July 18 (Bloomberg) -- Congressional Republicans are clear in their demand for a constitutional amendment forcing the government to balance its budget. What they’re not offering is clarity on how to get there.
It’s politically popular to line up behind such an amendment; laying out specific cuts is less appealing.
Almost all Republicans and some Democrats will vote to alter the Constitution when the issue comes up as early as this week. Almost none, including a leading co-sponsor of the Senate measure, Orrin Hatch, and Bill Flores of Texas, a co-sponsor of the House measure, say how they’d slash Medicare, eliminate federal programs or shrink education, law enforcement or national defense. Republicans agree that tax increases shouldn’t be part of the equation.
“It’s a misleading political cheap shot,” Bill Hoagland, a budget adviser to Republican congressional leaders from 1982 to 2007, said of the proposed amendment. “We all agree we should have a balanced budget, but that’s the process of budgeting and governing. They are paid to come to town and make decisions.”
A balanced-budget amendment would require cuts even deeper than those in the budget proposed by Representative Paul Ryan of Wisconsin, which was approved by the Republican-controlled House in April. Ryan’s plan doesn’t balance the budget until 2040 and would leave a $338 billion deficit in 10 years.
His plan would overhaul the Medicare health-insurance program for the elderly by offering vouchers to help the elderly buy coverage from private insurers.
Polls show public opposition to privatizing Medicare. By 57 percent to 34 percent, respondents to a Bloomberg National Poll conducted June 17-20 say they would be worse off under the Republican plan to redefine the federal program.
Voter opposition to the Medicare changes helped elect a Democrat to an open House seat in New York in May. The seat had been held by a Republican, and Republican presidential nominee John McCain got 56 percent of the district’s vote in 2008.
Even a proposal last year by the chairmen of President Barack Obama’s bipartisan debt commission to cut the budget by $4 trillion wouldn’t wipe out the deficit for more than 25 years.
Hatch, a Utah Republican facing re-election in 2012, wouldn’t offer specifics on entitlement cuts or say which federal departments he would close to reach a balanced budget.
‘I’ll Name Them’
“When the time comes, I’ll name them,” said Hatch. “I don’t want to do it right now, because we have to pass that amendment.”
Bob Goodlatte, a Virginia Republican who sponsored a House plan for a balanced-budget amendment, referred to a proposal by the Republican Study Committee, which pushes for bigger spending cuts than those in the Ryan budget, when asked what reductions he would make.
The committee’s proposal would increase the retirement age for Medicare and Social Security and cut non-defense discretionary spending almost in half by 2021. Specific cuts to programs to allow for that aren’t spelled out. Non-defense discretionary spending involves programs ranging from education and disease research to transportation and public safety, for which spending isn’t mandated, unlike entitlements, including Medicare.
The plan split Republicans and was rejected by the party in an April vote.
Two Senate Republicans have stepped forward to offer plans that include deep spending cuts to balance the books.
Rand Paul of Kentucky would eliminate four departments such as education and commerce. He also would take most federal health-care and welfare programs and convert them to block grants to the states to cap spending. That includes Medicaid, a health program for low-income children, food stamps and child-nutrition programs.
“There are actually a lot of different departments we shouldn’t have,” Paul said. His plan was rebuffed in a 90-7 Senate vote.
Pennsylvania Senator Pat Toomey would cut non-defense discretionary spending to 2006 levels and freeze it for six years, slash $1 trillion from Medicaid and count on 3.05 percent annual economic growth -- compared with a 1.7 percent average since 2001.
‘Lays It Out’
“My budget lays it out,” he said. “It demonstrates a way to do it.”
An analysis by the Democratic-leaning Center on Budget and Policy Priorities in Washington said Toomey’s plan “relies on a rosy economic scenario.”
It would mean a 30 percent cut in 10 years to the portion of the budget that includes education, health research, law enforcement, transportation, much of homeland security and other programs, according to the study.
Hatch voted for both the Toomey and the Paul budgets.
Senator Richard Lugar, an Indiana Republican who is facing re-election in 2012 and is a top target of the Tea Party, which favors deep spending cuts, called a balanced-budget amendment an “important objective” for long-range planning.
He wouldn’t offer details on cuts. “I’m not going to get into an attempt unilaterally to lay out before you several thousand pages” of budget legislation, he said.
No Specific Cuts
Representative Flores, a freshman Republican, said he couldn’t name specific cuts “off the top of my head.”
Identifying cuts isn’t necessary at this point, he said, because the voters aren’t “trying to get down in the weeds on where the cuts would come. They want the balanced-budget amendment.”
Asked what reductions he would make to comply with a constitutional amendment, Representative Allen West, a first-year Republican from Florida, didn’t cite specific programs yet pointed to a Government Accountability Office study earlier this year that identified “about $200 billion of duplicative and redundant government programs.”
He said “wasteful spending” at the Department of Defense should be targeted to bring down the deficit, which is estimated to top $1.6 trillion this year. He didn’t mention weapons systems or health benefits.
During a visit to a base in his district, West said he noticed the military is starting “to be careful about buying toilet paper in the barracks.”
Reining in Defense
Reining in defense wouldn’t be easy. Annual defense spending has grown every year since 1998, rising about 155 percent to $690 billion in 2010 from $270 billion. That tops a 147 percent jump in annual Medicare outlays and an 86 percent increase in Social Security payments over the same period, according to data compiled by Bloomberg.
That difficulty was underscored on July 7 when 172 House Republicans, including Flores and West, defeated a proposal to freeze defense spending at 2011 levels on a 290-135 vote.
Lawmakers felt “a responsibility for these men and women who are out there fighting,” West said.
The Senate budget legislation is backed by all 47 Republicans and no Democrats. It would require balanced books five years after ratification. House Republicans plan to add their proposal as part of a package that would cut spending, place a cap on future government expenditures, and make a $2.4 trillion increase in the debt ceiling contingent upon congressional approval of the balanced-budget amendment.
The White House said today that Obama would veto the House legislation.
‘How It Works’
Republican Representative John Carter of Texas, another co-sponsor of the balanced-budget amendment, refused to discuss specific ways to cut Medicare, when asked how he would scale back the government health-insurance program to comply with a balanced-budget amendment.
“When you start talking about Medicare, you have to talk about how it works, and how it doesn’t work,” he said. “That’s a completely different discussion, and I am not going to get off into negotiating with you on Medicare.”
Senator Jim DeMint of South Carolina co-sponsored Toomey’s budget and said it would reach balance in 10 years.
“There are a lot of things we are doing at the federal level that we don’t need to be doing,” he said.
DeMint said specifics on cuts to meet a constitutional requirement would come later.
Democratic Senator Claire McCaskill of Missouri called the balanced-budget amendment “political posturing.”
“I find it hard to believe that anybody with a straight face voted to keep giving subsidies to Big Oil and then thinks we have to do a balanced-budget amendment,” she said.
Obama said the amendment isn’t necessary.
“The Constitution already tells us to do our jobs and to make sure that the government is living within its means,” he said at a July 15 news conference.
Robert Bixby, executive director of the Concord Coalition, an Arlington, Virginia-based group that advocates for balanced budgets, said Republicans would have to be willing to accept tax increases, something the party has refused.
“They can’t look to the Constitution to do all the heavy lifting, said. ‘‘I look at it as an avoidance device.’’
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