A Memo to Senator Harkin - The Importance of 18%

“Memories are short,” began Senator Tom Harkin (D-IA), whothen proceeded on a misleading rant against a Balanced Budget Amendment to ourConstitution. Harkin’s may look back with fond memories of the brief moment of budgetarybalance during the Clinton presidency, but he seems to conveniently forget howquickly those surpluses faded into enormous deficits under Democratic Congresses.

Harkin focuses his wrath on the 18 percent spending limit inthe current Balanced Budget Amendment proposal that will be voted on in theSenate in July.

“They said they want to limit governmentto 18 percent of GDP. I’d like to ask: Where does that number come from? Why isit 18% Why isn’t it 18.5 percent? Why isn’t it 17.5 percent? Why isn’t it 19.23percent? Where does it come from?”

The answer to that is quite simple. It wasn’t pulled out ofa hat. Republicans didn’t take a poll on what their favorite number was. Theyweren’t daydreaming fondly of a nice afternoon round of golf. No, 18 percent isthe post-WWII average for government revenue. But don’t take my word for it.The Congressional Budget Office’s recently released Long-Term Budget Outlooksays,

“Federal revenues have fluctuated between about15 percent and 21 percent of GDP over the past 40 years, averaging 18 percent.”

Given that constitutional amendments should be designed witha long nod to the past and an equally farsighted view to the future, 18 percentseems the most logical benchmark to ensure a balanced budget.

Of course, Senator Harkin completely tosses aside history,instead choosing to answer his own question, using a conspiracy theory straightout of the X-Files.

“Let me tell you where this comes from. The last time thatthe federal government was at 18 percent of GDP was 1967, before Medicarereally got underway. So read between the lines what the Republicans are saying,if they could get that down to 18 percent, we could do away with Medicare.”

What lines is he reading between?In actuality, the United States is teetering on the edge of default andMedicare’s finances aren’t looking much better. Charles Blahous, one of theMedicare Trustees, testified recently about the cuts that will be necessary toMedicare’s Hospital Insurance Program. “Medicare as we know it will end in2024, absent some change in policy or some change moving forward. That’s rightisn’t it?” askedRep. Peter Roskam (R-IL).
“Yes,” replied Blahous.

The unsustainable status quo isthe real enemy of Medicare. Anyone who wishes to preserve our currenttrajectory or ignore the needed reforms to put Washington on a viable fiscal courseare the ones who truly want to, as Sen. Harkin suggests, “do away with Medicare.”

Dramatic change is needed to reinin deficit, and yes, to preserve Medicare. Senator Harkin, perhaps unwittingly,makes one of the best cases for these structural changes in his own argumentagainst them.

Senator Harkin points out that thefederal government outlays haven’t been at 18 percent since 1967. The point ofthis otherwise damning statistic is apparently to tell us that America cannotpossibly survive at such spending levels. But with revenues averaging 18percent over that same time-span all it shows is how consistently irresponsibleCongress has been. In fact it is Washington’s inability to tailor its spendinghabits to revenue levels that has led to deficits 50 out of the last 54 years.It is that inability that has led us to the brink of bankruptcy that we nowface.

Memories may be short Sen. Harkin,but it is long past time for Washington to enact structural reforms to curbyour excessive spending habits. To that end, there are no better protection fortaxpayers than Cut, Cap and Balance. I encourage the Senator to look into it HERE.