The Daily Hatch

 John Thune came to Arkansas to campaign for John Boozman last summer in his race against Senator Lincoln. One of the main issues in the race is the values of Arkansas voters and Thune claimed that the people in Arkansas were upset that the Federal Government was so committed to deficit spending.  In Thune’s view, Arkansas would send Washington a message by electing Boozman to the Senate.

Steve Brawner in his article “Safer roads and balanced budgets,” Arkansas News Bureau, April 13, 2011, noted:

The disagreement is over the solutions — on what spending to cut; what taxes to raise (basically none ever, according to Boozman); whether or not to enact a balanced budget amendment (Boozman says yes; Pryor no); and on what policies would promote the kind of economic growth that would make this a little easier.

Over the next few days I want to take a closer look a Cato Policy Report from July/August 1996 called “Seven Reforms to Balance the Budget” by Stephen Moore. Stephen Moore was the Cato Institute’s director of fiscal policy studies, and afterwards, a Cato senior fellow. This article is based on testimony he delivered before the House Committee on Government Reform and Oversight on March 27, 1996. Moore stated:

Over the past 50 years Congress has lost all control over federal spending. As Table 1 shows, even after adjusting for inflation, the federal government spends almost four times more today than it did 40 years ago. Entitlement spending has seen the largest growth. My overall conclusion from the data is that government today is America’s number-one growth industry.

A top priority for this Congress should be passage of a new budget act. The 1974 Budget Reform and Impoundment Control Act has been a monumental failure. One of the purposes of that act was to eliminate deficit spending, but this is the actual legacy of that legislation: in the 20 years before the act, the federal deficit averaged just 1 percent of gross domestic product, or $30 billion 1994 dollars. In the 20 years since the 1974 act, the average budget deficit has been $170 billion per year, or 3.5 percent of GDP. We have accumulated more than $4 trillion in debt since 1976. By any objective standard, the budget process has not worked better under the 1974 act–it has worked much worse.

Figure 1 shows how the budget deficit has grown since Harry S. Truman was president. Despite recent progress in reducing the deficit, the long-term prognosis remains grim. In fact, the Congressional Budget Office predicts that if we stick with the Clinton budget plan, the deficit will begin rising after 1996 and reach a record high of $350 billion within 10 years.

The 1974 Budget Act cannot be fixed. Tinkering won’t do the trick. Congress ought to repeal the act before it does more damage to our national economy.

The centerpiece of any budget reform quite clearly should be an amendment to the Constitution outlawing deficit spending. Most members of this committee are keenly aware of the need for a balanced-budget requirement, so I will not dwell on it.

Table 1: 40 Years of Government Growth

__________________________________________

Senator Pryor in this clip below praises President Obama and his healthcare program. Mark Pryor praises all the great work the three Democrat Representatives have done and talks about their upcoming re-elections. Little did he know that only Mike Ross would be re-elected. He spent extra time talking about the re-election prospects of Senator Lincoln.