Halt starvation diet

LITTLE ROCK — “Starve the Beast” has failed. Twice.

“Starve the Beast” is the small-government proponents’ strategy of reducing taxes, never voting for tax increases, and hoping that mounting debt will force Congress to cut spending and the size of government. It was tried in 1981 with the Kemp-Roth tax cuts, and again in 2001 with the Bush II tax cuts, massive reductions in revenue not balanced by equivalent spending cuts.

Both efforts produced deficits and debt greater than anything seen before. Cutting taxes without cutting spending just gave us the impression we could get the benefits of spending without paying the piper.

Since the Bush II tax cuts, has anyone proposed spending cuts to bring the budget into balance that commanded a majority of even one party in even one house of Congress? Those cuts are not the sole cause of the current debt crisis, but the ideology of No Tax Increases/Never/No Way made its solution politically impossible.

There was one thing that did work to bring the budget into balance after the Kemp-Roth deficits of the 1980s. It was a plan, Republican in its origins and bipartisan in execution, which linked spending to revenue to taxes.

Senators Phil Gramm, R-Texas, and Warren Rudman, R-N.H., later joined by Ernest Hollings, D-S.C., proposed annual deficit targets and rules tying spending to revenue. Their proposal called for a balanced budget by 1991. They got it through Congress in 1985.

It didn’t quite work out as planned. Politicians used all sorts of gimmicks to get around the deficit caps. Hollings asked for a divorce from the plan because of “infidelity and irreconcilable differences.”

Fortunately, Congress and the executive branch did not give up. President George H.W. Bush committed political suicide when he agreed to tax increases combined with spending cuts, and a modification to the Gramm-Rudman-Hollings rules. But he did the country a great service.

The 1990 pay-as-you-go rules were more successful in bringing deficits down. Perhaps because people could see that their taxes were paying for deficit reduction, other politicians could pass necessary taxes without immediately losing the next election.

By the end of the 1990s, the U.S. budget was in surplus. This happened despite the fact that our political system was supposed to be at a very weak point, with a president beating back impeachment over a sex scandal and Congress extremely divided along partisan lines.

Then, of course, the entire system was allowed to expire, and today we have a debt of over $14 trillion.

We also have a supercommittee, which is tasked with coming up with over a trillion dollars of deficit reduction over 10 years, to go with about that much cut from the deficit this summer. There are some limits on the increase in “discretionary” spending, but huge items such as Medicare, Social Security and defense are excluded. The problem is that the current combination is not nearly enough to reach a balanced budget.

So, here’s what the supercommittee needs to do, in addition to naming its first trillion or so in cuts now: Bring back Gramm-Rudman-Hollings.

Bring back annual goals for actual reductions in the deficits, not just limits on spending increases. Make them enforceable. Broaden the current pay-as-you-go rules, so that increased spending anywhere requires a rise in revenue or cuts elsewhere. Set a date for reaching a balanced budget.

It will be harder this time. Deficits are larger now. We are still recovering from the worst recession since 1938, and austerity today may not be a good idea. Bills for the baby boomers’ Medicare and Social Security are coming due.

It probably can’t be done in five years. This summer’s deal to raise the debt limit accepted that large cuts must wait until the economy is stronger, about 2014 or so. Based on the Gramm-Rudman-Hollings experience, it will take 10 to 15 years to balance the budget. So pick a target year in the next decade. And don’t have the rules expire until well after the balanced budget is reached.

Without a majority in either party for the gigantic spending cuts required to balance the budget by themselves, this approach means tax increases. But small-government advocates should, by now, have learned this lesson: The only way to convince the American people we don’t want big government is to make us pay for it.

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Kenneth S. Gallant is a professor of law at the University of Arkansas at Little Rock’s W.H. Bowen School of Law.