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  • Morning Bell: The Truth About the Balanced Budget Amendment

    In case you’re not keeping track, it has been nearly 1,000 days since the United States Senate passed a budget. Meanwhile, America’s fiscal nightmare keeps growing, and those on the left—including Members of the Senate—keep advocating for even more spending despite America’s $15 trillion national debt. That’s an important record to keep in mind as the Senate votes today on two versions of the Balanced Budget Amendment (BBA).

    A BBA is constructive, but it’s not the final answer to America’s fiscal woes despite the tools it offers—in large part because it fails to tackle entitlement reform, the most detrimental driver of spending in this country. A BBA is not a neatly packed solution, as no constitutional amendment can replace the hard work of true spending reforms.

    However, Republicans ensured earlier this year that the 2011 Budget Control Act required a vote on a BBA. Their commitment to ending big government’s reckless behavior was well-meaning but flawed, and a BBA has already failed in the House.

    The proposed amendment being debated in the Senate was chosen from several previous versions and is sponsored by Senators Orrin Hatch (R–UT), Mike Lee (R–UT), and John Cornyn (R–TX), among others. It is stricter and it fundamentally differs from its counterpart in the House, but it still lacks in several areas.

    Cornyn spoke at The Heritage Foundation last month about the BBA, saying that the American people are “justifiably very skeptical of Washington” right now. “I think we need to prove to them that we are serious about solving the problem, not that we are just going through the motions,” Cornyn said. “I think [a BBA] is called for under the circumstances we are in.”

    The proposed amendment addresses many key issues requiring disciplinary action on the $15 trillion federal debt. These include a spending cap of 18 percent of GDP, a three-fifths vote to raise the debt ceiling, and a two-thirds votes to raise taxes—all helpful actions to getting America back on the right path. It also requires that the President submit a balanced budget to Congress every year.

    While the details of this proposal are an improvement to some of the previous, weaker BBA proposals, it still doesn’t solve America’s spending problem.

    The Heritage Foundation has supported and covered extensively our ideas for a balanced budget in the Saving the American Dream plan. A major component of that plan would be to undertake entitlement reform by amending existing federal laws that provide permanent or indefinite appropriations to federal agencies or programs. This BBA does not provide this kind of essential direction for long-term budget maintenance.

    As Heritage’s David Addington has noted, an appropriate BBA should be intentionally focused on driving down spending, taxation, and borrowing. Such focus is especially important right now because of the massive federal debt and these yet-to-be reformed entitlement programs.

    Even more importantly, a supermajority must be able to temporarily waive a BBA if it is crucial to national security, as such is the first constitutional priority of the federal government.

    The Lee version of the BBA permits only a partial waiver when the U.S. is engaged in a congressionally authorized “military conflict”—and the particulars can get sticky. The flexibility for national security is essential if a BBA is to be amended to the Constitution.

    An acceptable BBA should also provide its own enforcement and prevent government from borrowing money to meet the balance requirement. Any loopholes that contradict the BBA’s overall purpose will serve only to push America further from fiscal prosperity.

    As Heritage’s Matt Spalding explained just before the failed House vote last month, Congress should be taking every opportunity it has to first and foremost cut and cap federal spending:

    A part of the long-term agenda to rein in government is an appropriate and sound amendment to the Constitution that would keep federal spending under control in subsequent years. Indeed, the principal reason for adopting a balanced budget constitutional amendment is to limit the size and scope of the federal government by limiting its spending.

    Despite its weaknesses, the BBA retains worthy components, making it harder to raise taxes by requiring a two-thirds super-majority of both houses.

    As Hatch said in conference call with bloggers on Monday, the BBA “will finally put a straightjacket on Washington’s ability to continue profligate spending of the American people’s money.”

    He said that the failure of the congressional super committee to reach an agreement to cut between $1.2 and $1.6 trillion from the federal debt over the next 10 years demonstrated a need for a BBA.

    But it’s important to be cautious when approaching what some have deemed the answer to America’s fiscal disaster.

