Will GOP pass a “tax increase BBA”?

posted at 4:05 pm on August 30, 2011 by Ed Morrissey

Republicans made significant progress towards a balanced-budget amendment vote in the debt-ceiling debate.  While Democratic leadership initially mocked the idea, polls showed that voters broadly support a constitutional bar on deficit spending — including wide majorities of Democrats and liberals.  Some Democrats in Congress later expressed support for the concept of a balanced-budget amendment to the Constitution, and a vote on some form of BBA is expected later this year.

But what form will get a vote?  Brent Bozell worries that Republicans might give away the key to controlling tax rates:

The version attached to the House Republicans’ Cut, Cap and Balance bill was sponsored by Sens. Mike Lee (R-Utah) and Orin Hatch (R-Utah). It required a supermajority to use tax increases to balance the nation’s books.

This element is critical. Congress has proven its inability to show spending restraint, especially when there’s a prospect of a tax increase ahead. By raising the bar for passing new taxes through a balanced budget amendment, this dangerous, and irresponsible, option is more difficult to do.

In the back halls of Congress though, there are now whispers that Republicans are considering bringing a “tax increase BBA,” which requires only a simple majority to raise taxes, to the floor. If the GOP goes for a tax increase BBA, not only will they be enabling liberals to make permanent President Barack Obama’s spending binge — highlighted by the failed stimulus and Obamacare — but they will also give vulnerable Democrats political cover to help keep their jobs in November, 2012.

Republicans won’t be so lucky. Many will likely be signing their political death certificates.

Bozell might be right about political death certificates, but if so, it will likely be because Republican voters might not understand that the supermajority component is not the most important issue in a BBA proposal.  First, Senate rules already supply a de facto supermajority requirement on most legislation with the filibuster.  That forces bills to get 60 votes in order to proceed to debate, and then 60 again to proceed to a floor vote.  That does not apply to appropriation bills, of course, and shouldn’t to judicial confirmations, but they do apply to everything else as long as the Senate keeps the filibuster in the rules — and they have no incentive at all to end it.

Besides, supermajority requirements in the Constitution only exist for critical issues such as amending the Constitution itself, election of a President in Congress in case of an Electoral College tie, impeachment of federal officers, and treaty ratifications.  There is no other supermajority requirement on domestic policy in the Constitution; clearly the framers considered simple majorities suitable for domestic policy.  That is a tradition that should be maintained.  If we cannot keep a majority from raising taxes, then either the tax increases contemplated have majority support in the nation or the nation will return a Congress that will roll such tax hikes back.

The most critical component of a BBA isn’t a supermajority restriction on tax increases, but a hard cap on spending linked to GDP.  The proposal pushed by Jim DeMint and conservatives included a limitation on federal spending, including spending on entitlement programs, to 20% of the previous year’s GDP (DeMint’s proposal also had a tax cap). I’ve seen other figures proposed, such as 18.5%, but 20% is closer to the average level of spending in Washington in the years preceding the 2007 Democratic majority in Congress.  If passed today, it would require about a 20% reduction in spending immediately in order to come into compliance.

Having a hard cap on spending level would greatly reduce the pressure for tax hikes.  Regardless of how much money came in, Congress would be unable to spend over the hard-cap amount, which means that tax hikes would become irrelevant.  Actually, they would become an albatross, since the only way to get more money to spend would be to drive up the nation’s GDP, and tax hikes generally damage economic growth.  In order to get more cash for any pet projects, Congress would be forced to implement pro-growth policies — and would also be forced to wait at least one year for the cap to be raised.

The real reason for a BBA is to put a limit on government spending.  Let’s focus on the real prize.

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Republicans made significant progress towards a balanced-budget amendment vote in the debt-ceiling debate.

– And then caved.

fossten on August 30, 2011 at 4:08 PM

How about a hard spending limit linked to actual dollars?

That will give a great incentive to Congress not to stoke inflation and, when they do anyways, it will start to cut the size of government because the dollars don’t go as far.

Put it back to 2006 spending levels and live with that.

