Family Research Council’s Faulty Family Argument for the Balanced Budget Amendment
This week on the Hill, House Republicans (and Blue Dog Democrats) are busy resuscitating the “worst idea in Washington“– a balanced budget amendment that would prevent the federal government from running deficits even when necessary to slow and ease the damage of economic recessions. (Jared Bernstein and James R. Horney discuss the details of this problem in the clip to the right).
That hasn’t stopped religious right groups like Family Research Council from continuing their push for this dangerous idea, however. In fact, they think the current legislative proposal isn’t extreme enough!
There have been rumblings that some Republicans are pushing for a weak amendment that gives future Congresses the ability to raise taxes to pay for their spending habits with a majority vote. In the version FRC supports, introduced in the Senate by Mike Lee (R-Utah), any tax hikes would have to be approved by a two-thirds majority in both chambers.
Get that? Not only does FRC think we should immediately balance the budget exclusively through spending cuts, they oppose any amendment that doesn’t also tie the hands of future Congresses who might use a pesky thing called democracy to come to a different solution. (For a quick reminder of why this too is a terrible idea, see California)
In FRC’s mind, members of Congress aren’t adults tasked with being responsive to the will of the people in making tough decisions, they’re “irresponsible teenagers” who can’t be trusted with “the country’s credit cards.”
The language gets to the heart of what makes this disastrous idea so politically popular. It appeals to Americans’ core principles of responsibility and fairness. “If American families have to live within their means and balance their budgets, the federal government should too” makes for a catchy “common-sense” sound bite, but it’s actually quite misleading.
Robert Greenstein at the Center on Budget and Policy Priorities explains:
Families must balance their budget every year, proponents of a constitutional balanced budget amendment often argue, so why shouldn’t the federal government? This argument has several serious flaws, the most basic being that families often do not balance their budgets, for good reason.
A family that takes out a student loan to send a child to college, for example, might end up with a large “deficit” for that year — that is, it will spend more than it earns that year. But a college education is a solid long-term investment that is likely to translate into significantly higher earnings over the child’s working career.
Similarly, a family that obtains a mortgage will almost certainly have a “deficit” for that year, but it will also have a house to live in.
Families also build up savings in good economic times and draw them down when times are tight to cover expenses that exceed their current incomes.
The proposed constitutional amendment would bar the federal government from such practices. The federal government couldn’t borrow to finance investments that boost future economic growth, such as infrastructure improvements. And if it ran a surplus one year, it couldn’t draw it down the next year to help balance the budget if the economy turned down.
There’s actually nothing common sense or compassionate about this policy.