- Cullman, Alabama


December 13, 2012

COMMENTARY: Raising federal revenue the Libertarian way

Reality-check time. By returning the same political alignment to Washington in the last election, the American people in effect decided that solving the country's budget problems will involve increasing revenue.

As Republicans in Congress negotiate with the White House to forge a long-term budget deal, we would like to suggest a bargain that will allow for more revenue while also ensuring that the new money actually — for once — goes toward deficit reduction.

In our perfect world, the budget would be balanced by drastically cutting excessive spending. That looks unlikely in this political atmosphere. But a major reason to oppose new federal revenue is the government's well-established history of spending any money it can get its hands on now, and then borrowing or printing more when it runs out, leaving the bill to future generations.

That's why any agreement that adds revenue should include some kind of restraint on spending.

Of course, such restraints haven't had much success in the past. The line-item veto was declared unconstitutional in 1998. Sequestrations enacted by statute have proved malleable and thus ineffective. A balanced-budget amendment wouldn't be politically achievable, and whether it would be good policy remains heavily contested in academic circles.

There is an alternative plan that could restrain spending and be palatable to both Democrats and Republicans: a "Pay As You Go" constitutional amendment.

A Pay As You Go (or PAYGO) mechanism is intended to prevent Congress from passing legislation that isn't paid for. It requires that any revenue increases coming from tax reform or as part of a congressionally approved budget would have to go toward deficit and debt reduction — and couldn't be spent on future legislative projects. A PAYGO amendment wouldn't address the need to drastically reduce spending, but it would at least ensure deficit-reducing measures do what they're intended to do while providing a restraint on future spending.

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