• Simple plan, hard truth

    In today’s Wonkbook, Ezra Klein writes,

    Republicans, however, are caught between a rock and a hard place: They don’t like deficits, but they do like tax cuts. So they’ve emerged with a fairly creative answer: A balanced budget amendment that caps spending at 20 percent of GDP and requires a two-thirds vote for tax increases.

    This, at least, has the virtue of clarity. It’s very easy to project what will happen, and what needs to be cut. It’s not exactly like the CBO’s alternative fiscal scenario, but it is close enough that it is worth taking another look at it.

    It’s very hard to attack this projection as being worthless due to uncertainty. With revenue essentially capped (a 2/3rds majority being a high hurdle) and health care costs doing what they’ve been doing for decades, you get a pretty easy forecast. It also tells you exactly where the problem is. I look forward to hearing how defenders of Medicare will also find credible, plausible ways to control its costs, particularly those who don’t think currently proposed cuts are politically sustainable.

    Math doesn’t lie. Make a simple plan, like capping revenue and ignoring reality, and you get a hard truth. Now maybe a balanced budget amendment will force lawmakers to be both realistic and creative. If so, the place to start is by supporting and building on the creative ideas already written into law.

    • Amen. Here in Wisconsin, now-Senator Ron Johnson made two points in a debate with Feingold that placed him squarely in the predicament you paint: (1) he said he favors placing a hard cap on federal spending of 20% of GDP. Once capped, federal agencies would have to “justify every dollar” spent, just like businesses. (2) He claimed that health reform should be repealed because it will eventually lead to “rationing.” In mailers to voters, Johnson specifically criticized health reform’s cuts to the rate of Medicare spending growth.

      I suppose we are entitled to conclude that Johnson and allies want the federal government to be nothing more than an insurance company for the older persons in100 years.

    • Hah! Talk to the folks in California about how well requiring a 2/3rds vote on raising revenue has done for them. Prop 13 capped revenue from property taxes, and the state assembly can’t get the 2/3rds to pass any additional revenue bills. But the state keeps growing and when you get economic downturns like this one, it’s a fiscal nightmare.

      Sorry, but revenue’s gotta be part of the mix. But if you essentially tie lawmakers’ hands on generating it, you get… California.