Such amendments force the courts to supervise the federal budgeting process — and courts are not exactly equipped to make these kinds of judgments.

Nevertheless, if Congress insists upon writing measures into the Constitution that help balance the budget, Section 6 of the Udall Amendment could be a good model to consider. If enacted as a standalone amendment, it would restrict the George W. Bushes of the future from blowing up the budget with reckless and unnecessary tax giveaways to the super-rich while still allowing Congress to enact essential financial stimulus in the event of a recession.

Economy

With Economy Stalling, Republicans To Spend August Recess Promoting Ridiculous Constitutional Amendment

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.

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