Pawlenty's Budget Amendment Misstep
It’s been a couple of months since Pawlenty began pitching his new balanced budget constitutional amendment idea. It is finally making a stir, although it may not be the kind he wants. Pawlenty wrote a piece regarding the long-term federal deficit for the debut of the Daily Caller on Jan. 11th, which was promptly ripped by Stan Collender of Capital Gains and Games, and subsequently ripped again by Mathew Yglesias of Think Progress. Both accused Pawlenty of “not being ready for prime time” when it came to budget issues, and took him to task over details of the piece.
Collander focuses his critique on the following line, pointing out that Pawlenty’s focus on discretionary spending ignores the real problem.
Pawlenty wrote:
Balancing the budget will require some tough decisions. Congress must reduce discretionary spending in real terms, with exceptions for key programs such as military, veterans, and public safety. The Congress must also reject costly new spending initiatives, like new health care entitlements.
To which Collender responded:
Someone needs to tell Pawlenty that discretionary spending except for "military, veterans, and public safety" is less than $400 billion a year. A real reduction of, say 10 percent (a ridiculous amount but use it for simplicity sake) would save a little more than $40 billion from the baseline and that doesn't come close to doing what needs to be done.
In addition, rejecting "costly new spending initiatives" isn't the same as paying for the old ones, like Medicare and Medicaid, that are the real budget problems.
Yglesias concurs with Collender, concluding that if you don’t want to talk about raising taxes and slowing the growth of Medicare, you shouldn’t be talking about the budget.
Point taken. Yet Collender and Yglesias don’t address the implied results of Pawlenty’s proposal. A balanced budget amendment essentially returns the government to a pre-New Deal pay-as-you-go system, except in times of emergency. Thus, a balanced budget amendment would restrict spending on entitlement programs to a certain percentage of federal outlays, meaning that the programs would shrink drastically, and would fluctuate significantly year by year.
This is what Pawlenty is actually pitching, without actually talking about it. This is the real danger of moving forward with such a proposal for a slogan. Rapidly fluctuating entitlement spending could send regular shockwaves through the national economy, creating chaos and potentially prompting erratic short term tax measures. Will Pawlenty defend this proposal as viable when he gets stuck in front of a camera and finally has to answer to it? Even if this is just political positioning, is it really the best means of impressing Club for Growth type fiscal conservatives?
Pawlenty has better options than this. He has an all-star budget record during two terms as Governor of Minnesota. He has certainly used sophisticated solutions to solve complex problems in the past, why abandon that now?