Buffett Plan Would Balance the Budget… But Wouldn’t Reform Congress
There’s a spam email zipping around the internet that purports to be a congressional reform plan from Warren Buffett.
The problem is, the email – like so many internet missives – is full of misleading half-truths. So I wanted to set the record straight and give you a plan that would actually work to reform our broken system.
In actuality, the Buffett Plan would reform congressional budgeting – not Congress itself. He explained it during an interview on CNBC in 2011.
The outline of his proposal is relatively simple. Here’s what Buffett said: “I could end the deficit in five minutes. You just pass a law that says that any time there’s a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election. Yeah, yeah, now you’ve got the incentives in the right place, right? (Laughs).”
Buffett understands that working with politicians is all about incentives, and today all the incentives are wrong. Buffett understands that what motivates members of Congress is re-election. If you want to balance the budget, just tie successful budgeting to re-election.
An Insider at Heart
Most Americans don’t remember him, but Warren Buffett’s father was a Republican congressman from Omaha. So when Buffett talks about Congress, he has an insider’s view of how the institution really works. And his budget reform plan creates the incentives necessary to make the institution work.
The incentives for members of Congress are currently upside-down. To get re-elected, congressmen spend nearly half their time raising money. To raise money, they spend hours making calls and attending events with the special interest representatives who grease the campaigns wheels with money.
As a result, legislation is full of crony capitalism and special interest goodies.
But with the Buffett plan, we’d get the deficit under control and likely balance the budget. And to further reform Congress, I believe we should make a few additional changes to the business of influence peddling, also known as lobbying. You see, the most popular gig for former members of Congress is to become a lobbyist.
My first reform would be to close this revolving door by instituting a lifetime ban that keeps members of Congress from becoming lobbyists.
After former member lobbyists, the next group to join the profession in droves is congressional staff. I would also ban former staff members from lobbying their former bosses. Currently, this is one of the dirtiest secrets in Washington. You see, lobbying firms target specific congressmen. And the firms love to hire the former staff assistants of their target congressmen, giving the firm direct access to the people they’re trying to influence.
If you work for Senator X or Congressman Y, you shouldn’t be allowed to come back to your old boss and lobby him or her.
To make this ban work, we’d need to require “Lobbying Entities” to report on the former members of Congress and former congressional staff whom they employ. And that could be done with a simple website.
It All Comes Full Circle
Next, we should stiffen fines for violating the lobbying regulations. Violations should be very costly so that they happen infrequently. I’d enhance the maximum fine for violating regulations to $100,000 or more.
Normally, I don’t like regulation. But in this case, we need to have clear regulations that impact the people who are standing in the corridors of Congress with their hands out.
The problem with so-called “campaign finance reform” is that the Supreme Court has ruled that rich people can spend as much of their own money getting elected as they want. So if you make it difficult for poorer people to raise money, we’ll end up with a House of Lords — which is what the founding fathers wanted to prevent.
The only effective reforms require disclosure, and they go to the heart of the rot. In this instance, the rot is special interests that are manipulating legislation for personal, private and corporate gain. My plan, by contrast, would strike a blow for clean government.
Your eyes on the Hill,