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Balanced Budget Amendment

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The federal government has consistently run deficits—with the exception of a few years in the late 1990s. Some say that the only way to solve the budget problem we face is to amend the United States Constitution to require the government to balance its budget. After all, 49 of the nation’s 50 states require enactment of a balanced budget. If it’s good enough for the nation’s governors and state legislatures, why is it not good enough for the federal government? The battle has raged for decades and with Republicans gaining control of the House of Representatives, it will come to the forefront again. The Balanced Budget Amendment is a popular campaign slogan, particularly for conservatives. The concept sounds simple, but it’s not.

The closest Congress came to actually taking the first steps toward adopting the amendment was in 1995. That year, Republicans took control of both Houses of Congress and promised to consider the balanced budget amendment. House Republican candidates had included the balanced budget amendment as part of their “Contract with America” legislative agenda. The House passed the amendment, 300-132, gaining the necessary two-thirds majority. However, the Senate, in a dramatic vote, fell just short of the two-thirds needed, 65-35. The Senate also fell short of the votes during the next Congress.

What is the Balanced Budget Amendment?

Most years, the federal government spends more money than it takes in through taxes. That’s why there is a budget deficit. The government borrows the additional money it needs. That’s why there is a federal debt.

The balanced budget amendment would prohibit the federal government from spending more than it takes in each year, unless Congress specifically authorizes the additional spending through a three-fifths or two-thirds vote. It would require the President to submit a balanced budget each year. And it would allow Congress to waive the balanced budget requirement when there is a declaration of war.

Amending the Constitution is more complicated than simply passing a law. Passing an amendment to the Constitution requires a two-thirds vote in each House. It is not submitted to the President for his signature. Instead, three-fourths of the state legislatures must approve it to be added to the Constitution. The only other way to amend the Constitution is to convene a Constitutional Convention at the request of two-thirds of the states. The convention method has never been used to amend the Constitution.

Arguments for the Balanced Budget Amendment

Advocates of a balanced budget amendment say that the federal government spends too much every year. They say that Congress has been unable to control spending without some kind of restraint and that if spending is not controlled, our economy will suffer and our standard of living will drop. The federal government will continue to borrow until investors no longer will purchase bonds. The federal government will default and our economy will collapse.

If Congress is required to balance the budget, it would figure out what programs are wasteful and would spend money more wisely. Currently, there is no incentive or requirement for Congress to make wise spending decisions.

Arguments Against a Balanced Budget Amendment

Those opposed to a constitutional amendment say that it is too simplistic. Even with the amendment, balancing the budget will have to be done each year by legislation. This will require Congress to coordinate a large number of pieces of legislation – twelve appropriation bills, tax legislation, and any supplemental appropriations to name just a few of them. To balance the budget right now, Congress would have to eliminate many programs.

In addition, when there is an economic downturn, the amount of taxes the federal government takes in usually drops. Spending often must be increased during those times or the economy can get worse. Under the balanced budget amendment, Congress would be unable to increase the needed spending. This is not a problem for states because they don’t control fiscal policy, but Congress needs the ability to stimulate the economy.

Outlook

Amending the Constitution is a rare and daunting task. It takes a great deal of time to adopt an amendment. The House may pass the constitutional amendment, but the outlook is much more uncertain in the Senate and if it passes there it still needs to be ratified by three-fourths of the states. Due to the timeline involved, the nation is likely to face a large fiscal crisis before the cumbersome process of adding the amendment is completed.

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