So, Senate Republicans, including Marco Rubio, are submitting legislation for a Balanced Budget Amendment. Here are the broad strokes:
– Requirement to Balance the Budget: With limited exceptions, the federal budget must be balanced.
– Presidential Requirement to Submit a Balanced Budget: Prior to each fiscal year, the President must submit to Congress a balanced budget that limits outlays to 18 percent of GDP.
– 18 Percent Spending Cap: With limited exceptions, Congress must limit outlays to 18 percent of GDP.
– Supermajority for Tax Increases: Establishes a new supermajority requirement for net tax and rate increases.
– Supermajority to Raise the Debt Limit: Establishes new supermajority requirement for an increase in the debt limit.
Reality check: Even with the sequester cuts, CBO predicts a budget gap of 3.8% in 2023 — and that’s including revenue/GDP of 19.1%, above its historical average of 18%. And spending will be at 22.9% of GDP, including nearly $900 billion of interest payments. Where will those nearly 5% of budget cuts come from if such an amendment should pass? It is hard to take the BBA seriously without a plan. And as I wrote the other day, cooking up a legit plan will be difficult. And a spending target of 18% long-term, giving the aging of US society, would require a radical transformation in the size and scope of government. Doubt the GOP has really made that argument.