Balanced Budget Amendment Likely to Pass, Foley Says

House Speaker Thomas S. Foley (D-Wash.) predicted Monday that Congress will pass a constitutional amendment this year that would require the federal government to produce a balanced budget.

Although Foley is personally cool to the idea and warned of potentially dire consequences in terms of tax increases and program cuts, aides said that his prediction on a visit to constituents here was based on strong and increasing support among many liberal Democrats as well as conservatives.

Sen. Paul Simon (D-Ill.), the Senate’s leading sponsor of the amendment designed to wipe out the nation’s $400-billion deficit, confirmed in a telephone interview that support is building rapidly.

Simon, chairman of the Senate Judiciary subcommittee on the Constitution, said that Senate Majority Leader George J. Mitchell (D-Me.) has promised a Senate vote on the amendment by June 1.

A Simon aide said that the strategy is to “have the Senate vote first and then the House.”

“I think we have a real chance of passing it,” Simon said, citing lawmakers’ election-year sensitivity to public cynicism over Congress’ inability to balance either the federal budget, or, because of the House bank scandal, their own checkbooks.

While acknowledging that obtaining the required ratification by three-fourths of the states could take as long as five years, Simon said: “We would really have time to plan and to go at it (reducing the deficit) in a very systematic way.”

In 1986, the Senate fell only one vote short of mustering the two-thirds majority needed to adopt a constitutional amendment. In 1990, the House was only seven votes shy.

If Congress passes a balanced budget amendment now--with the expected enthusiastic backing of President Bush--there is a good chance that the states would ratify it, political scientists said.

“It will be very difficult for states to resist passing it, even though it may lead to a complete shut-off of federal aid,” said Norman J. Ornstein, a fellow at the American Enterprise Institute.

Larry J. Sabato, a University of Virginia government professor, called Foley’s prediction “a shocker” because Democratic leaders have been able to bottle up balanced budget amendments in the past. He said that Democratic support of such a measure now could be “a very shrewd political move,” geared to defuse voter rage at incumbents.

“Many critics have said the House’s check overdraft scandal is exaggerated and the real scandal is the $400-billion deficit,” Sabato explained. “This (passage of a balanced budget amendment) would enable Democrats to say they’re doing something about the real scandal, as opposed to the pseudo-scandal.

“Also, it presents a nice counterpoint to the deficits of the Reagan-Bush years. Although both Congress and the President were at fault, most voters are likely to hold the President more accountable, especially in bad economic times,” Sabato said.

The $400 billion is just this year’s shortfall. The total debt now reaches about $6 trillion.

Speaking to a business group, Foley warned that a balanced budget amendment might require either big tax increases or drastic cuts in federal spending to bring the $400-billion deficit down to zero in three or four years.

He said that it would be a “cold bath” for the economy and place “enormous new burdens” on state governments.

“I am not sure it is going to be beneficial,” Foley told a breakfast meeting of Leadership Spokane.

Simon, speaking from his home in Makanda, Ill., insisted that his proposed amendment is the only way to bring soaring deficits under control. He said that several liberal economists, including Lester Thurow of the Massachusetts Institute of Technology, have switched sides and now support the amendment.

He added: “We have senators who are for it now who voted against it in the past--both Democrats and Republicans.”

Simon’s proposal would take effect within two years of ratification. A deficit would be permitted only if 60% of both houses of Congress approved it.

Many economists fear the shock effect of an instant reduction in U.S. government spending on a wide range of programs, including aid to states and such mandatory benefit programs as Medicare and Medicaid.

Advocates of a balanced budget amendment, however, say it is only right that the federal government’s spending be matched by its revenues and they note that most states already are required to balance their budgets.

Foley, who played a key role in the 1990 agreement between the White House and Congress that produced an estimated $500 billion worth of spending cuts and tax increases, said that adoption of a balanced budget amendment would force “hard choices” to reduce deficits that he said are “unacceptable.”

Aid to education, urban areas, farm programs and payments to individuals under a whole series of social welfare laws would have to be reduced if the amendment were passed, he said.

Nevertheless, the Speaker said, “my guess is the votes are there to pass it (in the House and Senate) . . . so this may be the year.”

Bush would not have a formal role in changing the Constitution, but his advocacy could speed it through state legislatures if the House and Senate act.

Ornstein said that “under normal circumstances, an amendment would not go anywhere because people by and large recognize that, although it has great political appeal, it is a stupid, self-defeating and meaningless thing to do.”

He said it is meaningless because “until Congress is willing to tackle the entitlement problem, which is the tapeworm eating the budget alive, it will always find ways to get around even a constitutional amendment.”

Eaton reported from Spokane and Houston from Washington.