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Tea Party Senators Leveraging Debt Ceiling for a Balanced Budget Amendment

April 26, 2011 - by Donny Shaw

The upcoming debt ceiling increase is pretty much the ultimate must-pass bill. If Congress doesn’t pass it, it’s not just that some programs would be put on hold or that some federal workers would be furloughed; the entire economy would collapse much more deeply than in 2008, and we would have no chance of recovery since our international credit worthiness, our principle financial asset, would be permanently ruined. Of course, every member of Congress knows that the debt ceiling increase has to be passed. That’s why they’re hoping to use it as a means to pass other legislation that they know cannot stand on its own.

Fox News reports that Senate Republicans are planning to filibuster the debt ceiling increase unless the Senate passes a constitutional balanced budget amendment:

Guided by their belief that the nation is headed for a long-term fiscal calamity, Republicans are promising a fight — one that may make the battle earlier this spring over government funding resolutions look small in comparison.

Sen. Jim DeMint, R-S.C., vows to “tie the Senate in knots” unless it passes a balanced budget amendment. And while he and Senate Republicans may lack the votes for passage, they wield some leverage — Democrats need some Republican support to raise the debt ceiling.

[…]

All 47 Senate Republicans have signed a pledge to vote for it, and there are indications that as many as nine or 10 Senate Democrats may be leaning towards yes votes, too.

The last time a balanced budget amendment was introduced in the Senate, in 1997, it failed by just one vote.

Proponents believe the public pressure for such an amendment has grown enormously since those years.

The Republicans’ balanced budget amendment is S.J.Res.10.

Besides requiring budgets to spend no more than they bring in in revenues, it would cap federal spending at 18% of GDP, which you can see in the graph at right is a level not seen since the early 1930s. It would also make it more difficult to balance the budget by raising taxes or closing tax loopholes by requiring a 2/3rds majority vote in both chambers for “any bill that imposes a new tax or increases the statutory rate of any tax.”

As difficult as it is to pass a constitutional amendment (both chambers must pass it with 2/3rds majority), the Republicans have the advantage here. It only takes two or three senators working together to filibuster a bill to death. The balanced budget amendment has the support of 47 Republicans, so DeMint can likely get help from othe Tea Party members, like Sen. Rand Paul [R, KY] and Sen. Mike Lee [R, UT], or Sen. Orrin Hatch [R, UT], the amendment’s chief sponsor. And note that DeMint doesn’t just want a vote on the amendment; he is threatening a filibuster unless the amendment actually passes.

QUICK UPDATE: Sen. Lee has already pledged to filibuster the debt ceiling vote unless a balanced budget amendment passes. Game on.

Sens. DeMint and Paul are pictured above, pledging their allegiace to the flag, at a Tea Party Caucus meeting.

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Comments

Displaying 31-40 of 40 total comments.

jlohman 04/27/2011 10:52am

Yea, but eth111, you described the problem exactly the same way, “the ability to hand out (read sell) favors.” As long as money is interpreted to mean speech, and politicians can accept it in return for favors, we are in trouble.

eth111 04/27/2011 10:30am

Jack, I agree generally with your statement, but disagree with the root cause.

What we are seeing today is the result of a positive feedback loop that has existed for too long. The root of the problem is that the government has given itself the ability to hand out (read sell) favors. The original intent of the Constitution was to “put chains on government”.

They have managed, through the 14th (turn natural rights into priveleges), 16th (income tax), and 17th (remove senate responsibility to the states) to break most of the chains that were put in place.

The really sick part is that the warnings exist from Aristotle, Cicero, Hobbes, Locke, Monroe, Madison, Jefferson, Spooner, Bastiat, Mises, Hayek, and Rand just to name a few covering ~25 centuries.

We are not seeing anything new, this is how all republics throughout history have self destructed. Too bad we couldn’t learn from the past.

jlohman 04/27/2011 8:30am

Congress does not want a balanced budget amendment because it will hamper their giveaways to the Fat Cats that fund their elections.

Absolutely NOTHING will fix our system without getting to the root: political corruption. Politicians sharing in the booty by taking campaign bribes, and then rolling over to the industry that wants in the taxpayer’s pockets.

Our problem is NOT government, and it is not R’s or D’s. It IS that government is owned by CEOs and corporate interests that want in the taxpayer’s pockets. The 2010 elections were funded by just 1% of Americans, when they should be financed by 100% of taxpayers. And at $5 per taxpayer it would be a bargain. Even at 100 times that.

