Political Correction

The Problem With The GOP's 'Family Budget' Argument

November 18, 2011 9:51 am ET - by Walid Zafar

In the days leading up to today's vote on the balanced budget amendment, House Republicans have come to the floor to make their case for passing an amendment that would require the federal government to 'balance its checkbook.' The Senate has a different version of the legislation, but both have the same idea and both have been sold using the same popular analogy.

As Rep. Renee Ellmers (R-NC) explained Tuesday night, "All of our homes, we all live by budgets. The American people have had to redo their budgets over and over and over again. Why? Because of the economy that we're in today, because of the cost. And yet the federal government does not do this." Rep. Jean Schmidt (R-OH), standing in front of a poster of an elderly woman looking at her bills, said, "My family that's back home, my brothers and sister and nieces and nephews that are probably balancing their own checkbooks sometime this week, they get it."

Most Americans do get it, and that's why the message Ellmers, Schmidt, and other advocates of the balanced budget amendment advance is widely viewed as a common-sense approach to the very urgent problem of the spiraling national debt. Hardworking Americans balance their checkbooks, so why shouldn't Washington?

But the family budget comparison is dishonest, silly, and actually undermines the case for balancing the budget through sledgehammer cuts and tax and spending caps.

For starters, no family would voluntarily impose a cap on how much revenue it could bring in or stop its members from earning higher incomes. Imagine if one spouse said to the other: "Hey, don't go for that promotion. If you earn more money, that might lead us to spend more, and we want to be spending less." Yet that's exactly the goal of the lawmakers who support the balanced budget amendment. As Ellmers explained, "This version makes it harder to raise taxes."

"The truth is that Republicans don't care one whit about actually balancing the budget," explains Bruce Bartlett. "If they did, they would want to return to the policies that gave us balanced budgets in the late 1990s." Instead, what we see is the exact opposite platform, with Republicans insisting that deficit must be cut while at the same time clamoring to extend the Bush tax cuts, despite the fact that they are among the largest drivers of our national debt.

The balanced budget amendment isn't so much about ensuring that we spend what we bring in to the Treasury as much as it is about reordering our spending so that it requires as little revenue as possible. It's an anti-tax initiative that's being sold as some sort of pro-responsibility measure. But responsible it is not. (As we've explained here, the balanced budget amendment will not work and could even make future recessions much worse.)

In another critical way, the family budget comparison actually demonstrates that most families do operate in much the same way as the federal government. Many Americans are in debt; we have credit card balances, student loans, and mortgages. If we were only to spend what we already saved up, or what we bring in as income, few would be able to attend college after high school and very few would be homeowners. Like the government, we borrow all the time.

Not only do we borrow, but so do most businesses. Conservatives insist that government operate like a business, but they ignore the fact that almost every business, from the mom-and-pop small business to the megacorporation, is in some sort of debt. The crucial distinction is that businesses borrow in order to ultimately earn profit for their shareholders. The government borrows to maintain important social and economic programs for its citizens and does not simply stop spending money on something like, say, funding for public education because its return on investment is lower than what some analyst had projected.

Federal deficits do need curtailing. But a mindless balanced budget amendment is nowhere close to fiscal sanity.

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