The stewardship of a constitutional amendment to require a balanced budget, a ritual for congressional Republicans, is shifting this year to Senate Minority Whip John Cornyn, R-Texas. Unlike in previous years, when Republicans went through multiple drafts, in the 113th Congress the GOP is united from the outset.
An original co-sponsor in the past, Cornyn is taking the leadership reins on the Balanced Budget Amendment from Sen. Orrin G. Hatch, R-Utah, the ranking Republican on the Finance Committee. Both Hatch and Cornyn have long served on the Judiciary Committee.
For Republicans, the introduction last week of the Balanced Budget Amendment (S J Res 7) is part of a broad strategy to intensify the party’s attention to deficit reduction and to focus on balancing the federal budget.
In the House, Paul D. Ryan of Wisconsin, chairman of the House Budget Committee, plans to introduce a budget resolution aimed at balancing the budget within 10 years, a far more aggressive schedule than he set out in the House-approved budget resolution last year. And high-profile figures in the party are making it a linchpin issue.
“The real cause of our debt is that our government has been spending $1 trillion more than it takes in every year. That’s why we need a balanced budget amendment,” Sen. Marco Rubio of Florida said in the Republican response to President Barack Obama’s State of the Union speech.
Likewise, Kentucky GOP Sen. Rand Paul, delivering an alternative tea party response, said, “To begin with, we absolutely must pass a Balanced Budget Amendment to the Constitution. The amendment must include strict tax and spending limitations.”
Cornyn has written and spoken about the amendment extensively in the past, including spearheading an effort in 2010 to have the Republican Conference declare the importance of adopting the amendment.
And the rollout of the amendment in the 113th Congress has gone far more smoothly than in past years, when Republicans worked through various drafts that raised concerns in various quarters. The version Cornyn introduced Wednesday echoes the agreed-upon version from last Congress, which secured the votes of all Republicans in the chamber. This year, all Senate Republicans are on board as well.
Former Senate aide and Republican consultant Matt Mackowiak noted that Cornyn was a logical choice to pick up the torch. “It sends a powerful signal that the No. 2 Senate Republican is leading the BBA effort,” he said.
This version would set up a spending cap of 18 percent of GDP while providing a few narrow exemptions. In addition, there would be new supermajority requirements for raising both the debt limit and taxes.
Although backers note that Congress and the White House have been unable to balance the federal budget through the normal order, critics of past efforts have long argued that a balanced-budget amendment would undermine congressional authority and cause unforeseen problems in future budgeting for entitlement programs, among them Medicare and Social Security.
Other critics say that, whatever the merits of the idea of a balanced-budget requirement, the structure would create a particularly stringent standard for setting the level of federal revenue by having budget writers look back at the previous year’s GDP. Outlays would not be allowed to exceed 18 percent of GDP “for the calendar year ending before the beginning of such fiscal year,” the resolution says.
That would not take into account the economic growth during the current fiscal year, Donald Marron, director of the Urban Institute-Brookings Institution Tax Policy Center, wrote in a blog post about the amendment, effectively leaving the allotment for federal outlays far below the 18 percent level for any single budget year.
Marron said that gap would amount to some $300 billion in any single year, based on Congressional Budget Office projections for federal outlays and economic growth. He said Congress should instead depend on GDP forecasts from dependable sources, pointing to the Office of Management and Budget, the CBO or the House and Senate Budget committees.
Democrats say Republicans are simply trying to distract from more pressing budget matters, including the upcoming sequester and the continuing resolution to fund government operations.
“They’ll do anything to change the subject from facing the real issues, which is that we have to find a balance between revenues, spending — but we also have to focus on growth and jobs, and so they’ll come up with all kinds of gimmicks,” said Barbara A. Mikulski of Maryland, chairwoman of the Senate Appropriations Committee.
The GOP is united on the matter, however.
“With more than $16 trillion of debt, including nearly $6 trillion since President Obama took office, we are facing nothing short of a fiscal crisis,” Cornyn said in a statement.
The Congressional Budget Office has projected that the fiscal 2013 deficit will fall to $845 billion, from $1.1 trillion last year.
The deficit for the first four months of the fiscal year was $290 billion, according to a report from the Treasury Department, although the federal government ran a surplus of $3 billion in January; in the same month a year ago, the deficit was $27 billion. This is the first January since 2008 in which there was an excess of revenue over spending, the Treasury reported.