Balanced budget amendment likely a nonstarter

By Karoun Demirjian

Tuesday, July 19, 2011 | 7:22 p.m.

Republicans call it “cut, cap and balance.” Democrats call it “duck, dodge and dismantle.”

However you spin it, it’s the Republicans’ flagship proposal to balance the budget via constitutional amendment, and Nevada’s lawmakers have all got pretty strong opinions about it.

“Forty-nine of 50 states balance their budgets. Why doesn’t Congress? Nevada families live within their means. Why doesn’t Congress?” Republican Rep. Joe Heck asked on the House floor this morning.

“Just because there are checks in the checkbook doesn’t mean there’s money in the checking account,” he said.

Democrats have argued it’s artificial to think any person or government’s fiscal balance sheet begins and ends with just a bank account balance, and say the policy, if moved forward, will actually destroy government programs it pretends to save.

“The plan wouldn’t just destroy Medicare, it would destroy Social Security as well,” Sen. Harry Reid, a Democrat, said Tuesday. “This plan is so reckless it would have made President Reagan’s fiscal policies unconstitutional.”

The plan, in its nuts and bolts, is a two-parter.

Part one is a federal balanced budget amendment, which would force Congress not to dole out any more in spending than the country collects in revenue and would cap the annual budget at 18 percent of GDP (a level that actually is lower than what the party’s preferred spending plan, Rep. Paul Ryan’s budget, would have spent in fiscal 2012). The cap could be circumvented by a vote of Congress — a simple majority during wartime.

Before that could become a constitutional amendment, it would have to be put to the states to ratify it; 38 states would have to approve the amendment before it would take effect.

While that might seem like a tall order before August 2 — the date the country starts to default on its foreign debts — the plan wouldn’t make the debt ceiling wait that long. As soon as Congress does its part to pass the amendment, the debt limit would go up by $2.4 trillion.

But Democrats say there are other considerations: mainly that the severity of cuts in the bill would force government to cut entitlement benefits 10 to 20 percent more than previous House proposals, which translates into a few thousand dollars going out, on average, to Social Security and Medicare recipients every year.

The House passed the resolution to promote this arrangement Tuesday evening, with 229 Republicans and 5 Democrats voting in favor of it. (181 Democrats and 9 Republicans voted against.)

Despite that, the vote, and all the debate that’s been surrounding it, is all speculative, because Democrats in the Senate — which is set to consider the proposal on Saturday — aren’t likely to go for it en masse.

The two politicians in Nevada’s delegation who will be facing off in what’s being forecast as one the most contentious Senate races in the country have radically different viewpoints on the merits of a balanced budget amendment for the federal government.

“I’ve got a cut, cap, and balance position,” Republican Sen. Dean Heller said last week. “It took us 50 years to get where we are today...It may take us 20 or 30 years to fix it. But at some point, let’s get this balanced budget amendment out there so this cost curve will start decreasing at some point.”

Nevada Democrat Shelley Berkley disagrees with his solution.

“There’s no question that we have to get our spending under control and put our nation on a strong fiscal footing,” she said. “But this is a waste of time and will do nothing to create jobs and get the people in my state back to work...It eliminates almost a million jobs at a time when we have record unemployment, and it’s of no value in correcting the current situation.”