Not Insane--but Very Unbalanced : Don’t be fooled by balanced-budget amendment

Once again Congress is splashing around with the issue of amending the U.S. Constitution to require a balanced federal budget. Sounds nice, eh? No more deficit spending. The idea is certainly appealing, especially for its political capital in an election year. The message is simple and makes a nice TV sound bite: Don’t spend more than you earn. However, such an amendment would be irresponsible, deceptive and bad public policy.

HERE WE GO: Hearings began this week on a bill introduced by Sen. Paul Simon (D-Ill.). The House soon will take up its version, introduced by Rep. Charles W. Stenholm (D-Tex.). Passage requires a two-thirds vote in each house and ratification by 38 states. That’s quite an obstacle course, fortunately.

The amendment would limit total outlays in each fiscal year to receipts for that same year. A balanced budget would be required regardless of the prevailing economic climate or unavoidable special needs.

In the event of a recession and lower tax receipts, too bad, spending programs would have to be cut. A balanced budget could worsen and prolong economic downturns, putting a straitjacket on the federal government. The amendment would also require that exceptions to a balanced budget be approved by three-fifths of both the House and Senate. Whatever happened to democratic, simple majority rule?

Under the balanced-budget formula, cutting spending would be easier than raising taxes, even if higher taxes were needed. The amendment would alter longstanding congressional voting procedures by requiring more votes to raise taxes than to cut programs. That would favor large corporations and the wealthy over low- and middle-income households that benefit from many government programs.

DOWN WE GO: One can argue that many states, including California, already require balanced budgets. True, but much of that balancing act (which is more often achieved on paper than in actuality) depends on federal grants to finance state programs. That’s certainly the case in California: Bear in mind that Gov. Pete Wilson (rightly in our view) is seeking billions in federal reimbursement for California’s costs for illegal immigrants to balance next year’s state budget. The Clinton Administration has not responded, but an amendment for a balanced budget would severely limit its flexibility in considering such expenditures.

The President and Congress have the power to put together a balanced budget now. For years, both have ignored that responsibility. Ironically, Congress is taking up the balanced-budget amendment with new enthusiasm just when Washington has managed to reduce deficit spending significantly. Surely Congress has the confidence and discipline to continue that deficit-cutting mission. Passing a balanced-budget amendment would be a dereliction of duty.