Saturday, January 15, 2011

Hatch/Cornyn Balanced Budget Amendment

Senator Orrin Hatch (R-UT)
Senator John Cornyn (R-TX)
Senators Orrin Hatch (R-UT) and John Cornyn (R-TX) have proposed a new balanced budget amendment, one designed to compel the Federal Government to put its financial house in order each year.

They have written a cover letter seeking co-sponsors within the Senate, and have made available the provisions for everyone to review. It is not difficult to understand. Unlike legislation we have seen over the past two years, it is a few short pages, concise, to the point and ready for action.

Perhaps America is finally ready for such a bold step. It failed by only one vote a few years ago. Had it passed back then we may have avoided the financial house of cards that has been erected since then.

For it to pass and be enacted, here's the array of hurdles it must leap: 1) a two-thirds vote of approval in each of the two bodies, the U.S. House of Representatives and the U.S. Senate; followed by 2) ratification by three-fourths (38) of the number of the individual state legislatures.

It's time to begin the writing campaign to your members of Congress.  If you really believe the November election was about putting our financial house in order as a nation, then voice your support NOW.

It's a tall order, to be sure, but not impossible. If two-thirds of the members of both houses of Congress can discern the will of their constituents based upon the results of November's election, then perhaps there will never be a better time in our history when the over-spending, the constant increase in the debt ceiling and the deficits can be curbed and eliminated.

The Hatch-Cornyn letter to their colleagues points out what should be obvious in the hearts and minds of all Americans: “They don’t want any more empty rhetoric or excuses.” The time to slash government spending is NOW, and a balanced budget amendment is as good a place to start as I can imagine.

When the 112th Congress reconvenes the week of January 25, 2011, they will find a proposed Constitutional amendment simply stating that total spending cannot exceed total receipts; total spending for any fiscal year cannot exceed 20 percent of the gross domestic product of the previous calendar year; and a two-thirds vote would be needed in both chambers to pass legislation that increases taxes. A two-thirds vote would also be required to waive any of the other limits, although the limits may be waived if war is declared or an imminent threat is declared by a joint resolution of Congress. That's language anybody can understand and comprehend. Beware of those who preach fear of what might happen if the initiative passes.

Also included is a provision compelling the Executive Branch -- the President of the United States of America -- to submit a balanced budget each year. That would be a clear improvement.

Hatch’s office is reporting they are picking up co-sponsors and looking for more.

Senator Mike Lee (R-UT)
Already on board are Republican Senators Saxby Chambliss (GA), Jim DeMint (SC), Olympia Snowe (ME), John Ensign (NV), Mike Enzi (WY), and David Vitter (LA). Hatch discloses in his letter to his colleagues that their proposal has picked up endorsements from the American Conservative Union and Americans for Tax Reform, with other conservative groups certain to follow. You can bet my new favorite Senator Mike Lee (R-UT) is going to be deeply involved in championing its passage.

They also remind their colleagues in their letter about a comment by Joint Chiefs of Staff Chairman Admiral Mike Mullen, who said the national debt is "the most significant threat to our national security.”

“Yet year after year, decade after decade, Congress proves that it will not solve the crisis on its own,” the letter said. “There are simply too many ways for Washington to avoid controlling spending and balancing its budget. But continuing failure and a deepening budget crisis are not acceptable.”

Here's the latest scorecard for deficit watchers: At the end of the government's fiscal year 2010 (October 1), the deficit was slightly less than $1.3 trillion, according to the Congressional Budget Office. The final numbers are in for the 2010 deficit, and it amounted to 8.9 percent of the gross domestic product, the second highest level as a share of the economy since 1945.  It has deficit watchers nervous for good reason.

Let me remind you what a large number the deficit is:


Numbers that appear in brackets on a financial report are negative numbers and they are posted in red, hence the phrase "red ink."  The deficit is the difference between what the federal government is taking in and what it's spending.  That trend must be reversed because it cannot be sustained indefinitely.

Treasury Secretary Timothy Geithner warned last week the nation will hit the debt limit as soon as the end of March.

Here are the latest numbers on the debt picture as of last week: Total debt outstanding that is subject to the limit was $13.95 trillion, roughly $335 billion below the $14.29 trillion limit set by Congress in February 2010.  You also need to be reminded about what a large number our debt ceiling really is:


When he was the lowly junior Senator from Illinois, Barack Obama vehemently trumpeted his opposition for an increase in the debt ceiling at a time when America was at war.  His stated position as a Senator will now be tested as the POTUS. We'll see if he was just blowing smoke as a Senator.

A word of warning in the weeks that lie ahead.  Fear tactics will be deployed by this administration to manipulate the 112th Congress into raising the debt ceiling, predicting dire consequences if it isn't done.  There may be increasing threats of a government shut down. Government workers may be faced with their share of the unemployment burden. Business as usual will be revised. It's obvious the 111th Congress would have been a pushover for more debt and spending against such threats. Let's see if this first stern test for the 112th will signal a change in attitude among elected officials.

My bet: The debt ceiling will be raised but not before there are some profound agreements in place to curb spending. If you get a raised debt ceiling with little or no opposition, it will be an early warning sign the 112th is nothing more than a clone of the 111th.

Speaker of the House, John Boehner (R-OH)
Here's another sign to watch for meaningful change.  If Harry Reid and the Democrats in the Senate continue to award committee chairmanships to members based solely upon their longevity in seniority, you may know it will be business as usual.  There are some early signs he may be rethinking that long-standing tradition and Americans would welcome that adjustment.  John Boehner (R-OH), the new Speaker of the House who replaced Nancy Pelosi, would be well-advised to make similar adjustments.  If the two parties would voluntarily dismantle the seniority system together, it would not have to be done by Constitutional amendment.

CBS just completed a poll of public opinion on what should be the first order of business for this new Congress. Those sampled say they are willing to reduce spending first, and do not favor raising taxes.  I know, it's a no brainer, but maybe Congress needs to be reminded.

This just in -- they also want the deficit spending spree to stop, to the tune of 77 percent!

The next few weeks portend good things to come if Congress will deliver on what matters most. A symbolic vote to repeal Obamacare in the House, since repeal has no chance in the Senate and Obama would veto it while he remains in office, is not one of those things that matters most.

The House would be better advised to stick to its knitting on balancing the budget by passing the Hatch/Cornyn proposal.

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