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Politicians Forget Why We Need A Strong Balanced Budget Amendment

Posted By Brian Darling On November 1, 2011 @ 1:11 pm In Featured | Comments Disabled

The purpose of a Balanced Budget Amendment to the Constitution (BBA) is to limit the size and scope of the federal government.  Some politicians seem to have forgotten that goal.

According to USA Today [1] there are 18 pending proposed amendments to the Constitution that purport to be balanced budget constitutional mandates.  The House will be voting in two weeks on a “Joint resolution proposing a balanced budget amendment to the Constitution of the United States” and they have yet to settle on specific language.

“The overwhelming majority of the members of the Republican conference want to vote on a balanced-budget amendment that has a chance of passing,” says Rep. Bob Goodlatte, R-Va., who has been leading the effort in the House. That means an amendment without some of the provisions — such as hard limits on federal spending or roadblocks to raising taxes — added on to some proposals, he says.

Rep. Goodlatte seems conflicted, because he has introduced two differing versions of a BBA.  One that has a two-thirds vote to raise taxes and a spending cap at 18% of the economy (H.J. Res. 1 [2]) and another version that has stripped those requirements.  The second version is a weak BBA and a version that may lead to massive tax increases while locking in the current spending of the federal government

Voting on a weak BBA may do more harm than good to the cause.

First of all, voting on a weak version of a BBA may undercut the long term fight to pass a strong version of a BBA.  There is no realistic possibility of any version of a BBA passing the House and Senate by a 2/3rds vote and being sent to the states for ratification.  Passing a weakened version of the BBA without capping the size of government nor prohibiting tax increases would be an example of House Republicans negotiating against themselves.

Conservatives may have a good reason to oppose the weakened version of a BBA.  If a BBA allows revenues to creep up to current levels of spending, then the weakened version of a BBA will, in effect, grease the skids for massive tax hikes on all Americans to balance the budget at President Obama bloated levels of spending.

Curtis Dubay [3] of The Heritage Foundation wrote on March 21, 2011 current spending is at a pace at about 23% of the economy.

Historically, federal spending as a percentage of gross domestic product (GDP) has averaged around 20 percent. Obama’s budget averages almost 23 percent from 2012 through 2021.  Federal tax revenues have averaged about 18 percent of GDP. Although below that mark currently because of the recession, according to the Congressional Budget Office (CBO), federal tax receipts will be above that historical threshold by 2018 if all current tax policies are left in place—including making all 2001 and 2003 tax cuts permanent. If spending were kept to 20 percent of GDP, the deficit would fall below its historical average after 2018 and the national debt would stabilize.

If a weak BBA is passed, politicians or federal judges may use the BBA to claim that they are constitutionally mandated to raise taxes to balance the budget.  There is no language in the weak BBA to prevent federal judges from imposing court ordered tax increases to balance the budget and there is no protection from politicians using tax increases as the means to bring revenues up to high spending levels.

Conservatives, and every single Republican Senator, have rallied to support the identical BBAs sponsored by Sens. Orrin Hatch (R-UT) as S.J. Res 10 [4] and Mitch McConnell (R-KY) as S.J. Res 23 [5].  These are modified version of Sen. Mike Lee’s (R-UT) version introduced in February as S.J. Res. 5 [6].  All of these BBAs contains strong language that restricts the size and scope of the federal government.

As I wrote in a Heritage Foundation backgrounder, The House and Senate Balanced Budget Amendments: Not All Balanced Budget Amendments Are Created Equal [7], dated July 14, 2011 both the House and Senate had settled on language that would make it hard for politicians to raise taxes as a means to balance the budget:

The House and Senate BBAs are designed to make it difficult for Congress to use tax increases as a means to balance the budget. Once amended, the Constitution would contain a provision that would force a supermajority in both chambers to raise taxes on the American people in order to balance the budget, with certain exemptions in one version.

Also, House and Senate versions contain a spending cap on the growth of government at 18% of the output of the economy.  Capping spending by the President and Congress to a specific percentage of economic output would cap the growth of government.  Crafting appropriate language may be difficult, but a spending limit in the constitution seems like the only means to make sure that the federal government does not consume a greater and greater percentage of the economy as the years march on.

The House and Senate versions differ on the constitutional requirements for the content of the President’s budget. Section 3 of the Senate version provides that two conditions must be met by the President’s submission to Congress. First, “total outlays do not exceed total receipts.” This provision is identical to the condition in Section 4 of the House version. Second, the Senate version adds a condition not included in the House version that “outlays do not exceed 18 percent of the gross domestic product of the United States for the calendar year ending before the beginning of such fiscal year.” The Senate version references “gross domestic product,” but the House version is silent on GDP.

Both the tax cap language and spending limit language may need to be tweaked, yet they should not be tossed aside to get a few more votes in the House and Senate.  The bottom line is that it seems to be a strategic mistake for Congress to take votes on weakened versions of a BBA in order to get a few more votes.  Members know that even a weakened version of a BBA has little chance of passing; therefore it makes no sense for conservatives to negotiate against themselves on the language to be inserted into the Constitution for the purposes of limiting the size and scope of the federal government.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2011/11/01/politicians-forget-why-we-need-a-strong-balanced-budget-amendment/

URLs in this post:

[1] USA Today: http://www.usatoday.com/news/washington/story/2011-10-31/balanced-budget-amendment-proposals/51021020/1?csp=34news

[2] H.J. Res. 1: http://thomas.loc.gov/cgi-bin/query/D?c112:2:./temp/~c112zNYk6G::

[3] Curtis Dubay: http://www.heritage.org/research/reports/2011/03/obamas-2012-budget-higher-taxes-slower-growth

[4] S.J. Res 10: http://thomas.loc.gov/cgi-bin/query/z?c112:S.J.RES.10:

[5] S.J. Res 23: http://thomas.loc.gov/cgi-bin/query/z?c112:S.J.RES.23:

[6] S.J. Res. 5: http://thomas.loc.gov/cgi-bin/query/z?c112:S.J.RES.5:

[7] The House and Senate Balanced Budget Amendments: Not All Balanced Budget Amendments Are Created Equal: http://www.heritage.org/Research/Reports/2011/07/The-House-and-Senate-Balanced-Budget-Amendments-Not-All-Balanced-Budget-Amendments-Are-Created-Equal

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