    In his post, Spalding highlighted the complications in passing a BBA:

    While considerable work has been done to develop a robust amendment, questions of amendment language (both in terms of operational construction and enforcement) have not yet sufficiently been resolved to meet the high and deliberative standard of the United States Constitution.

    Like the House version, the Senate BBA is not expected to pass today, which will leave more quality time for consideration of what is best for renewing America’s course to fiscal repair.

    Amending the Constitution requires that the American people have sufficient time to converse and comprehend the implications such a change would bring. The Senate should consider carefully today all the factors involved now and in the future for a BBA.

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    33 Responses to Morning Bell: The Truth About the Balanced Budget Amendment

    1. Natalie says:

      That is a good second step. STEP ONE: AUDIT THE FED!! Do what Iceland did and tell them wethe American people will not pay back money we loaned them to cover their stupid mistakes then reinstate Glass-Steagall! "If you don't know where you're going, you'll end up someplace else." But if you do not first know where you are in the beginning, you will be eternally lost.

    2. Clearhead says:

      While most of us heartily agree to the need for a "BBA", as a partial solution to our Country's fiscal problem, we are also aware that this is not 100% of that problem. A contributing factor is the impartiality of the present 'administration' in that they can ignore new amendments to our Constitution as efficiently as they demonstrably ignore the already established ones, (and the core issues of the Constitution as well). Therefore there are two opposing elements in the solution to our problem: (1) The people — represented by our Constitution, and (2) the 'government' — represented by the present 'administration'. We would be well advised in large part to eliminate the latter.

    3. Yumadlh says:

      WRITE ONE !!!!

    4. Robert A Hirschmann says:

      Elect RON PAUL. He has a plan that will wok.

    5. Charles W. Harper says:

      Who in the Obama-Biden administration for the 2 AM call about the lost stelth drone we "gave" to a sworn enemey of this country and just thought it was most political correct to do NOTHING and give away billions in research. Now Iran can deliver a stelth nucular weapon !!!!! Chuck Harper in Kansas

    6. FlaJim says:

      There should be a cluase inserted in any proposed BBA that would require zero based budgeting. Every department and agency of government needs to justify what it's spending from dollar one. We're still subsidizing industries and funding agencies that have long outlived their usefulness — assuming there was any need for them in the first places.

    7. Evelyn Levine says:

      These are just games that are being played. Why not pass a balanced budget bill every time a new president is going into office and let that be that. It would never be financially allowed to amend the constitution. But for each presidential cycle it would work.

    8. steve h says:

      Both versions are horrible, which is why neither the House not Senate were able to pass any BBA over these last few weeks. Nearly every single leading economist state a BBA is terrible policy. Bruce Barlett called them a 'pos written by some intern'. Macroeconomic Advisers showed if the BBA was in place now, we'd be at 18% unemployment and the economy would have contracted 17% instead of growing 2%. Yet somehow, the conservatives who supposedly cherish the constitution, wanted to add a budget policy amendment to it? Instead of making the tough choices themselves, they just want to pass something for future congresses to deal with.

      And a cap on spending at 18% – that is insane. Reagan averaged spending at 22%, and that was before 9/11, before the baby boomers started to retire, health costs were far lower, and somehow, they want to go to 18%.

      However, Erika, i commend you on not using the family/state analogy so many conservatives use – and they all know the analogy is false – so kudos to you for not goign down that road.

    9. AD-RtR/OS! says:

      Of course it won't pass.
      Not only does it not really address the problem, but "the World's Greatest Deliberative Body" has become completely disfunctional, and couldn't pass a resolution on whether their should be chocolate, or banana-nut, cupcakes served with coffee.

    10. Dave says:

      Good article but I take issue with the statement "no constitutional amendment can replace the hard work of true spending reforms".

      How about this for a 28th or 29th amendment?

      Congress shall pass no laws establishing a belief that one is deserving of or entitled to certain privileges or rights to benefits. Nor shall they establish programs providing benefits to members of a specified group; or funding or supporting such a program at any time.

      I am sure it can be improved on but it's a good start!

