Mediaboss Marketing

The first policy proposalRandPaul announced inhis big speech declaringhis presidential campaign this weekwas an old-fashioned planfor the federal budget. The Republican senatorfrom Kentucky wantsto amend the Constitution torequire a balanced federal budget every year.

The basic idea is to force Congress to spend no more than the governmentreceives in taxes annually. Past versions of the proposed amendment would have also limited Congress's total spendingrelative to the size of the overall economy.

Pauland other proponents on both sides of the aisle say amending the Constitution isthe only way to enforce fiscal discipline in Congress. By puttingan old staple of GOP policy at the top of his agenda, Paul may be able to expandhis appeal among primary voters concerned about the deficit.

Yet the amendment itself isn'ta plan to managethe national debt in the long term, just a broadly stated goal.Reaching it would stillmean hard political choices and contentious negotiations.

A balanced- budget amendment fell one vote short ofpassing Congress in 1995. A few years later,lawmakers and President Clinton balanced the budget anyway amid a rapidly growingeconomy.InClinton's last year in office, thefederal government tookin $236 billion more than itspent, according to the Congressional Budget Office.

The budget fellinto deficit again underPresident Bush. He reduced taxes, generously expanded Medicare benefits for prescription drugs, and ordered U.S. troops into Iraq and Afghanistan. Collectively, Bush's policies expanded the federal debt by more than $5 trillion.

Then thefinancial crisis struck.With fewer Americans getting paychecks, the government was taking even less in taxes, and spending more on things like unemployment insurance. In addition, President Obama and Congress approved a costly fiscal stimulusin a moderatelysuccessful effort to stabilize the economy.By the end of Obama's first year in office, the deficit had expanded to $1.4 trillion.

Large deficits meantthe federal budgetwas ahotly debated topic again. Republicans used the debt ceiling to force a series of budgetary negotiations. If the debt ceiling had expired, policymakers would have been forced tobalance the budget immediately or risk national default.

In 2011, Republicansagreed to an increase in the ceiling in exchange for reduced spending and promised votes in both chambers on a balanced budget amendment. Itfailed again.

Rep. Paul Ryan (R-Wis.), who would later become a vice-presidential candidate, voted against the amendment, saying it wasn't strict enough. He wanted an amendment that would also bar Congress fromraisingtaxeswithout a two-thirds vote.

See original here:
Wonkblog: Why Rand Paul wants Congress to balance the budget every year