Beware the Bogus Balanced Budget Amendment

During the debt ceiling debate, Congress came close to passing Cut, Cap, and Balance, the one plan that would have finally forced the federal government to live within its means and end our unsustainable patterns of overspending and over-borrowing. It was the only plan that had real teeth and did not rely on gimmicks or illusory cuts far off into the future that could be easily reversed by subsequent Congresses.

The “compromise” plan that eventually passed instead did so in part because of the late addition of a requirement to vote on a balanced budget amendment. Even so, this Washington deal is not really what the American people are demanding. They are tired of hurriedly-assembled packages, crafted in back rooms that ultimately fail to solve the problem, instead serving primarily to provide political cover to politicians in Washington. They recognize, in a way that the big spenders in the White House and on Capitol Hill don’t, that the only way to get out of the ever-growing debt crisis is to place Constitutional limits on Congress’ ability to appropriate money and the president’s ability to borrow it.

This means that we need a balanced budget amendment to the Constitution – and one that protects taxpayers by not forcing automatic tax increases to keep revenues in line with rising expenditures. With the federal government growing 25% under the Obama administration, the problem is not under-taxation – it’s over-spending. Did your family budget increase 25% over the past 2 ½ years? Of course not. Everyone tightened their belts except the Obama administration and Congress. The American electorate understands the unsustainable absurdity of such profligate increases in spending, which is likely why most polls show Congress with around a 10% approval rating, while between 70-80% of American voters support the addition of a balanced budget amendment to the U.S. Constitution.

Given this political reality, almost everyone, it seems, is now climbing on board – and therein lies a problem. Not all balanced budget amendments were created equal. The worst idea of them all – and one which may very well be supported by Senate Democratic Leader Harry Reid – is the one introduced by Colorado Sen. Mark Udall and a cohort of Democrats who are in tough fights for re-election in 2012. For political reasons, they want to be able to say they support a balanced budget amendment, but they don’t really want their hands tied when it comes to future spending. It is a cynical political ploy to provide political cover, not a genuine attempt to restrain overspending and impose fiscal discipline.

Sen. Udall says his amendment “is a responsible approach to requiring a balanced budget that would prevent future Congresses from making some of the same mistakes that have led to our debt crisis." The problem is what he doesn’t say.

It’s true that his version of the amendment requires the president to submit a balanced budget to Congress, but the rest of it is laced with so many loopholes that it is basically bogus.

Under Udall’s Amendment:
• A 60 % supermajority of Congress could vote at any time to waive the requirement that the books must balance. It effectively applies only to the House, since the Senate typically requires 60% for nearly everything already.
• The amendment is fully suspended not only in a time of declared war, but also in the event of a minor military action supported by a Congressional resolution.
• It would keep Social Security revenues and outlays off budget and out of reach of the amendment, while at the same time “Constitutionalizing” Social Security.
• It would prohibit Congress “from providing income tax breaks for people earning over $1,000,000 a year, unless we are running surpluses (those surpluses must also not be eliminated if such a tax break were enacted).”

Aside from the fundamental impropriety of writing tax policy by Constitutional amendment, it does so for only one specific set of people, thus promoting implicit class warfare.

Udall’s amendment is shot through with loopholes. Though the Senator’s published talking points refer to an exception in times of “declared war,” the actual language of the amendment says that the requirement that outlays not exceed receipts “shall not apply during any fiscal year in which a declaration of war is in effect or in which the United States is engaged in military conflict which causes an imminent and serious military threat to national security and is so declared by a joint resolution, adopted by a majority of the whole number of each House, which becomes law.” In how many of the last twenty years or so would that loophole have not applied?

Some kind of vague resolution supporting a military action would need only a simple majority of both houses to pass, thus undercutting the supermajority provision, while also enabling the entire budget to be unbalanced, rather than just the defense portion. Is this not the height of irresponsibility?

There are effective ways to balance the budget, there are ineffective ways, and there are bogus ways. Udall’s proposal is a bogus balanced budget amendment that should be exposed for the act of political deceit that it is.

Colin Hanna is president of Let Freedom Ring, a public policy nonprofit based in Pennsylvania.