Today the House will be voting on a Republican bill (H.J.Res. 2) to amend the constitution with a “Balanced Budget Amendment” (BBA) which which would destroy jobs, drastically cut Medicare and Social Security, and give federal judges power to raise taxes and make spending decisions. Major impacts of the bill:
Risks default by the United States by requiring a supermajority to raise the debt limit
Destroys 15 million jobs and doubles unemployment to 18 percent:
If enacted in FY 2012, nonpartisan economists with Macroeconomic Advisers LLC estimate that enactment of a BBA would eliminate 15 million jobs, double the unemployment rate to 18 percent, and cause the economy to shrink by 17 percent.
Harms seniors by cutting Medicare and Social Security and veterans by reducing benefits:
According to the Center on Budget and Policy Priorities, this amendment could result in Medicare being cut about $750 billion, Social Security almost $1.2 trillion, and veterans’ benefits $85 billion, through 2021, if cuts were spread proportionately.
Worse than the draconian cuts in the Ryan/House GOP budget:
The Ryan/GOP Budget wouldn’t even reach balance until the 2030s; this BBA likely would require balance by about FY 2018.
Opens the door to courts to intervene in federal budget decisions:
By placing a balanced budget requirement into the Constitution, federal judges could have the final say on taxing and spending decisions, even determining whether the budget was balanced in the first place.
For 318 days in the majority, House Republicans have failed to offer a comprehensive jobs agenda and they are once again bringing a bill to the floor that would do the opposite of creating jobs. Even Reagan advisor Bruce Bartlett predicts that if a BBA was implemented now, it would cause another recession:
Bruce Bartlett, a top economic advisor in the Reagan Administration, points out, “It’s one thing to require a balanced budget when starting from a position of balance or near-balance. It’s quite another when we are running deficits of over $1 trillion per year for the foreseeable future. … A rapid cut in spending of that magnitude would unquestionably throw the economy into recession just as it did in 1937.”
As Leader Pelosi explains in her floor speech in strong opposition, “if this were just about talking about how we can reduce the deficit, the best way to do that is job creation…here we go again debating legislation that will not create jobs. In fact, according to experts, enactment of this proposed amendment to our constitution would destroy 15 million jobs, double the unemployment rate, cause the economy to shrink by 17 percent.”
The House is expected to vote on the bill under suspension of the rules early this afternoon.
UPDATE: The House rejected the bill which needed 2/3 for passage by a vote of 261-165.