    11. Susan says:

      I find it interesting that cutting back on "entitlements" is the first step in cutting back spending these days. The amount of money given to other countries and the UN as well has not even slowed down. We are giving or pledging money to other countries for drilling programs, auto manufacturing, revolution, etc.while our own citizens are homeless, jobless or just plain struggling. We need jobs and much will take care of itself. All areas of government(even whole departments )need to be leaned for efficiency or eliminated completely. We also need to rein in these useless and dangerous unions and take some power away from our dangerous president/dictator.My biggest fear on entitlement cut backs is that they will be done with little thought or analysis and hurriedly like the so called health care bill.

    12. Lawrence Ekdahl says:

      Eye wash! To many loopholes. The most important being no tax increases to balance the budjet except in times of "declared war".

    13. Robert, TX says:

      The BBA being pushed by the RINO's in the Senate is a disaster. It does NOTHING to address federal mandates to the states – which they have been ramming down the states' throats since the 1960's. Those that want a convention to amend the Constitution will think they are getting a BBA, and will get national popular vote shoved down their esophagus! There are NO light switch ideas – just hard work.

    14. Ray Hinkle says:

      This is of course not going to pass or be promoted by this President. It is possible that it could pass in the State Houses (due to the majority being held by Republicans) if it passed the congress, but not likely. I think that we are paddling up a waterfall on this issue. If congress cannot pass a budget, then why would they pass a balanced budget amendment. I think that the Democrats view the constitution as an impediment to achieving their vision of the world and will try to circumvent it in "any" and "every" way that they can. Certainly it would be obvious and logical to most constitution loving citizens. Everyone has a budget. So, Why do the democrats not want to pass a budget? This is the question that Americans should be asking.

    15. S. hartzler says:

      The biggest hurdle to cutting spending by Congress is "baseline budgeting." A balanced budget approach is all well and good IF the budgeting process is "zero based." Automatic increases in the budget process are killing us! The cuts we do hear about are cuts to the percentage of the automatic increase. Give us a break!

    16. Lindbergh Hodges says:

      According to the Democrats, Bush put our Economy in the ditch. If that is true, then Obama is driving us off a CLIFF!!!! At least you can get out of a ditch, but when you go off a cliff there is no hope! Even the government can not spend like drunken sailors (forget me Navy) forever.

    17. PADDY O says:

      WITHOUT A BALANCED BUDGET THERE IS NO LIMIT ON SPENDING.
      WITHOUT A LIMIT ON SPENDING THE PRINCIPLE ON THE DEBT IS NOT GOING TO BE REDUCED.
      WITHOUT A REDUCTION IN THE PRINCIPLE AN INCREASE IN INTEREST OWED IS AUTOMATIC.
      WHAT POLITICIANS CALL "DEBT REDUCTION" IS A FARCE.
      ANYONE WITH A MORTGAGE SHOULD UNDERSTAND THIS!

    18. Leon Lundquist says:

      I think our Domestic Enemy has an evil intention to refuse to do its duty, it is their vested interest to prove that the United States Government does not work. Obama has that plan to 'fundamentally transform' America despite the fact it would be Treason to do so, our Constitution provides for Representational Democracy with our checks and balances. You cannot lawfully 'transform' America! Who made Obama king? You are so right, the last few years of the Senate's derelection of duty in not providing a budget has made this crazy spending possible. It is Treason, if Representing a Domestic Enemy you do not do your sacred duty under the Constitution. So Obama doesn't lead, there is a Crime in that when he is sworn to do so.

    19. Gregory Norton says:

      If spending were limited to the previous year's revenues much of the complexity, and opportunities for shenanigans, would be eliminated. Perhaps last year's revenues plus any accumulated surplus; since we are $15 trillion away from having any accumulated surplus, spending would have a hard limit, known in advance. No projections, no "oops", no percentage of a guessed-at future GDP. Tax increase? If it actually increases revenues, the next year there will be more to spend. If, as usually happens, tax increases reduce revenue, well… Percentage of GDP will hit its natural level – 16% to 20% of GDP.

      Over-rides by 2/3 of each house and signature by the president would be sufficient: if you can't get 2/3 of both the House and Senate, it isn't a national emergency. War? If it isn't a national emergency then no over ride. No need for the amendment to even mention war.

