Republicans are scheming to revive the dangerous balanced budget amendment in 2023.
House Republicans are already scheming about what they will do if they regain a majority in the 2022 midterm elections. These plans apparently include a constitutional amendment that could force massive cuts to Social Security, Medicare, and other safety net programs.
The Hill reported Wednesday that the GOP's so-called "fiscal hawks" want to push a balanced budget amendment, a proposal to amend the Constitution to require that spending not exceed revenue in any single year unless a large majority of members of Congress — typically three-fifths — agrees to it.
"We're heading for a fiscal crisis if we don't get a grip on spending,” Virginia Rep. Bob Good told the outlet.
This is not a new idea for House Republicans. In 1994, they ran on a "Contract with America" promising that if they won control of the Congress, they would bring up several conservative proposals within the first 100 days. A balanced budget amendment was one of those items.
Constitutional amendments require a two-thirds vote in both the House and the Senate — plus ratification by three-quarters of the states.
The GOP's balanced budget proposal passed in the House in January 1995, but failed in the Senate by a single vote. Republican Oregon Sen. Mark Hatfield refused to go along with the rest of his caucus, saying it would "trivialize the Constitution."
Democrats warned that without an exception for the Social Security Trust Fund, a balanced budget amendment would mean cuts to that program, and most of them also voted no.
"I think the Republicans have a lot of explaining to do to the millions of senior citizens out there who have paid into a trust fund," warned then-Democratic Minority Leader Tom Daschle.
The architect of that 1994 Contract with America was then-House Minority Whip Newt Gingrich. The Hill report noted that he is advising current House GOP leaders on crafting their midterm agenda. Rep. Darrell Issa (R-CA) told the outlet that this was great because so much of Gingrich's 1994 plan was never implemented.
"Today we actually provide more money to people for not working than we did before welfare reform, we just do it in other forms," Issa complained. "We've essentially re-resurrected the welfare system that paid people not to work."
Gingrich infamously admitted in 1996 that the GOP wanted the part of the government that administers Medicare to simply "wither on the vine" as people "voluntarily" left the popular health insurance program for older Americans.
The National Committee to Preserve Social Security and Medicare warned then that such an amendment was "a colossally dangerous idea."
"Among other disastrous effects, it would result in devastating cuts to Social Security and Medicare," it warned, writing:
In order to balance the budget every year, Congress would be forced to make draconian cuts to Medicare Part B, Medicaid and other programs that seniors depend upon. Medicare and Medicaid cannot sustain cuts (other than common sense cost-saving measures) without hurting beneficiaries. Period. At a time when seniors' out of pocket health care costs are rising, the BBA puts the health and financial security of Medicare's 58.5 million beneficiaries and Medicaid's 72.3 million at risk.
Equally serious is the BBA's potential impact on Social Security. Under the BBA, if federal expenditures exceed revenues, the government would be forbidden from paying benefits from the Social Security trust fund reserves – even though the trust fund is self-financed by workers' payroll contributions and unrelated to general revenues. Ditto for reserves in the Medicare Part A trust fund. Benefits would then have to be slashed in order to keep the federal budget in balance, something seniors on fixed incomes could ill afford.
The same year, Seth Hanlon and Alex Rowell of the Center for American Progress wrote that a balanced budget amendment "would force unthinkable spending cuts and threaten Social Security, Medicare, Medicaid, and other critical priorities." They predicted that in a recession, "Social Security benefits and other government spending would have to be cut by 35 percent, if done across the board. That would be devastating for those who rely on Social Security and other government programs and, as discussed below, potentially catastrophic for the economy."
Richard Kogan, senior fellow at the Center for Budget and Policy Priorities, warned in 2019 that any constitutional amendment requiring a balanced budget was "fundamentally flawed" because it would "hurt the economy even if it tries to account for recessions" and "undercut Social Security, Medicare, and other programs that have built up reserves."
A constitutional requirement of a balanced budget, he predicted, "would risk tipping a weak economy into recession and making recessions more frequent, longer, and deeper, causing very large job losses and hurting long-term growth. That's because it would force policymakers to cut spending or raise taxes just when the economy is weak or already in recession — the opposite of good economic policy."
It is not just Democrats and economic experts who have called out congressional Republicans for their repeated attempts to destroy the Social Security and Medicare systems.
In April 2015, then-presidential candidate Donald Trump told New Hampshire Republicans, "Every Republican wants to do a big number of Social Security. They want to do it on Medicare, they want to do it on Medicaid. And we can't do that. And it's not fair to the people that have been paying in for years."
After getting elected, Trump repeatedly tried to break his promises not to cut Medicare, Medicaid, or Social Security.
Published with permission of The American Independent Foundation.