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08 August 2011

Stouffer: The Case for a Balanced Budget

A lot of folks are making a big deal over raising the nation’s debt ceiling once again. What started as a serious round of discussions to actually curb the out-of-control spending in Washington, D.C., may have turned into yet another example of kicking the can down the road.

Part of the initial discussions on Capitol Hill centered around “cut, cap and balance,” a simple idea that sought to cut the total amount of spending, cap the amount of money spent to a particular baseline and balance the federal budget. This was deemed as drastic, extreme and impossible by many — including the president. Why it is okay to raise the debt ceiling, but NOT cut the ridiculously high spending, is beyond me.

A balanced budget amendment is proposed in Congress every few years. The plan normally gets discussed, but does not make it to the people. Balanced federal spending would mean big changes, even at the state budget level, and I wholeheartedly support the cause.

In Missouri, we balance the budget. We have to; it is the law. We do have debt in this state, but it is very low, comparatively speaking. For every dollar that will be spent in Fiscal Year 2012 (which runs July 1, 2011-June 30, 2012), three-tenths of a cent will go to pay off our public debt. Roughly speaking, this translates to approximately $7.6 million of a $23.3 billion budget.

Our ability to balance the budget has also kept our state’s credit rating high. While threats to downgrade the nation’s credit rating continue to be bounced around, Missouri enjoys a AAA rating, which means our interest payments stay low.

There is nothing new about the concept of a federal balanced budget. Thomas Jefferson wrote in 1798 how he wished it could be impossible for a government to borrow money. But, since the country was recovering from the cost of the Revolutionary War, such an amendment was not feasible then. Nothing was proposed until 1936. More calls for a federal balanced budget amendment happened during the 1970s. The latest attempts were in 1995 and ’97, but nothing has occurred since then.

Our governor has also exercised his authority and ordered the withholding of millions of dollars over the past couple of years. Unfortunately, most of the money that has been withheld lately has never been replaced, despite increasing revenues this year. This is especially true of school transportation funding; the state’s promised share of paying for bus service for our schools has been cut drastically this year. The downside of withholding money is it circumvents the Legislature. That having been said, the governor has released $1.2 million for children’s crisis care, domestic abuse victims and the elderly.

When federal lawmakers revisit the debt limit in December, I am hopeful they will finally obey the will of the people and take serious strides to curb the massive spending that takes place in Washington, D.C. Without new discipline, our nation faces unprecedented challenges. I pray that our leaders will do the right thing.

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