      Oh, and limit the over-ride authorization to the fiscal year during which the vote is taken. None of this "automatic over-ride" nonsense or voting on over-riding the limit 10 years hence. Congress will do this, if permitted.

      Simple formula: what was last year's revenue – that's the most you can spend. If last year's revenue can't be determined in time, make it the revenue from two years ago. If you spend all that is allowed before the end of the year, government stops. The President is sent home, along with all of Congress. Put some teeth in it: if the spending limit is met before the end of the year (as determined by something other than the Congress, which will stop the clock – as they have done in the past) remove all of Congress and the President, making them ineligible for federal employment of any kind – elected or appointed.

      Entitlement reform would take care of itself: if they don't reform entitlements, Congress won't have any money to spend on the goodies that get them re-elected.

      All the other stuff is just window-dressing. Congress could "balance the budget" next year – on paper – just by inserting phony revenue projections.

    20. RennyG says:

      First, isn't it an impeachable offence to not have a budget??? Impeach them all!!!!!!!
      Second, it will be 50 years before a BBA is passed. If we can't get a budget now, how can we ever expect to get a BBA????? How can you ever accomplish anything when one side is operating under the "Alinsky" theory and the other is operating under "peoples" theory. PRAY!!!!

    21. RennyG says:

      Another comment, we need "managers/accounting" people watching over our tax dollars!!!!!!!
      !!!!!!!!!!

    22. James V. Burnette says:

      We are recording a movie and after finishing it we find that many of the sceens were wrong and need a lot of editing. In order to edit the film we must reverse it to get to the parts that need to be corrected. Until we reverse the camera on our financial direction and find out where we made mistakes we will never get the film to have a happy ending. The financial clock we see shown on TV all the time rolling up the numbers toward higher and higher debt will never be stopped until we "reverse the camera" and edit out our mistakes. We will not see success until we see the numbers on that clock going down, not up.

    23. toledofan says:

      As long as the democrats control the White House, the Senate and the mainstream media nothing is going to change. What is so had to comprehend is why there are so many who blame the Republicans and it seems like there is little or no outrage towards the Democrats. I mean look at the numbers, for the little Obama has done, why would 40 plus percent think he doing a good job? Why would anyone give this man or his party another four years to do more of the same.

    24. Bill Witter says:

      I feel that a BBA is really a necessity, but I am sick and tired of everyone calling Social Security and Medicare "Entitlements". These programs are a bought and paid for contract with Americans. In fact, Medicare is still being paid for to the tune of $99.90 per month, deducted each month from SS checks.
      Sosial Security was paid for by me and my employers since 1955. Had that money been put into a trust or mutual fund, there would be more than enough to pay me for the rest of my life. It is not my fault that the fund has been raided to pay for other uses, and not replaced.
      The problem is uncontrolled spending and giving money to people who hate us, so that they won't hate us as badly. That has really worked well!

    25. Peter Konetchy says:

      I definitely agree with the concept of Cut, Cap, and Balance, in that I understand that we must Cut and Cap spending and definitely Balance the budget, but I cannot support the Balanced Budget Amendment (BBA) for the following 4 reasons.

      1st) The constitution is ignored by every branch of government whenever its limitations are found inconvenient. Why should we add another constitutional provision when the current provisions are ignored? For example, there is no constitutional authority to spend money on any power not enumerated in the constitution. (Article 1 Section 8 clearly authorizes Congress "To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States". Article 1 Section 9 then clearly states that: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law;" Therefore, money may be drawn from the treasury only in the performance of specific constitutionally enumerated powers. )

      If this provision of the constitution were upheld we would not need this amendment. There could be no federal spending, influence, or control or items such as health and human services, housing and urban development, education, energy, labor, the EPA, or any other function not constitutionally authorized. All these functions would be handled much more efficiently by the people, free market, or the States.

      2nd) The BBA caps federal spending at 18 – 20% of GDP. It is a little known fact that for the great majority of our nation’s life federal spending averaged only 2-3% of GDP – (from 1787 through 1930).

