Americans Overwhelmingly Favor Balanced Budget AmendmentJuly 22nd, 2011 by Lee Eldridge
According to a new CNN poll, 74% of those polled favor a constitutional amendment to require a balanced federal budget.
Some politicians oppose a balanced budget amendment. Why? It’s simple. Power. Without a balanced budget amendment, politicians are allowed to spend our money without limits, and typically without repercussions. A balanced budget amendment would force Congress and the White House to set fiscal priorities, and to live within our means.
Forty-nine states have balanced budget amendments. It’s time for our federal government to follow suit.
The President was asked about a balanced budget amendment in one of his recent press conferences. After a lengthy explanation as to why, in his opinion, we need to increase tax revenues, he finally commented on the balanced budget amendment: “I think it’s important for everybody to understand that all of us believe that we need to get to a point where eventually we can balance the budget. We don’t need a constitutional amendment to do that; what we need to do is to do our jobs.”
In theory, the President is correct. But in reality, this hasn’t work. Over the last 50 years, we have only had a budget surplus five times. That means that in 45 of the last 50 years (90% of the time), the federal government has spent more money than it has received in tax revenues. Congress has no real incentive to run a balanced budget. They can talk about it’s importance, but they are unwilling to set fiscal priorities that will allow it to happen.
Congress has tried to impose “caps” in the past. They don’t work. Only a balanced budget amendment will force Congress to run a balanced budget. How much more evidence do we need that Congress won’t run a balanced budget unless forced to by the Constitution?
Cut, Cap and Balance
This week the House has passed a bill conservatives have come to call Cut, Cap and Balance. It includes a balanced budget amendment, but it also includes spending cuts and spending caps. This will never pass the Senate. Harry Reid has already called the bill “weak and senseless” and “perhaps some of the worst legislation in the history of this country.” He is unlikely to even allow debate on the bill.
By the way, Americans support Cut, Cap and Balance as well. In the same CNN poll, 66% of respondents favor the idea that “Congress would raise the debt ceiling only if a balanced budget amendment were passed by both houses of Congress and substantial spending cuts and caps on future spending were approved.” Where Americans continue to differ is in the approach to getting to a balanced budget. Similar to other recent polls, CNN found that 34% favor spending cuts only, and 64% favor some combination of cuts and increased taxes to resolve our budget problems. CNN did not attempt to break down those who favor mostly spending cuts from those who favor mostly tax increases. Here’s a Gallup poll where they did break down these numbers.
Critics of a BBA
In the past I have heard two basic arguments against a balanced budget amendment, ignoring the President’s criticism that we just need Congress to do its job. Both are solvable.
1. What if we have a national emergency?
This is extremely easy to solve. Build in a $20 billion fund into the federal budget for national emergencies. Each year, the unused portion of this fund can go to help pay off the national debt. If more than $20 billion is needed in any calendar year, Congress should be allowed to vote on emergency spending beyond the $20 billion, though a two-thirds majority should be required to do so. And if necessary, we should be allowed to borrow the money to make this happen. Borrowing a couple billion to help victims from the next Hurricane Katrina is the right thing to do.
2. We would have to cut services during a recession.
This is a legitimate criticism, and has been my criticism for years on a balanced budget amendment. But this is again solvable. I don’t have a problem with a small amount of deficit spending when times are bad. My bigger problem is that we run deficits in good times and bad times. We can setup a few triggers that allow us to engage in some deficit spending during bad economic times. For instance if unemployment exceeds 8% or when the growth of GDP falls under 2% for two consecutive quarters, we would be allowed to borrow some money to extend emergency services such as unemployment. Though we should also include caps on how much and for how long this can continue before the budget must be fixed to put us back in balance.
Other criticisms? Let me know. I bet there’s a solution just around the corner.
Still Need to Raise the Debt Ceiling
Is Congress and the President any closer to a deal to raise the debt ceiling? I have no idea. Since the Senate is unlikely to even discuss the latest bill from the House, and the President is unwilling to put a specific plan on the table, here’s my suggestion for the House. Craft two separate pieces of legislation, pass them, and send them to the Senate:
One, raise the debt ceiling by $500 billion to $1 trillion, with matching spending cuts. Do not include entitlement reform. Focus on real spending cuts to discretionary programs. Live to fight over entitlements another day.
And two, create a separate bill to pass a balanced budget amendment. The Senate may not take up this bill until after the debt ceiling issue is resolved, but with such overwhelming voter support, they would almost have to take up the bill eventually.
The President has said he will veto any short-term bill to raise the debt limit, but the clock is ticking. Time will run out very soon. And the President won’t be the one to block an increase in the debt ceiling.