Credit portal




What is a balanced budget amendment

James Ledbetter

Three reasons conservatives should oppose a balanced budget amendment

By James Ledbetter

The opinions expressed are his own.

One of the crucial lubricants allowing Congress to resolve the debt-ceiling friction was, apparently, the inclusion of a provision to vote on a balanced-budget amendment. Assuming this version of the deal passes, then at some time between September 30 and December 31 of this year, both houses of Congress will be required to vote on a  ‘‘joint resolution proposing a balanced budget amendment to the Constitution of the United States.’’

Whatever the political expediency of this provision may be, a balanced budget amendment is a bad idea from a conservative point of view, for at least three reasons.

It won’t work. Historically, conservatives have opposed extending government authority in places where it is not effective. You can find all the evidence you need to conclude that balanced budget requirements are useless by simply investigating the oft-repeated claim that 49 states have laws requiring a balanced budget. Leave aside the falsity of the claim and just consider the logic: if so many states are required to balance their budgets, why are so many states in the red?

The answer is that requiring state governments to annually balance their books simply encourages them to find clever ways to disguise debt and deficits. For example: California has both a Constitutional and a statutory requirement that its budgets be balanced. Would any sane person maintain that the state’s books have been anything resembling healthy for at least a decade? This year, after some brutal spending cuts, the governor’s office found that the state still had a short-term deficit of more than $9 billion and $35 billion in long-term debt. The governor’s budget report noted that California’s “massive budget deficits for most of the past decade…have been largely the result of a reliance on one-time solutions, borrowing, accounting maneuvers, and cuts or revenues that were illusory and therefore did not materialize.”

If that sounds familiar, it may be because, as Richard Quest pointed out on CNN Sunday evening, we’ve witnessed numerous Congressional attempts in recent decades to rein in federal deficits—including Gramm-Rudman in 1985 and the Budget Enforcement Act of 1990 —all of which fell victim to legislative legerdemain. Why would a federal balanced budget amendment be any different?

It won’t pass, because it’s bad for the states. In recent weeks, many Republicans have behaved as if a balanced-budget amendment is some kind of magic wand that need only be proposed in order to achieve its desired effect. And that might be true, if the desired effect is a vote that can then be used for demagogic purposes.

But in terms of becoming binding law, I’d sooner bet on the Baltimore Orioles winning the World Series this year than on a balanced budget amendment being tacked onto the Constitution before, say, 2015 at the earliest. Constitutional amendments are, by design, difficult to achieve, requiring the

approval of two-thirds of the Congress and three-fourths of the state legislatures. The most recent amendment, which bans any sitting Congress from raising its own salary, was ratified in 1992, a mere 203 years after it was first officially proposed.

The fact—which one assumes House GOP members realize—is that states don’t want a federal balanced budget amendment. As my colleague Gregg Easterbrook notes. some 40 percent of all state spending is based on money states get from the federal government. Any genuine cuts in federal spending would cut off that spigot, and the states would have to fund themselves; moreover, as a group of Nobel-winning economists noted last month, a cash-strapped federal government would be even more likely to created unfunded mandates for the states to pick up spending that feds could no longer afford.

It’s a misuse of the Constitution. Of the 27 amendments to the Constitution, almost none have dealt with fiscal or even economic issues. Since the initial Bill of Rights, constitutional amendments mostly fall into two categories: definitive statements of change in American society (abolishing slavery, lowering the voting age), and procedural shifts in the legislative and executive branches (presidential term limits, electing Senators by popular vote).

It should be obvious why other, more temporally-tied types of amendments risk mischief. Any amendment that cannot be practically enforced is the constitutional equivalent of graffiti (think of Prohibition). And even the biggest fans of balanced budget amendments acknowledge that enforcement is highly difficult: are we going to send officials to jail if the government overspends? If so, who will take the rap?

That might sound absurd, but in fact the 26 th amendment of Alabama’s constitution says that “any person” who allows the state to go into the red will be subject to impeachment, plus a fine of up to $5000 or up to two years in jail. (UPDATE: The office of Alabama’s current treasurer, Young Boozer, tells me that they do not know of any case in more than a century of someone being punished for such fiscal transgressions.) It seems highly unlikely that Congress and three-fourths of the states are going to agree to anything this stringent. With no explicit enforcement provisions, the result, as retired conservative judge Robert Bork has been saying for decades, would be a litigation orgy. In the event of the government overspending under a balanced-budget amendment, Bork predicted the launch of “hundreds, if not thousands, of lawsuits around the country, many of them on inconsistent theories and providing inconsistent results. By the time the Supreme Court straightened the whole matter out, the budget in question would be at least four years out of date and lawsuits involving the next three fiscal years would be slowly climbing toward the Supreme Court.”

Conservatives true to the hailed icons of Edmund Burke and Friedrich Hayek would run screaming from such a cascade of unintended consequences. For better or worse, that does not describe today’s Republican party.

Category: Forex

Similar articles: