The Balanced Budget Debate Begins

Senator Mike Lee (R-UT) has offered a Sense of the Senate Amendment to the Patent Reform Act of 2011 (S.23) testing the waters on the idea of a balanced budget amendment to the Constitution (Senate Amendment 115). This will be a referendum to testing the waters for the idea of a balanced budget amendment in the Senate.  The details of any mechanism to cut spending is very important and should be studied in great detail.

There are two very important priorities for any process changes.  First, conservatives need to make sure that any process changes do not favor of increasing taxes and protect entitlement programs from change.  Second, conservatives need to make sure that this debate does not crowd out the immediate need to cut spending.  The last thing we want is a protracted battle over a balanced budget amendment that gives politicians an excuse to ignore the immediate cuts to the budget that need to happen yesterday. The Lee Amendment states the following:

It is the sense of the Senate that Congress should pass and the States should agree to an amendment to the Constitution requiring a Federal balanced budget.

Senator Lee told the Salt Lake Tribune, “There are a lot of us who are concerned that as we are approaching a potential government shutdown—that Democrats have been threatening—that we need to have some discussion this week that we need a structural control mechanism.” This vote, if it happens later this week, will be the first scuffle in the fight for either a balanced budget amendment or a statutory mechanism to cut federal spending. The legislation to increase the debt limit may become the vehicle for a comprehensive debate on spending cut ideas.

Senator Lee has his own version of the balanced budget amendment as contained in S. J. Res. 5. The Lee version has some provisions that depart from the commonly understood Contract with America version. Section 2 of the Lee Constitutional Amendment would provide a spending cap of 18 percent: “Total outlays shall not exceed 18 percent of the gross domestic product of the United States for the calendar year ending prior to the beginning of such fiscal year.” This would add a spending cap so that the budget could not be balanced at a higher level of spending than traditionally maintained over the history of the United States.  The problem is that the enacting legislation would have to address who becomes the arbiter of what is “gross domestic product” for purposes of measuring compliance with the constitutional mandate.

This amendment to the Constitution would provide for supermajority votes to breach different provisions. Legislation would be subject to a two-thirds vote if it caused total outlays to exceed total receipts for that fiscal year; caused total outlays to exceed 18 percent of the GDP of the United States; created a new tax (or increased taxes); or effected an increase in the debt limit.

There is another interesting provision that would prevent a “court of the United States or of any State” from ordering “any increase in revenue to enforce this article.” This would prevent a court-ordered tax increase to balance the budget.

It is important to emphasize that is the start of the debate, and that there are various versions of the balanced budget amendment and other options that do not include changing the Constitution.  Also, some conservatives have trepidation about the restriction on the judiciary and whether it goes far enough to keep the courts from running the budget.  It is not just that the Courts will require tax increases but that they would require certain spending as constitutional rights outside of the balanced budget.  The Court’s involvement in the process could get very messy. The Lee amendment contains language restricting the power of the courts, but it needs to be stronger.

This needs more debate, hearings and consideration. There will be many great ideas—both constitutional changes and new statutory mechanisms—proposed to rein in out-of-control government spending. Senator Lee has his own approach, and he has chosen to start the debate early. Expect debate on Senator Lee’s proposal and other proposals over the next two months as Congress wrestles with spending bills and an increase in the debt limit.