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GOP Senators Who Voted Trillions In Tax Cuts Now Back ‘Balanced Budget’ Amendment

Reprinted with permission from American Independent

Nine Republican senators introduced a proposed constitutional amendment on Wednesday that would both require a balanced federal budget and make it nearly impossible for the government to maintain even current levels of spending.

The resolution, backed by Sens. Cindy Hyde-Smith (R-MS), Marcia Blackburn (R-TN), Mike Crapo (R-ID), Joni Ernst (R-IA), Deb Fischer (R-NE), John Hoeven (R-ND), Jim Risch (R-ID), Marco Rubio (R-FL), and Thom Tillis (R-NC), would bar the federal government from spending more than it takes in during a given year.

While the proposed amendment would allow Congress to waive the balanced budget rules "for any fiscal year in which a declaration of war against a nation-state is in effect," it makes no exception for pandemics.

Every one of the sponsors voted to add trillions to the debt last year in emergency COVID-19 relief spending. Had this rule been in place, such action would have required a two-thirds vote in the House and Senate. The amendment contains exceptions only for cases of foreign wars or for situations where two-thirds of both congressional chambers deem it essential.

But in 2017, Blackburn, Crapo, Ernst, Fischer, Hoeven, Risch, Rubio, and Tillis all voted for the Tax Cut and Jobs Act, Donald Trump's legislation to cut taxes significantly for big business and the very wealthy.

They voted for this bill, despite knowing that it would raise deficits. According to the nonpartisan Tax Policy Center, the Trump tax law will likely "add $1 to $2 trillion to the federal debt" in its first decade by reducing revenue.

With declining tax revenue and massive new spending to address the coronavirus pandemic, the federal budget deficit for 2020 was an estimated $3.3 trillion, up from about $1 trillion the year before. To get that down to zero, as the amendment would require, Congress would either have to slash spending, increase tax revenue, or do some combination of the two.

But another provision of this group's proposal would make the second and third options virtually impossible: The amendment would require a two-thirds supermajority in both the House and Senate for the federal government to ever again raise taxes.

With the vast majority of congressional Republicans on record promising to oppose virtually any increase to individual or business tax rates, such a vote would be highly unlikely, meaning huge cuts to government programs would be required.

Yet another provision of this amendment would require a three-fifths vote in Congress to raise the federal debt limit, which would make it vastly more difficult to avoid default on the growing national debt. Several votes to increase the limit in recent years have been by a narrow majority. Experts say a default would be disastrous for the U.S. economy, which could further reduce revenue.

In a statement, Fischer explained her support for the "balanced budget" resolution, writing: "To ensure that our nation is fiscally responsible, Congress must stop budgeting crisis to crisis. Families in Nebraska and across the country have to make difficult decisions about their own budgets, and it is far past time for Congress to do the same."

Published with permission of The American Independent Foundation.

How Donald Trump Threatens The Retirement Of Every American Worker

This article was produced by the Independent Media Institute.

Tom Michels worked 31 years at LTV's iron ore mine in northern Minnesota—and had already started making retirement plans—when the company's bankruptcy wiped out his job and most of his hard-earned pension.

Michels took a series of odd jobs to make ends meet until he became eligible for the Social Security benefits that now enable the 71-year-old to buy food, cover health care costs and even travel a little with his wife, Vicky.

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New Data: Rich Got Richer, But Most Americans Fared Worse Under Trump

The first data showing how all Americans are faring under Donald Trump reveal the poor and working classes sinking slightly, the middle class treading water, the upper-middle class growing and the richest, well, luxuriating in rising rivers of greenbacks.

More than half of Americans had to make ends meet in 2018 on less money than in 2016, my analysis of new income and tax data shows.

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Trump’s Investment Boom — And Other Economic Myths

What sort of machine is the economy? The common conception is that it’s a fragile and sensitive device, highly responsive to both good and bad government policies. Pessimists worry that one or two wrong moves from Washington will cause it to seize up. Optimists think the right change in tax or regulatory policy can supercharge it.
The administration shares this general outlook.

Early in Donald Trump’s presidency, he and his economic advisers hailed what was coming. With Trump’s policies, declared Stephen Moore, “four percent growth can and should be the new normal in America.” After the president signed his big tax cut, Lawrence Kudlow said, “We’re on the front end of an investment boom.”

It was a nice fantasy. In 2017, real GDP grew by 2.2 percent; in 2018, it increased by 2.9 percent. In 2014 and 2015, under Barack Obama, the figures were 2.5 percent and 2.9 percent.

The investment boom hasn’t happened. “A slim five percent rise in 2019 capital spending is in store, down from last year’s six percent gain,” reported Kiplinger last month. “That is a small annual gain compared with past decades, when double-digit increases in capital spending were relatively common.”

The administration didn’t have any magic dust. Economic growth appears to be settling down around the level that Trump disparaged when Obama was president. The new normal is not much different from the old normal.
The latest Wall Street Journal survey of 60 economists found that they expect real GDP growth to total less than 2 percent in the second, third and fourth quarters of 2019. In 2016, the term Stephen Moore used for that rate of growth was “sluggish.”

“It’s no surprise,” Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, told WBUR. “Nearly everyone who looked at this, other than the Trump administration itself, felt that this would have very little effect on the economy.”

Trump’s critics, however, have also exaggerated his importance to the economy. Immediately after the election, Princeton economist and New York Times columnist Paul Krugman predicted a global downturn — though he quickly retracted that forecast. A year ago, Bank of America Merrill Lynch economist Ethan Harris warned that Trump’s trade war could cause a recession.

So far, however, the U.S. economy has kept chugging on along. Some sectors, particularly agriculture and autos, have suffered, but their troubles haven’t spread too far. The looming prospect of a bigger trade war with China and Europe has yet to throw much sand in the gears.

If anyone has shown presidents don’t matter for the economy, it’s Trump,” George Mason University economist Tyler Cowen told me. “All the uncertainty simply has not stalled the recovery.”

Other economists think Trump has had some effect on the economy. Says John Cochrane of Stanford University and the Hoover Institution, “The recent boost in growth does have something to do with deregulation.” Northwestern’s Robert Gordon says the tax cut boosted GDP growth, but only temporarily. He also says, “The uncertainties around tariffs and trade have contributed to caution on the part of businesses.”

But Trump has made less difference, for good or ill, than most people expected. The evidence suggests that for the most part, the economy is not fragile and flighty but sturdy and resilient. It’s not a lightweight canoe that requires endless adjustments and can be knocked off course by every ripple or breeze. It’s an aircraft carrier, moving forward in fair weather or foul and not easily stopped.

The tax cut that Trump said would be “rocket fuel” for the economy looks more like regular unleaded. The administration, however, is not about to admit that its policies are mistaken or ineffectual; it has to be that some powerful, sinister force is impeding them.

That would be the Federal Reserve, which the president and his allies blame for not cutting interest rates. But if his policies were as potent as we’ve been told, they would not wilt because our low interest rates are not a quarter-point or a half-point lower.

Back in 2016, Moore wrote: “The lesson of the Fed under Ben Bernanke and now Yellen is that easy money is no economic solution to this decade-long malaise. As economist Larry Kudlow puts it: ‘The Fed can print money, but it can’t create jobs.'” Now, they see easy money as the only hope.

Everyone knows how to take care of the economy, and often they’re wrong. Fortunately, it can usually take care of itself.