Following a speech on the House Floor, Rep. Phil Roe just distributed a constituent newsletter announcing that the Congressional Budget Office recently issued an “alarming projection about future budget deficits.”
Roe’s newsletter goes on to recite misleading statistics that are not adjusted for inflation or for overall very substantial increases in Gross Domestic Product. He even asks voters to swallow numbers that involve basic math errors, such as his erroneous claim that a doubling of mandatory program spending over 14 years reflects a rate of increase of 7.5% per year. Roe appears to have made the financial rookie mistake of dividing 14 into 100 to get a rate of increase, which even then overstates because the result is 7.1%, not 7.5%. Roe’s calculation misleads because it does not consider the effect of compounding. If spending doubled in 14 years, then the rate of increase, taking into account compounding, is given by the Rule of 72, a basic financial tool used to estimate the time required to double a sum at a given rate of increase. Properly calculated, the rate of increase to double a sum in 14 years is 5.1%, or about 32% less than Roe’s purported 7.5% figure, not including any appropriate correction for inflation.
Having first embraced alternative math facts, Roe then concludes that because of this “alarming” CBO deficit report, he is more convinced than ever that we must have a balanced budget amendment to the U.S. Constitution.
Dear Rep. Roe — the deficit is not news. Perhaps you were sleeping when the CBO said the same thing back in 2017 before you voted for an unfair and budget-busting tax giveaway to corporations and the rich?
I’m not going to use this space to review all the reasons why Roe’s particular Constitutional proposal is a terrible idea. Each time Roe’s preferred version of a balanced budget amendment is raised anew from the dead, expert economists rally to explain how it is based on false premises and flawed analogies and how it would cause immense harm by promoting economic vicious cycles that:
- make recessions deeper and longer,
- increase unemployment during bad times,
- leave states and cities without key federal support that is essential to balancing their budgets,
- undermine the operation of Social Security, Medicare, and federal military and civil retirement,
- threaten operation of the programs that insure bank deposits and non-federal pensions when financial institutions fail.
For readers interested in a deeper understanding of what Roe wants our country to do, the non-profit, non-partisan Center on Budget Policy and Priorities publishes an excellent detailed analysis.
Fortunately, the measure that Roe advocates failed once again. Its defeat has become so routine that some observers suggest it is a “supreme act of hypocrisy” not really offered in good faith. If that is true, then Roe’s entire narrative is classic demagoguery.
If Roe was serious about reducing our deficit, as he should be, then he might abandon his simple-minded and reckless proposal and get behind something intelligent, like Switzerland’s system (which happens to be based on a Constitutional requirement). Switzerland, an international model of economic prudence, recognizes that economies have cycles and that responsible governments must have flexibility to adjust so that the ups and downs don’t result in harmful extremes. So, rather than insisting that revenues and expenses match exactly every year, as Roe’s Constitutional amendment would require, Switzerland balances its budget with a longer-term method that takes into account necessary short-term adjustments for changing economic conditions and cycles. Expansionary policy (deficit spending) is allowed during recessions or other national emergency; but if Swiss lawmakers want to be able to spend during recessions, then they must pay for this spending by saving during better times.
Of course something like the Swiss approach requires self-discipline, which Roe apparently thinks is impossible unless there is a rigid compulsion. In his words:
[Addressing budget deficits] will require hard choices, but Congress will only make those hard choices if it’s forced to. [bold emphasis added]
Roe never gets around to explaining who would enforce his proposed Constitutional amendment or what would happen if spending broke the rules. Would our already cumbersome national budget process become subject to further gridlock and delay from lawsuits? What would enforcement by the courts look like, it if was even possible? How would financial markets survive the uncertainty of Constitutional challenges to the budget?
A simpler and more direct way to “force” Congress to behave responsibly is to hold its members accountable and refuse to re-elect incumbents who are afraid or unwilling to actually do their job, even when it is most important.
Roe misleads his constituents with economic statistics to argue, unbelievably, that the huge tax cut for which he voted has nothing to do with future deficits. To support his phony economic reasoning, Roe says Federal revenues are at a high point. Yes, but so what? Deficits result from a mismatch between revenue and spending, not from the absolute level of revenue.
Also, Roe fails to mention that prior to the 2016 election, federal deficits had been falling quite dramatically, and could have fallen further if tax revenues had been left alone. The government can’t save to be ready for bad times if, as soon as things start to improve, revenues are reduced with a tax cut.