Forget setting the size of government permanently to GDP. That just ensures a large government forever onward.

ajacksonian on August 30, 2011 at 4:11 PM

The most critical component of a BBA isn’t a supermajority restriction on tax increases, but a hard cap on spending linked to GDP.

Ed, I have trouble believing you would put faith in a constitutional provision that essentially turns one of the greatest powers of our federal government over to econometricians at the Bureau of Labor Statistics or some other such pit.

On the plus side, though, it’ll be King for a Day for a slew of economists out there.

JohnGalt23 on August 30, 2011 at 4:15 PM

Republicans caving and allowing tax increases?

Someone catch me, for surely I’ll fall over out of shock.

amerpundit on August 30, 2011 at 4:17 PM

Howsabout eliminate all unconstitutional spending according to Art. I Sec. 8?!

Akzed on August 30, 2011 at 4:19 PM

The important think is establishing a link between spending and taxing which a well written BBA does. As it is, what the government spends has no direct impact on what taxpayers pay, thanks to deficit spending.

cartooner on August 30, 2011 at 4:20 PM

Raise taxes to pass a BBA, just what taxes are we talking?

Can we just raise the taxes on the loud-mouths that are demanding their taxes be raised and then pass CCB?

Kini on August 30, 2011 at 4:24 PM

This whole thing makes me really nervous. I can imagine some judges making some crazy rulings based on a badly worded amendment.

strictnein on August 30, 2011 at 4:27 PM

Tax the hell out of Buffet and his liberal numbnutz friends with no loopholes.

Speakup on August 30, 2011 at 4:32 PM

I second JohnGalt23′s objection. I would also like to point out that the government will game the definition of “spending”.

Social Security? Not spending, it’s a self-funding pension.
Medicare? Not spending, it’s insurance.
Interest on the debt? Not spending, it’s preserving the full faith and credit of the United States.
Highways? Not spending, they are capital improvements.

And there is bound to be an exception for time of war. Guess which country has been at war since Congress passed the AUMF on September 18, 2001?

And who is going to enforce this limit? The courts? Will they even grant standing for anyone to sue for enforcement? And if they do, how sure are you that they will rule against the spenders?

The BBA is a fool’s game. The only way to restrain spending is to elect Congressmen who will vote to limit spending. That’s hard work, but it is the only way that can work.

dirc on August 30, 2011 at 4:34 PM

There is no other supermajority requirement on domestic policy in the Constitution; clearly the framers considered simple majorities suitable for domestic policy. That is a tradition that should be maintained.

The framers never envisioned an ammendment that would allow for direct confiscation of private property for redistribution to others based on the whims of politicians.

Freddy on August 30, 2011 at 4:35 PM

Considering the machinations used by the dems to pass O-Care, I believe a BBA sans explicit supermajority language is an open invitation to achieve balanced budgets by passing tax hikes using similar parlimentary back doors.

BadDogMN on August 30, 2011 at 4:36 PM

Who cares, if they can chose not to pass any budget, like democrats did for two years. We need an amendment, requiring to pass the budget, or all members of congress are up for recall elections.

anikol on August 30, 2011 at 4:46 PM

In the back halls of Congress though, there are now whispers that Republicans are considering bringing a “tax increase BBA,” which requires only a simple majority to raise taxes, to the floor.

THIS is exactly why I have always opposed the BBA. It is a guaranteed tax increase. The GOP can spend like drunken sailors as well as the ‘rats can.

ladyingray on August 30, 2011 at 4:48 PM

dirc on August 30, 2011 at 4:34 PM

Actually it would help. It would help focus Americans on those congressmen that would vote for fiscal sanity. It would remind Americans that government is not there to steal for them. particularly if written correctly.

astonerii on August 30, 2011 at 4:51 PM

Another hole in the BBA is off budget stuff. Right now the Congress spends billions on stuff off-budget, would the BBA limit that, too?

zmdavid on August 30, 2011 at 4:52 PM

I don’t trust any legislation coming from Congress about budget restraint. They can find a loophole in a 3 word sentence.