      Historical Federal Spending as a Percent of GDP (1787 – 2010)

      We had no need for an income tax and no debt. Only when the federal government ignored its constitutional limitations, and started to insert its control into every aspect of society after 1930, did the country encounter economic ruin. Federal spending now tops 25% of GDP. My goal is to fight to limit government to its constitutional duties and once again limit federal spending to its proven historical average of less than 5% of GDP- about 75% less than the BBA limit. At this level we could once again raise federal revenue as our founders proposed and eliminate direct federal, taxes against the individuals. The BBA will legitimize spending close to its historical high. I cannot accept this level. If passed, this amendment would then set precedent granting congress authority to spend well outside of all other constitutional provisions.

      3rd) This amendment is based on the incompetence of elected representatives. You can’t legislate competence any more than you can legislate morality. For example: how can we guarantee that the defense budget won't be gutted if incompetent, self serving politicians need money for their pet social projects? It opens up the possibility of unlimited unintended consequences.

      4th) We don't need an amendment to balance the budget. It will take 2/3rds of both houses and 3/4 of the states to pass a BBA – requiring a very lengthy time. Are we going to deficit spend until the amendment is passed? If we have overwhelming support for this amendment, why don't we use a simple majority (51% of congress) to simply adopt a balanced budget without the BBA? If the president vetoes the balanced budget, congress can override the veto with the same majority needed to pass the BBA. We can do this immediately without wait.

      I think that some amendments to the constitution are extremely destructive – such as the 17th amendment. I do not want to adopt another which could have disastrous consequences for future generations. The only solution to the countries social and economic problems is to restore constitutional restraint, educate ourselves about those who are abusing our trust, and vote self serving politicians out of office. https://www.facebook.com/note.php?note_id=1597269

      Peter Konetchy for Senate in Michigan – 2012

      • steve h says:

        Really Peter – you want less than 5% of GDP for federal spending? You think we should point to the late 1700 hundreds as a guide to government spending? Should we also go back to allowing slavery – that will surely keep costs down. That's an absurd argument – what was life expectancy back there – around 25 or 30 years old? How mnay times did Al Queda attack the US in the late 1700s? How much did we spend on military or national defense? Holy crickets – I think you may be on the only person voting for you next year.

        Basically, you think we should get rid of the military, get rid of all infrastructure and go back to the old dirt road method, get rid of any advanced technology in science and medicine…you basically want to go back to the dark ages. What a wonderful vision you bring. I love how you want to make the US below a 3rd world country…where sub-sahara African countries point and laugh at us.

        I love how you have a photo of a bridge on your website – because we'll never see another one at 2-3% spending.

    26. Peter Konetchy says:

      I definitely agree with the concept of Cut, Cap, and Balance, in that I understand that we must Cut and Cap spending and definitely Balance the budget, but I cannot support the Balanced Budget Amendment (BBA) for the following 4 reasons.

      1st) The constitution is ignored by every branch of government whenever its limitations are found inconvenient. Why should we add another constitutional provision when the current provisions are ignored? For example, there is no constitutional authority to spend money on any power not enumerated in the constitution. (Article 1 Section 8 clearly authorizes Congress "To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States". Article 1 Section 9 then clearly states that: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law;" Therefore, money may be drawn from the treasury only in the performance of specific constitutionally enumerated powers.)

      If this provision of the constitution were upheld we would not need this amendment. There could be no federal spending, influence, or control or items such as health and human services, housing and urban development, education, energy, labor, the EPA, or any other function not constitutionally authorized. All these functions would be handled much more efficiently by the people, free market, or the States.

      2nd) The BBA caps federal spending at 18 – 20% of GDP. It is a little known fact that for the great majority of our nation’s life federal spending averaged only 2-3% of GDP – (from 1787 through 1930).
      http://www.peterkonetchy.com/?page_id=400
      We had no need for an income tax and no debt. Only when the federal government ignored its constitutional limitations, and started to insert its control into every aspect of society after 1930, did the country encounter economic ruin. Federal spending now tops 25% of GDP. My goal is to fight to limit government to its constitutional duties and once again limit federal spending to its proven historical average of less than 5% of GDP- about 75% less than the BBA limit. At this level we could once again raise federal revenue as our founders proposed and eliminate direct federal, taxes against the individuals. The BBA will legitimize spending close to its historical high. I cannot accept this level. If passed, this amendment would then set precedent granting congress authority to spend well outside of all other constitutional provisions.

