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.”