Jimmy Doolittle on August 30, 2011 at 4:52 PM

I have a better idea. just don’t do ANYTHING until after 2012 and see how we look…

golfmann on August 30, 2011 at 4:52 PM

How about a hard spending limit linked to actual dollars?
ajacksonian on August 30, 2011 at 4:11 PM

I like it. It would also reduce their incentive to inflate away the currency, as they would inflate away the government as well.

How about a dollar figure multiplied by the last census? Right now, that figure would need to be more than $10,000 to cover current spending.

zmdavid on August 30, 2011 at 4:55 PM

Loopholes, for sure.

Do you really think a BBA will stop the Congress from overspending?? Look at all the double sets of books we have now, like for entitlement, and the SS “trust fund” full of worthless IOUs.

We have to change the culture. Focus. We would do better to elect Tea Party folks NOW than dither about a BBA for the next 10 years.

PattyJ on August 30, 2011 at 4:56 PM

Good way to get the Tea Party riled up again.

Amjean on August 30, 2011 at 5:00 PM

While I think anything that will limit spending in a great idea, I am not all that sure how well linking this to GDP would work.

I don’t think that there is any universal definition of GDP. There are many ways to compute it. Do you really want your basic governing document to have complex equations and a set economic definitions in it?

No answer, just a question.

OBQuiet on August 30, 2011 at 5:06 PM

Excellent analysis. The crux is debt relative to GDP! If held to that basis, then we will be able to grow our way out of debt. Even donkeys will eventually see that raising taxes will not increase revenue above about 20% of GDP. It is a historical fact that, like gravity, cannot be changed by act of Congress.

MJBrutus on August 30, 2011 at 5:23 PM

Excellent analysis. The crux is debt relative to GDP! If held to that basis, then we will be able to grow our way out of debt. Even donkeys will eventually see that raising taxes will not increase revenue above about 20% of GDP. It is a historical fact that, like gravity, cannot be changed by act of Congress.

MJBrutus on August 30, 2011 at 5:23 PM

That’s pretty naive.

The left isn’t interested in learning lessons, or in a solvent United States.

They’re interested in power and subjugation.

fossten on August 30, 2011 at 5:25 PM

Social Security? Not spending, it’s a self-funding pension.
Medicare? Not spending, it’s insurance.

They won’t use the word “spending”, they’ll use the word “outlays”. It won’t be ambiguous.

Kohath on August 30, 2011 at 5:32 PM

I call Bullsh*t!

The ONLY hope for a successful BBA and the only just and workable one would NOT require a supermajority to raise taxes. This is the conservative equivalent of “one man, one vote, one time”. Conservatives want to win and then go home. Well, that would be a disaster. We can’t claim the principle that congress should pass a balanced budget and then completely hamstring the option of tax increases. We’ll end up with a government as dysfunctional as California where liberals can push as hard to the left as they can without fear and then continue to blame conservatives for leaving them unable to balance the budget. It’s a political loser!

The only solution is a clean BBA. This forces the conservatives to “fight the fight” against tax increases every year. It let’s conservatives talk about “tax revenues” instead of “tax rates”. I’m all for increasesing tax revenues to balance the budget. The best way to increases revenues is to spur economic growth. Make the pie bigger. We elect representatives to make tough choices. They should be judged by the choices they make every 2 years. They will be held accountable for spending and for tax increases.

Michael K. on August 30, 2011 at 5:38 PM

First, Senate rules already supply a de facto supermajority requirement on most legislation with the filibuster. That forces bills to get 60 votes in order to proceed to debate, and then 60 again to proceed to a floor vote.

Exactly. Obamacare passed with 60 votes. No wait a minute, that can’t be, Scott Brown the the 41st vote against it. Oh I remember now, the Dems said screw the 60 vote requirement and just passed it with a bare majority.

But they will never do that to increase taxes, right?

angryed on August 30, 2011 at 6:12 PM

Social Security? Not spending, it’s a self-funding pension.
Medicare? Not spending, it’s insurance.

They won’t use the word “spending”, they’ll use the word “outlays”. It won’t be ambiguous.

