On Dec. 14, the Senate voted on S.J. Res. 10, the proposed constitutional amendment requiring a balanced budget sponsored by Sens. Orrin Hatch and Mike Lee of Utah. All 47 Senate Republicans voted for this constitutional amendment. All 53 Democrats voted against it.
Romney took no stand.
Romney did sign a "Cut, Cap and Balance" pledge, vowing to support a balanced budget amendment that would include an unspecified "spending limitation." However, he did not specifically support the Hatch-Lee Amendment that would require balancing the budget while capping federal spending at 18 percent of gross domestic product.
Senate Republicans backed the 18-percent spending cap for a reason: 18 percent approximates the average percentage of GDP the federal government has been able to collect in taxes over many decades.
To balance the budget while capping federal spending at higher than 18 percent of GDP would require raising the persistent rate of federal taxation to an unprecedented level.
"Over the long haul, we have learned that our tax system is capable of generating a revenue stream equaling a little over 18 percent of all of the revenue that moves through the American economy every single year -- a little over 18 percent of our gross domestic product," Lee explained on the Senate floor the day before all his Republican colleagues backed his amendment.
"That percentage remains relatively constant," Lee said. "It has remained that way for many decades, going back to at least 1960. It averages out a little over 18 percent of gross domestic product. That remains true even when we go back 30 years or so when our top marginal income tax rates were approaching 90 percent."
Four days after Senate Republicans voted unanimously for a balanced budget amendment that would cap spending at 18 percent of GDP, Romney told Fox News about his own budget plan.
"Well, my plan is a responsible plan, and I have the specifics that show how I will cut $500 billion out of the federal budget and take federal spending from 25 percent of the GDP down to 20 percent of GDP," Romney told Fox.
"Which is, in my view, closer to the long range average and makes sense," Romney said. "I want to cut federal spending," Romney said. "I want to cap federal spending at 20 percent of the GDP and then lower it from there. And ultimately, I want to have a balanced budget amendment."
"Ultimately" he wants one. What does that mean?
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