There are two parts to every budget. You have spending and you have revenue. You and I know all about our spending and our revenue; where it comes from and where it goes. Congress gets it’s revenue from us, in the form of taxes. If, like our Federal Government, you spend more than you are taking in, you either raise more revenue (taxes) and/or you cut spending to get it to balance.
In 2010 the US government spent 3.5 trillion dollars and took in 2.2 trillion in taxes. That leaves 1.3 trillion that needs to be balanced. President Obama’s proposal that includes taxing (just) all of those “rich” guys would raise an additional 80 billion. That is “billion” as in a 1/1000th of a trillion.
We need 1300 billion more dollars to balance the budget. 80 billion is a drop in the bucket, and does not touch the real issue of overspending.
Sen. Udall’s amendment says that spending can not exceed revenue in any year unless 60% of Congress vote to override this provision.
It does not say that they have to spend less. It does not say that they can’t tax more. It actually prohibits cutting taxes of anyone making a million or more. Our Democratically controlled Senate is so embarrassed at their own level of spending they have not even submitted, much less voted on, a budget in over two years, even though it is required by law. Do you think that the Democratically controlled Senate would suddenly gain some backbone and not only submit a budget, but one that is balanced. Yes, they would, if this amendment had force of law. This amendment will allow them to raise taxes on everyone, and point to it and say “We had to, it’s the law”
Those taxes would be devastating. If you are collecting 2.2 trillion and you need to collect another 1.3 trillion, then everyone taxes are going to have to jump by 50%. You can’t just take the money from the rich. They don’t have it. http://www.taxfoundation.org/news/show/250.html#table3
The data from the link only goes to 2009. In 2007, before the Great Recession, and the highest amount listed, the top 1% had 2 trillion total. Take it all and you are still short. They are also wiped out and won’t have another 2 trillion to steal next year.
Senator Udall’s amendment is not designed to balance the budget. This is a tool to give political cover to all Democrats running for Congress next year. It has no hope of passing. An amendment to the constitution needs a 2/3 vote, not a simple majority. You couldn’t get 2/3 of this Congress to vote to endorse the continuation of Christmas. The Democrats and Mark Udall know this. Next year come election time, there will be the political ads telling you how the incumbent Democrat voted to balance the budget, while the incumbent Republican will have voted against it. Count on it. Write it down.
A real balanced budget amendment would put a cap on spending. Say 20% of the Gross Domestic Product (GDP). That way Congress would encourage businesses to produce more, raising the GDP. They in turn would hire more people to do all that producing. More production equals more GDP, which would equal more tax money that could be spent.
It would need a penalty with teeth. Something like Warren Buffet’s proposal to prohibit members of Congress who failed to balance the budget to run for reelection. That would get their attention. Threaten to take away a Senator’s right to run for office and he will try roller skate on the Potomac River to prevent it.
Balancing the budget would have to be phased in. We can not drastically cut Social Security, Defense, or Medicare in one year. Effectively cutting federal spending in half in one year would throw us into a Depression. But people will have to start taking personal responsibility and give up thinking that Uncle Sam is their daddy.
The tax code will have to be adjusted. Tax rates might have to go up, and everyone, the poor included should pay something. It’s only right.
But this will take leadership and hard choices. There is no one in Democrat party, especially not the President who is up to the task. It has been three years and spending is up and the hole has only gotten deeper. Time to take away the shovel and stop voting for people like Mark Udall.