JOINT RESOLUTION
Proposing an amendment to the Constitution of the United States requiring that the Federal budget be balanced.
Resolved by the Senate and House of Representatives of the United States of America in Congress assembled (two-thirds of each House concurring therein), That the following article is proposed as an amendment to the Constitution of the United States, which shall be valid to all intents and purposes as part of the Constitution when ratified by the legislatures of three-fourths of the several States:
`Article--
`Section 1. Total outlays for any fiscal year shall not exceed total receipts for that fiscal year.
`Section 2. 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.
`Section 3. The Congress may provide for suspension of the limitations imposed by section 1 or 2 of this article for any fiscal year for which two-thirds of the whole number of each House shall provide, by a roll call vote, for a specific excess of outlays over receipts or over 18 percent of the gross domestic product of the United States for the calendar year ending prior to the beginning of such fiscal year.
`Section 4. Any bill to levy a new tax or increase the rate of any tax shall not become law unless approved by two-thirds of the whole number of each House of Congress by a roll call vote.
`Section 5. The limit on the debt of the United States held by the public shall not be increased, unless two-thirds of the whole number of each House of Congress shall provide for such an increase by a roll call vote.
`Section 6. Any Member of Congress shall have standing and a cause of action to seek judicial enforcement of this article, when authorized to do so by a petition signed by one-third of the Members of either House of Congress. No court of the United States or of any State shall order any increase in revenue to enforce this article.
`Section 7. The Congress shall have the power to enforce this article by appropriate legislation.
`Section 8. Total receipts shall include all receipts of the United States except those derived from borrowing. Total outlays shall include all outlays of the United States except those for repayment of debt principal.
`Section 9. This article shall become effective beginning with the second fiscal year commencing after its ratification by the legislatures of three-fourths of the several States.'.
To many Americans, the idea of having a balanced budget is highly appealing because we have seen an entire decade of runaway debt fueled by tax cuts, unfunded wars and pork barrel spending by both parties in power. With our debt reaching the entirety of our nation's GDP there is growing alarm at the risk of the national debt not being reigned in. They are right, but this is not the answer.
The proposed amendment as it is written not only does little to address the matters of long term debt, but limits the tools of a government to raise the funds necessary to meet changing budgetary needs. Furthermore, as addressed by Dr. J.R. Kearl, a professor of economics, in a July article addresses the shortsightedness of not distinguishing operations expenditures from capital expenditures. He rightly compares capital expenditures to the kind of debt incurred by everyday citizens when they seek a mortgage for a house that is prohibitive to purchase outright but has significant added value.
Dr. Kearl, like virtually every other mainstream economist in academia also makes the point that there are occasions in which spending increases and debt are beneficial or even necessary for the function of government. As the Senate's bill is written, not only is there a limit on spending (outlays) in excess of revenues, but also limits such spending to 18% of the national GDP. The number itself is not at issue as it is a reasonable number in times of normal relations and economic conditions, but that having a rigid limit is harmful in the event of a catastrophe. Think 9-11, Hurricane Katrina, or the oh so likely event of a Canadian invasion causing a protracted war on our soil. Or how about times such as now in which high unemployment has created increased demand for basic aid programs such as food stamps and medicaid? The super majority necessary to go over the budget is problematic in highly politicized times such as ours as we have witnessed the standstill as a result of two sides refusing to come together. Even for an expenditure that could feasibly get the 2/3rds necessary to override, it would take time and negotiations that could result in a poor response to a major issue.
For those who would argue that welfare programs and social assistance is the kind of debt that we need to squelch, it is useful to use history as an example of debt as a necessity. Over the depression, the national debt rose significantly to stymie the loss of jobs across the nation and avoid some of the worst social ills that come with high unemployment and vagrancy. Such debt was further compounded with the entry of the United States in the Second World War, reaching a higher percentage of GDP than we are experiencing now. The vast majority consider that to be a just and necessary war and a worthwhile expenditure but out entry was debated and avoided until we were struck at Pearl Harbor. Same with some of the spending in the New Deal that is largely credited with at least stabilizing the American economy in the second half of the 1930s. Today it is the ability of the unemployed and poor to obtain food stamps to supplement their insufficient funds. Most of the New Deal and current social programming spending would not have Amendments to the constitution are the law of the land and supersedes all local, state and federal law are intended to improve the performance of government and meet long term needs. All this amendment would provide is provide roadblocks to things being done and give congress even more to bicker about.
So let's hope those Canadians keep those wants of a global empire hidden or that we can all agree to a budget if it ever came to fruition.
The other issue that comes into play with this amendment is the restriction on the government's ability to collect revenue. Any increase to tax revenues would require the 2/3rds super-majority of congress such as that required to overturn a presidential veto. Given that raising taxes is one of the quickest ways to commit political suicide, how often do you think that proportion of Congress is going to vote for an increase of revenue? Even when necessary?
Virtually every major recognized economist in the world has stated that the US debt needs to be resolved through a combination of budget cuts and tax increases. This amendment would, if passed, force the butchering of a variety of programs, including those that have a positive effect on the country and economy. The sudden loss or crippling of government would send us right back into a recession that would grip us for years to come. It is naive to think that by just waving an amendment around that we will instantly have a balanced budget, smaller government and economic prosperity in an instant.
The budget does need to be addressed in a timely manner as we cannot expect to continue to add to our debt forever, but this amendment is not the answer and only plays to the base fears of Americans who have been told for the past thirty years that government is always the problem. Government can be good for the people and economy and when we learn to differentiate beneficial spending from the waste will we come up with a rational solution.
I can guarantee this Tea Party ideology approach will only screw us all.
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