      3rd) This amendment is based on the incompetence of elected representatives. You can’t legislate competence any more than you can legislate morality. For example: how can we guarantee that the defense budget won't be gutted if incompetent, self serving politicians need money for their pet social projects? It opens up the possibility of unlimited unintended consequences.

      4th) We don't need an amendment to balance the budget. It will take 2/3rds of both houses and 3/4 of the states to pass a BBA – requiring a very lengthy time. Are we going to deficit spend until the amendment is passed? If we have overwhelming support for this amendment, why don't we use a simple majority (51% of congress) to simply adopt a balanced budget without the BBA? If the president vetoes the balanced budget, congress can override the veto with the same majority needed to pass the BBA. We can do this immediately without wait.

      I think that some amendments to the constitution are extremely destructive – such as the 17th amendment. I do not want to adopt another which could have disastrous consequences for future generations. The only solution to the countries social and economic problems is to restore constitutional restraint, educate ourselves about those who are abusing our trust, and vote self serving politicians out of office.

      Peter Konetchy for Senate in Michigan – 2012

    27. Stanley Allen says:

      The current discussions about the national budget illustrate the duplicity of Congress. A "balanced budget" cannot control spending. A budget is only a plan to spend already authorized funds, is does not authorize funding. Ask any CPA. Also, all revenues and expenditures should be included in the budget. No so-called "off budget" expenditures, such as "entitlements", should be allowed. Congress (and the press and often Heritage) confuse the terms deficit and debt, usually by equating them. While the debt must be eliminated, probably needing to take a few years, the deficit must be eliminated now. Reducing the deficit ony means we slow the rate at which we increase debt. Congress (both Houses) are only playing political games to stay in power so they can control our private lives.

    28. Blair Franconia, NH says:

      They've been proposing balanced budget amendments since the 1930s. And where have they gone? Nowhere.
      That's where.

    29. Spooner says:

      I would whole heatedly support and campaign for a Balance Budget Amendment!
      It absolutely must be modeled in simple precise language;
      preferably after one of the American State's Constitutions.
      I live in Maryland and our Republics current 1867 Constitution does have a Balanced Budget Requirement.
      Maryland's Governor submits his budget to the Delegates and Senators.
      It's language is ambiguous.
      And as long as we are on this fraudulent Federal Reserve paper NO ONE can budget!

    30. Wayne Peterkin says:

      I support a strong Balanced Budget Amendment. While I agree with the Heritage Foundation's stance that such an amendment does not solve the thorny spending issues and entitlement reforms that are needed to correct the nation's spending problems, these things cannot and should not be included in a constitutional amendment and must be addressed by legislation that follows the adoption of this amendment. Pass the amendment first and force the legislation required to abide by it. We will not see the spending restraints without this amendment.

    31. dexter60 says:

      What comes out of Washington from such a large share of the GDP should be an evidence enough: w/o a budget there cannot be a 'budget deficit;' political payoffs with taxpayer money is a crime yet cannot be punished by equally corrupt authorities whom we cannot supposedly remove but by an election – where that particularly important form of fraud is also supported by 'elected lawmakers' themselves.
      Human rights cannot be 'voted' away.
      More than two years of constant reminders and demonstrations of these and other corrosive effects makes the coming twelve months probably the last opportunity to clean out all three branches of government to save the Republic — if it turns out the only solution comes to violence to restore The Law there is no reason for much further delay, this is not a nation of cowards.
      They can have impeachment by the rules of the Constitution or from 2,700 to 3,465 feet per second.

    32. Steven Crain says:

      I've been a big supporter of the BBA until I watched the video at: http://www.youtube.com/watch?v=1LItVsxYFHE&fe

      I'm keenly interested in Scott Bradley's alternative presented int his video which sounds like a more plausible and easier way to accomplish the same financial objectives.

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