Surprise, surprise. Ohio Gov. John Kasich (R-Revolving Door Wall Street) made an appearance on this weekend's Fox News Sunday, sounding the alarms that we had better pass a balanced budget amendment to the constitution or we're all gonna' die! And he really doesn't want the capital gains tax raised. That might harm those "job creators."
Host Chris Wallace even asked Kasich about some of the warnings we've heard about the proposal, and Kasich just blew them off and claimed the Congress could make exceptions for unusual circumstances.
WALLACE: All right. I want to talk about something else you think the country could learn from because you are touring the country right now, pushing for a constitutional convention to pass an amendment to the Constitution for a balanced federal budget. Why?
KASICH: Chris, we're 18 trillion in the hole. And I went to the Republican Convention and that's all they talked about. Now, I hope they'll do something about it now that they have a majority. The fact is, when I left Washington after being one of the architects for a balanced budget, they blew a $5 trillion surplus. This is about protecting our kids, the next generation and providing economic growth today. And just think about a convention, if we would go to a convention instead of kids focusing on Justin Bieber and Tom Brady and deflated footballs, maybe they would start thinking about Ben Franklin and Jefferson and Madison and Monroe and we can renew our country. It can be exciting to force the Congress to be responsible. That's why I'm out there doing this.
WALLACE: Forgive me for interrupting. But we've got limited time. Here is the knock ...
WALLACE: Here is the knock on a balanced budget amendment that there are times when the economy is weak when you need some deficit spending to prop up people, for instance, when a lot of people were out of work and you need to pay more unemployment benefits. And also, for instance, Social Security would only be able to spend the amount of money that it takes in that year and so a lot of critics say you would end up cutting benefits. Your response?
KASICH: Chris, we are 18 trillion and we keep fiddling, we're going to be 30 trillion. We are fiddling around while Rome burns. Now, of course, any kind of an amendment can have appropriate exceptions, economic calamity, war, but the fact is most of the time when you keep doing things that we don't do in the states and families don't do, which is spending without regard, we are mortgaging our children's future. This is not a new thing for me. I have been pushing this since I was 27 years old and I'm going to keep pushing it.
Presidents come and presidents go, but changing the culture in Washington and locking in a balanced budget amendment will provide for economic growth today and a hope for our children tomorrow, Chris.
God knows Kasich and his fellow Republicans would never use a financial crisis as an excuse to gut our social safety nets and privatize Social Security, right? Robert Greenstein and Richard Kogan explained why expecting Congress to take emergency measures even under the best of circumstances isn't likely to happen: A Constitutional Balanced Budget Amendment Threatens Great Economic Damage:
A balanced budget amendment to the U.S. Constitution — including the version that the House is expected to consider this week — would be a highly ill-advised way to address the nation’s long-term fiscal problems. It would threaten significant economic harm while raising a host of problems for the operation of Social Security and other vital federal functions.
The economic problems are the most serious, and they would pertain to any version of a constitutional balanced budget amendment. By requiring a balanced budget every year, no matter the state of the economy, such an amendment would raise serious risks of tipping weak economies into recession and making recessions longer and deeper, causing very large job losses. That’s because the amendment would force policymakers to cut spending, raise taxes, or both just when the economy is weak or already in recession — the exact opposite of what good economic policy would advise.
When the economy slows, federal revenues decline or grow more slowly and spending on unemployment insurance and other social programs increases, causing deficits to rise. Rather than allowing the “automatic stabilizers” of lower tax collections and higher unemployment and other benefits to cushion a weak economy, the amendment would force policymakers to cut spending, raise taxes, or both. That would launch a vicious spiral of bad economic and fiscal policy: a weak economy would lead to higher deficits, which would force policymakers to cut spending or raise taxes more, which would weaken the economy further.
The fact that states must balance their budgets every year — no matter how the economy is performing – makes it even more important that the federal government not also face this requirement and thus further impair a faltering economy. And, while the amendment would allow Congress to waive the balanced budget requirement with a three-fifths vote of the House and Senate, that hardly solves the problem. Recent experience shows the difficulty of securing a three-fifths vote in both chambers for almost any major legislation. Read on...