Kohath on August 30, 2011 at 5:32 PM

OK, SS isn’t an outlay. It’s just a return of people’s money. They put money into the system, they are just getting it back. No outlays on the part of govt. And any additional money given to retirees, over and above what they put in, again not an outlay. Simply an interest free loan that is never to be repaid.

angryed on August 30, 2011 at 6:20 PM

Exactly. Obamacare passed with 60 votes. No wait a minute, that can’t be, Scott Brown the the 41st vote against it. Oh I remember now, the Dems said screw the 60 vote requirement and just passed it with a bare majority.

But they will never do that to increase taxes, right?

angryed on August 30, 2011 at 6:12 PM

No, you don’t remember it. If you’ll recall, the House had to pass the version that passed in the Senate with 60 votes before Brown won that election. That was the only way to avoid a filibuster in the Senate with a new version from the House. The Senate then passed a companion bill that made some spending changes to the bill, which the House then passed, in order to avoid the filibuster.

Ed Morrissey on August 30, 2011 at 6:41 PM

Ed Morrissey on August 30, 2011 at 6:41 PM

Splitting hairs. They passed the final version of Obamacare without 60 votes. They will find ways to do the same with tax increases. They are Democrats. They lie. They cheat. They steal.

angryed on August 30, 2011 at 7:13 PM

Republicans won’t be so lucky. Many will likely be signing their political death certificates.

Republicans refused to fight Democrat’s irresponible spending and taxing when it would have been easy, so now they’ll have to fight when it’s hard and may cost them greatly.

RJL on August 30, 2011 at 7:36 PM

In theory, I love a Balanced Budget Amendment. However, like all businesses, the need to borrow is a necessity. Unhinged borrowing like our Congress does every year has got to be stopped. On the other side of this, just allowing Congress to vote to borrow and borrow and borrow can’t be a part of it, but some kind of emergency borrowing should be allowed.

Voting one way or the other though, I would go for a straight up outlays must not exceed revenue, period over what we have now until Government can prove it can be a responsible “adult” about budgets.

bds1976 on August 30, 2011 at 8:05 PM

The most critical component of a BBA isn’t a supermajority restriction on tax increases, but a hard cap on spending linked to GDP. The proposal pushed by Jim DeMint and conservatives included a limitation on federal spending, including spending on entitlement programs, to 20% of the previous year’s GDP (DeMint’s proposal also had a tax cap). I’ve seen other figures proposed, such as 18.5%, but 20% is closer to the average level of spending in Washington in the years preceding the 2007 Democratic majority in Congress. If passed today, it would require about a 20% reduction in spending immediately in order to come into compliance.

There’s two problems with accepting a 20% of GDP level of federal spending, even 20% of the prior year’s GDP (which, unless inflation comes back, would be over 19% of the current year’s GDP):

- The economy revolts every time federal revenues approach or exceed 19.0% current-year GDP.
- The post-WWII average (1947-2007) spending is a “mere” 19.5% current-year GDP (or if you prefer, 20.8% prior-year GDP). Over the same period, federal revenues have been 17.8% current-year GDP (or again if you prefer, 19.1% prior-year GDP). Even if one were to exclude the lower-than-average beginning and end (the end seeing lower-than-average revenues only) and go with a 50-year average between 1951 and 2000, spending was 19.9% current-year GDP and tax take was 18.1% current-year GDP.

Did I mention that I have yet to see a BBA with a cap based on the prior year’s GDP,

Steve Eggleston on August 30, 2011 at 8:36 PM

No — don’t hook any Constitutional spending cap to GDP — GDP numbers have been cooked in a number of cases.

Hook the spending limit strictly on what is in the Treasury. No money in the treasury means no expenditures.

Better is that any overexpenditure triggers an election for a new Government. Make this amendment have teeth.

unclesmrgol on August 31, 2011 at 11:17 AM

But don’t you get it? The BBA means if they spend, they have to tax. No government handouts on borrowed money means the people will have to pay taxes to pay for the excesses of the Congress, and THAT is what will keep Congress from spending wildly.

If we were having to pay taxes to meet current government obligations, not 25 percent of Congress would be re-elected in 2012.

Spend what you need to. Just be prepared to justify yourself to your constituents at the end of the day.

Skywatcher44 on August 31, 2011 at 3:44 PM