Today the Republican-controlled House of Representatives passed Speaker John Boehner’s (R-OH) debt ceiling plan with a 218-210 vote. The bill will now move to the Senate, where it will surely be defeated by Senate Majority Leader Harry Reid (D-NV) and 52 other Senators who have vowed to defeat it. In order to ensure passage of his bill Boehner had to include a provision which will mandate passage of a Balanced Budget Amendment, also called “cut, cap, and balance,” before the debt ceiling can be raised again next year. The passage of the Boehner bill makes the Balanced Budget Amendment (BBA) the main issue of contention between Democrats and Republicans, as the Reid bill does not include any provision dealing with BBA.
As Republicans frequently mention, a Balanced Budget Amendment tends to poll very well. Americans like the idea of a “balance” and believe that Congress should have to “cap” their budget like everyone else. One poll found that 74% of Americans favor a Balanced Budget Amendment.
The problem for Democrats is that the Balanced Budget Amendment contains very little “balance” in reality. The Balanced Budget Amendment does not simply require that the budget be balanced, but instead puts very specific limits on how the budget can be balanced.
Under the amendment, spending cuts would only need a majority (50% + 1) in order to balance the budget. However, tax increases would require a super majority of 66% of Congress. Tax increases are hard enough to pass with a simple majority. The Balanced Budget Amendment would effectively make tax increases impossible in the future. As a result, what the “Balanced” Budget Amendment would really mean is mandated spending cuts with no accompanying tax increases. Medicare and Medicaid cuts would only require a simple majority vote, but increases taxes on the very wealthiest Americans would require a super majority.
In addition, the Balanced Budget Amendment would likely result drastic cuts to Social Security and Medicare. Under the terms of the Balanced Budget Amendment, spending would be capped at 18% of GDP. According to the non-partisan Congressional Budget Office, Social Security and Medicare alone will account for 14% of GDP by 2035. Defense spending makes up 4.7% of GDP. Those three programs already exceed the 18% cap put in place by the Balanced Budget Amendment without accounting for other huge costs like interest payments on the debt, veterans affairs, and discretionary spending. Practically speaking, the Balanced Budget Amendment would require cuts to Social Security, Medicare, and Medicaid in the future.
Polls show the public strongly opposes cuts to Medicare, Medicaid, and Social Security, yet many Americans do not know that the Balanced Budget Amendment would require cuts to these programs. Only 32% of Americans favor changing Medicare and Social Security to balance the budget, compared to 60% who are opposed to any changes. If the Balanced Budget Amendment did become part of the Constitution Congress would have no choice but to abide by its terms, meaning the Congress could use the Amendment as an excuse to cut these programs even if the public is against it. To progressives, the Balanced Budget Amendment is the classic example of a wolf in sheep’s clothing, allowing conservatives to cut popular entitlement programs under another name.