If politicians are going to be beholden to their funders, those funders should be the taxpayers. We MUST demand that our senators and representative pass the bill at: http://fairelectionsnow.org/about-bill

Jack Lohman …
http://MoneyedPoliticians.net

eth111 04/27/2011 7:51am

@luminous; As for the industrial/agricultural/social policy; are you talking about subsidies? They should cease to exist, plain and simple. There are proper functions of government and income redistribution is not one of them.

There need to be local programs to deal with “social” policy, not national ones.

The problem is spending, not revenue. Many organizations have published the data that regardless of highest marginal rate, revenue consistently runs at ~19%. Capping spending at 18% (section 2) recognizes that.

A group of unelected bureaucrats making the rules resulted in a tax code that is almost 72,000 pages long. The proposal from fakk2 is 129 characters. Those 72000 pages are where all of the loopholes created in back room deals reside.

The IRS is the largest private army in the world. They have the power to legislate, arrest, confiscate, and incarcerate. In short, they are allowed to make the rules and then be judge, jury, and executioner.

eth111 04/27/2011 7:42am

First, on the proposed amendment; Sections 6 and 7 need to be dropped. Any time Congress has an out clause, they use it. Sections 1 & 2 already have 2/3 override clauses. With a formal declaration of war (which there hasn’t been since 1941), it would be easy to get 2/3 and we should not have the US Military running around being the NATO police force anyways.

What fakk2 is proposing (flat 15%) should extend to corporate income tax as well. Everyone pays the same percentage, no outs, no breaks. That gets rid of your concern about the ever ominous mega corporations.

It also will result in growth of GDP as it will lower the overall burden on those companies. Those mega corporations play the international game because the US the second highest corporate tax rates in the industrialized world. That is why companies move operations overseas.

luminous 04/26/2011 6:56pm

Every year will turn into one of these special cases, the only difference is that you will have to effectively buy more votes by handing out benefits to the campaign contributors of an even larger set of congresses critters special interests(what has happened in CA).

This won’t balance the budget, not even close.

"Wouldn’t it just be better to abolish the IRS and have everyone pay a minimum tax of 15%? If you have a SSN, you pay 15%, period. "

And how does this handle the needed industrial/agricultural/social policy needs that are currently addressed via the tax system?

How does this handle the international tax book switcharoo game played by the mega wealthy and corporations?

“You want them to have full autonomy over setting the tax rates?”

I suggest the rate be set via function of law not really set by some PHB in the IRS. but either way someone has got to collect taxes and nobody will ever like them !!!

fakk2 04/26/2011 5:59pm

Luminous, I’m confused by your comment. This amendment states total outlays must equal total receipts (except for receipts derived from borrowing and all outlays except those for repayment of debt principal). Only in a year which a declaration of war against a nation-state is in effect, or which the United States is engaged in a military conflict that causes an imminent and serious military threat to national security and is so declared by three-fifths of the duly chosen and sworn Members of each House of Congress by a roll call vote, can that provision be waived.

The IRS, the most notorious collection agency in the world. The one collection agency which doesn’t have to follow the law as all other agencies have to follow. You want them to have full autonomy over setting the tax rates? Wouldn’t it just be better to abolish the IRS and have everyone pay a minimum tax of 15%? If you have a SSN, you pay 15%, period. Wouldn’t that be easier and increase revenues?

brianlarsen45 04/26/2011 5:25pm

You can’t borrow your way out of debt.

luminous 04/26/2011 2:58pm

2/3rd vote requirements on taxes don’t lead to balanced budgets(See: California).

A real balanced budget amendment would take the tax rate setting authority away from congress and have it set by the IRS on a yearly adjusted schedule, with congress providing the IRS with an equation to use to set the rate.

The problem isn’t spending, its the politicisation of the tax code. To many get off scott free, their are to many loopholes, and its to hard to make occasional reasonable adjustments to the rate for changes in governmental needs as demographics change over time.

The republican solution is to institutionalise the politicisation of the tax, it is not the right path.

fakk2 04/26/2011 1:28pm

AWESOME! There’s no good reason NOT to have a balanced budget amendment, other than to buy votes. At least no good reason I can think of. We haven’t had this amendment, and look where it’s gotten us. I will be sadly disappointed if they (the House) cave on this one for “the greater good” instead of sticking to their guns. This is a fight we NEED to have.

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