FEDERAL BUDGETING AND THE USUAL GOP MISINFORMATION...

Readers and followers: Will soon be heading back home so replies to comments will become more regular.

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There is nothing more irritating to me than a tea party backed Senator who makes cutting spending and balancing the budget sound easy, especially when the remedy includes glaring misinformation. But such was the case last Monday in an op-ed piece written by the new Republican Senator from Utah, Mike Lee, who proposes a balanced budget amendment to the Constitution. Happily, amending the Constitution is a difficult process and similar efforts for balancing the budget in the past have crashed and burned. Lee claims that a bipartisan majority in the Senate and a large number of House members "recognized this urgent need and expressed support" for the proposal, whatever that phrasing means in actual legislative and voting support.

Lee's proposed amendment would hold federal spending to 18 percent of gross domestic product and require a two-thirds vote to increase taxes, raise the debt limit, or run a "specific deficit", whatever that term means. His plan is not exactly a groundbreaking idea. Similar constitutional amendments have been put forth in the past, but every new Senator (or Representative) with two months experience on the job wants his constituents back home to believe he has hit the ground running. One of his shop worn ideas is the usual GOP one of requiring a super majority to raise taxes but only a simple majority to cut spending.

Both Democratic and Republican Presidents have from time to time found it necessary to raise taxes and that reality may again have to be faced sooner rather than later. So to require a two-thirds majority for a tax increase may at some point become a major nonpartisan burden. Further, what taxes is he talking about -- all taxes, income, payroll, gasoline, inheritance, or what? Okay, so much for a freshman Senator trying to make a splash back home with borrowed ideas. But to me the real aggravation came with his statement that the vast majority of states "have constitutional or statutory mandates to balance their budgets each fiscal year." At best, this is only a half truth, one that is often trotted out by spending hawks.

In fact, most states are required to balance only a part of their budget and a few states don't even have to do that. If required as Lee asserts, those states only have to balance what is commonly called the general fund or operating budget part of a state's annual fiscal plan. That is the part that takes care of day-to-day operating expenses such as salaries and benefits of state employees, medicaid, education, public safety, and so on. And even these states often balance the general fund budget by not setting aside money for future retirement obligations, delaying tax refunds, or some other form of "smoke and mirrors" that kicks current spending needs down the road to the next year or some even more distant fiscal year.

But that is only part of Lee's misinformation about states balancing their budgets every year. States have a second budget -- the capital budget -- that is not included in any requirement for annual budget balancing. To the extent that the capital markets are willing, states borrow money for long-term capital investments such as new office buildings, land acquisition for whatever reason, and their share of road and bridge construction (a large share of the last item comes from the federal government), etc. Thus, contrary to Lee and the large host of other fiscal hawks, state spending is not balanced at all; it is significantly funded with borrowed money.

Compare that with federal budgeting which has a single, consolidated budget, although there is a long history of so-called "off budget" spending for such things as wars to reduce the bottom line on the annual deficit. Thus, whether the federal government is spending money for operating costs such as health care and education, or for long-term investments in combat ships and plans, or for rebuilding deteriorating barge locks on the nation's waterways, it all falls into one budget. Without the advantage that states have of a separate capital budget, the tea party and fellow spending hawks are free to beat the federal government over the head about out of control spending, deficits, and debt. I have no idea what it would mean for the bottom line if the federal government had a separate capital budget, but you can be assured that the annual deficits would be far lower than is now the case.

If people like Lee, and there are hordes of them, insist on misinforming the voter about federal spending, we first need to level the playing field when comparing federal-state budget rules so, to mix a metaphor, we can compare apples with apples.