|

Some GOP candidates call for balanced-budget amendment

BY RISHABH R. JAIN | DECEMBER 09, 2011 7:20 AM

Caucus candidates' stances on reducing national debt

Newt Gingrich
Gingrich opposes the formation of the Supercommittee and says cuts in government spending will spur economic growth and reduce the deficit. He believes job creation will help balance the budget.

Mitt Romney
Romney wants to cut non-security discretionary spending by 5 percent along with reforming Medicaid and other entitlement programs. He wants to cap government spending at 20 percent of the nation's GDP and pass a a balanced-budget amendment to the Constitution.

Rick Perry
Perry's Cut, Balance, and Grow Plan seeks to reform Medicare and give employers the choice to opt out of Social Security. He wants to cap government spending at 18 percent of the country's GDP. He said this would balance the budget by 2020.

Jon Huntsman
Huntsman has been unclear about the specifications of his debt plan but firmly wants to repeal the recent health-care reforms and related taxes to reduce increased spending on health care. His proposals have concentrated more on decreasing regulatory reforms and says job creation would improve the economy and balance the budget.

Ron Paul
Paul says he will balance the budget by the third year of his presidency. Paul wants to eliminate such federal departments as Energy, Housing and Urban Development, Commerce, Interior, and Education and to stop all foreign aid and end America's current foreign interventions. He says these reductions would cut more than $ 1 trillion in government spending during the first year of his presidency.

Rick Santorum
Santorum supports a balance-budget amendment to the Constitution that would restrict government spending. He says while spending cuts help in the short-run, long-term fiscal security can only be achieved by passing the balanced-budget amendment.

Michele Bachmann
Bachmann supports repealing heath-care reform and would accept an increase in the debt ceiling only if extensive steps are taken to reduce spending. This she says, will add $1 trillion to the budget. Bachmann said she wants to reduce the size of the government and enforce cuts on government spending.

Gary Johnson
Johnson wants to eliminate excess spending, stop stimulus packages to the economy, and end farm subsidies. Johnson said he wants to stabilize Social Security and Medicare through reforms and eliminate the Federal Reserve's control over monetary policy.

SocialTwist Tell-a-Friend

About one out of every three dollars the federal government spends is borrowed.

That's troubling to the pack of Republican Iowa caucus contenders, but some scholars say the U.S. debt crisis isn't so urgent.

"In the short term, we shouldn't worry about the debt crisis at all. We have much bigger problems in the economy itself," said Roberton Williams, a senior fellow at the Urban-Brookings Tax Policy Center. "In the future years, though, we have to move from a deficit situation to a surplus situation. If we stop adding to the debt, we will easily grow ourselves out of it."

Costas Meghir, an economics professor at Yale University, agreed with Williams.

"The problem seems to be more political than economic," Meghir said.

A federal deficit-reduction Supercommittee failed to reach an agreement on spending cuts earlier this year, triggering $1.2 trillion in automatic cuts in 2013 unless Congress acts before that time. In short, the committee failed because Democrats want to increase revenue by increasing taxes on the rich, while Republicans want to reduce spending on entitlement programs.

As a solution, some Iowa caucus candidates — including former Massachusetts Gov. Mitt Romney, former Utah Gov. Jon Huntsman, and former Sen. Rick Santorum, R-Pa. — are pushing for a balanced-budget amendment to the Constitution. Such a move would prohibit Congress from passing a deficit budget. Similar laws exist in Germany and Switzerland.

"I think such an amendment would be a mistake," Meghir said, contending that a balanced-budget amendment would cripple infrastructure development.

Mike George, the founder of Strong America Now, an organization that hopes to balance the budget by reducing waste in the federal government, said his group supports balancing the budget but policymakers should aim for surpluses instead of just balanced budgets.

"Merely balancing the budget is not enough," he said. "The debt crisis is a here-and-now problem, and we have to realize that we need to aim to increase surplus. Our economic plan makes that happen by employing waste reduction." 

The U.S. Defense budget is another important thing on the agenda for the forthcoming elections; the government spends a huge amount of its revenue on national security. President Obama's budget proposal would increase military spending, but the proposal also includes reforms that the administration says will cut $78 billion from the budget by 2016.

Ruth Benn, coordinator at the National War Tax Resistance Coordinating Committee, said the United States ought to cut war spending altogether. Her group encourages people to keep their incomes low so they don't have to contribute tax dollars to military spending.

"Human beings are smart enough to figure out how to solve problems without launching missiles," she said.

Many GOP candidates want to cut other spending but preserve defense allocations. Candidates such as Romney and Texas Gov. Rick Perry, for example, aim to reduce overall government spending while maintaining the Defense budget. Rep. Ron Paul, R-Texas, is one of the only candidates calling for massive cuts in defense spending.

Williams said merely cutting spending will not create a surplus. He said tax cuts proposed by the GOP candidates will negate the effect of spending cuts.

"One of the problems is that we have lowered the taxes for the last 10 years," he said. "Now, we need to increase the revenue, but we have one party saying we will never ever raise taxes. That is a problem."

Republicans, though, hope their tax cuts will spur economic growth, in turn spurring more federal revenue.

"Nothing would do more to balance the budget than to go back down to 4 percent unemployment," former House Speaker Newt Gingrich said at the Conservative Political Action Conference early this year.


In today's issue:


comments powered by Disqus



 
Privacy Policy (8/15/07) | Terms of Use (4/28/08) | Content Submission Agreement (8/23/07) | Copyright Compliance Policy (8/25/07) | RSS Terms of Use

Copyright © The Daily Iowan, All Rights Reserved.