At the same time that he complains that federal revenues are too high, Roe simultaneously argues that his tax cuts will stimulate economic activity, and result in even higher revenues. Huh? It makes no sense for Roe to first argue that tax revenues are too high and then to argue that tax cuts are good because tax revenues will be driven even higher (or so he shamelessly predicts, even though his underlying economic trickle-down theory has been thoroughly dis-proven by nightmare failures).
Roe says that he wants government budgets to operate more like family finances. This is a hopelessly flawed analogy — but, accepting it for purposes of discussion, then doesn’t this analogy point directly away from Roe’s actual choices and actions? Instead of cutting taxes, shouldn’t Roe have focused on assuring that the government maintains its revenues so it can pay down its debts and save during good times for a future rainy day? No family in its financial right mind voluntarily cuts its income just because it has a good year. A financially responsible family pays down its debts, sets any extra money aside as a safety cushion, and tries to make sure that its income is stable or better, growing, and in any case sufficient to take care of expected future expenses.
The worst part of Roe’s bogus economic analysis is its wicked inhumanity. If Roe had voted to keep taxes where they were, the wealthy might have had less money to spend on mansions, yachts, and private airplanes, but the government could have made progress in paying off its debts, perhaps returning us to an era of federal budget surpluses last seen in 2001. Of course, that was before we were all misled into an extraordinarily expensive war based on false administration statements about threats from non-existent weapons of mass destruction.
Instead of staying the course and allowing increased revenues from the economic recovery to gradually address our debts, Roe cruelly wants to balance the federal budget on the backs and bellies of ordinary people. He would do this by making it harder to afford basic necessities of life, such as subsistence income, healthcare, and food. To this end, Roe’s message plainly identifies what he thinks are key items for spending cuts: pensions, Medicare, Medicaid, Supplemental Nutrition Assistance, and Social Security.
Roe’s harsh suggestion that Congress should cut earned benefits and safety-net programs directly threatens all the people who depend on them. And that is a large number of people. For example:
- In Tennessee’s First Congressional district, about 200,000 people receive Social Security benefits. These include retirees, the disabled, widows, spouses, and children. Since there are about 714,000 people in the district, this means that about 28% of Roe’s constituents could be directly harmed by cuts to Social Security. Even more would be indirectly harmed by the absence of these dollars from the regional economy.
- One out of seven of our Tennessee neighbors depends on food stamps. Many of these people work, but cannot earn enough to feed their families. Only a small fraction, about 6%, of food stamp recipients, are unemployed but deemed capable of working.
Rep. Roe apparently would rather decrease our basic lifeline security than require corporations and the rich to continue paying taxes as they have in the past. Tennessee is in the Bible-belt, and our values support a tradition of helping our neighbors in times of need — but there are not enough churches to make up the safety-net shortfall that Roe’s incomprehensible austerity could impose on our communities.
Ironically, Roe’s targets for spending cuts also threaten Tennessee’s own balanced state and municipal budgets, since Tennessee is among the states whose economies receive substantially more back from the federal government than we pay in federal taxes.
In addition to his tax-cut for the wealthy, Roe’s pattern of giving federal dollars to the most well-off at the expense of his own constituents also appears in his 2013 vote for the deceptively named “Full Faith and Credit Act.” This law established priorities for federal spending when the federal debt limit is reached — and the plan for which Roe voted assured that foreign creditors such as China, Japan, and OPEC countries like Iran and Saudi Arabia would continue to get their money even as payments to American citizens for earned benefits such as Social Security or VA benefits could be reduced or stopped.
The good people of Tennessee will face a clear choice in this November’s election. We can vote for transparent no B.S. straight-talk, or we can return to office an incumbent who is rarely willing to speak truth to power, who counts on people voting on automatic pilot, and whose newsletters and other communications assume that voters will not take the time to think critically about his superficial, misleading, and even inhumane policy arguments.
Thinking in particular of his targeting the Supplemental Nutrition Assistance program, perhaps it is time for us Tennessee voters to bite Rep. Roe’s hand, so to speak, before he votes to stop feeding us?
Responsible Change starts at home, one vote at a time, and it depends on each of us standing up to do our part.
I’m off my butt, standing up, and ready to do my part. How about you?