Inquirer Editorial: Financial straitjacket

The Republicans in charge of the House are showing how badly out of touch they are with the rest of America. Instead of working on a realistic plan that would allow the government to continue paying its bills, the House wants to put the nation in a fiscal straitjacket.

The measure it approved Tuesday demands deep spending cuts without any new revenues. But in a transparently cynical move, politically sensitive programs such as Social Security, Medicare, and pay and benefits for soldiers and veterans were exempted.

The House deficit-reduction plan would constitutionally lock the nation into this imbalanced fiscal arrangement by also demanding a balanced-budget amendment. That restriction would make it nearly impossible for the federal government to borrow even for legitimate long-term investments such as needed repairs to infrastructure.

Completing the trifecta of nonsense, the House insisted that the amendment make it almost impossible to raise any federal tax in the future. The Constitution allows the nation to go to war, even launch a nuclear attack on another country, with a simple majority vote in Congress. But the House thinks that extracting even another penny in taxes from hedge-fund managers should take a supermajority vote of two-thirds.

That's not what the American people want. They know that it will take a mix of spending cuts and increased revenues - heavy on the spending cuts - to stabilize the nation's finances.

Polls consistently show support for that approach, and it's the kind of deal President Obama has supported. He has sought to close the nation's financial hole by $4 trillion, three-quarters of it by spending cuts. About $1 trillion would come from closing tax loopholes exploited by highly profitable corporations and hedge-fund managers and a slight boost in taxes on the highest income bracket.

House Republicans say they are only asking government to do what families do to balance their budgets. But under its constraints, a family wouldn't be allowed to buy a house until it had saved the entire purchase price. Same for buying a car or paying a college tuition bill. Sorry, no "deficit spending" allowed.

The House plan would lock down federal revenues at a time when they are at historically low levels - 14.4 percent of the nation's economy, compared with 20 percent when the nation was running a surplus under President Bill Clinton. Not since 1966 have federal revenues taken a smaller bite of the national economy.

If there's an analogy to family finances, it's this: After reducing its income, a family was hit by a horrendously expensive crisis that made it unable to pay all the bills. But instead of trying to bring in new income, the Republicans would hock the family furniture, at least the furniture from the rooms in the house where they don't live.

This shortsighted financial plan is not what the nation needs or what Americans support. It's time for the House Republicans to stop pandering to their right-wing base and work on a balanced package that will steer the nation back to financial health. Maybe the Senate can provide that guidance.