Balancing the Budget by Decree
A proposed amendment would let politicians have it both ways
By George J. Church
(TIME, July 26, 1982) -- It is an idea whose time has clearly come, at least for politicians in an election year. It is also an idea that makes many economists, constitutional scholars and other Americans shudder. The idea: an amendment to the U.S. Constitution requiring that the federal budget be balanced each year. Before the summer is over, there is a strong chance that Congress will take the first steps toward incorporating this elusive goal into the basic law of theland.
The Republican-controlled Senate is expected to vote this week on the amendment. Odds area that it will be approved: 61 Senators have signed as co-sponsors, and that number is only six short of the two-thirds majority needed for passage. New York Republican Barber Conable Jr. last week told the White House that he has enough signatures to execute a discharge petition that would pull the amendment out of the House Judiciary Committee, where it has long been bottled up.
Popular support for the amendment is so strong that Speaker Tip O'Neil, a leading foe of the idea, nonetheless predicts that the amendment will pass if it reaches the House floor. It would then have to be ratified by 38 states within seven years before it could become effective. But legislatures of 31 states have already passed resolutions calling for a constitutional convention to draft a balanced-budget amendment. Indeed, one reason for the push to get an amendmet through Congress is to head off a convention, which many politicians fear could not be limited to that one subject, but would attempt to change the Constitution in many other, perhaps radical, ways.
The congressional amendment has the vigorous support of Ronald Reagan. The President last week pressed hard for it and another favorite idea, his New Federalism program; he journeyed t Baltimore to plug that plan at a gathering of county officials and found himself hugging a gag gift of a stuffed " presidential seal." But his mood was stern in the White House Rose Garden, where he told reporters after a meeting with amendment supporters: "We must not, and we will not, permit prospects for lasting economic recovery to be buried beneath an endless tide of red ink." Reagan this week plans to announce the formation of committees in each of the 50 states to push for ratification of the amendment.
Skeptics scent a strong whiff of callous political cynicism and even hypocrisy in all this agitation, an effort by Congress and the White House to have it both ways. Only a month ago, Congress passed a budget resolution that would allow for a record-shattering deficit of $ 103.9 billion in fiscal 1983. Even that is less red ink than would have flowed from the budget proposals that Reagan presented in February. The balanced-budget amendment allows Congress and the President to reassure voters that they are, at bottom, all for fiscal responsibility. Says Democratic Congressman James Shannon of Massachusetts: "It's like getting drunk and going to the police and saying, 'Lock me up, I can't help myself!'"
Whatever the motives, the balanced-budget amendment must now be taken seriously. It provides that Congress each year adopt a budget plan under which total spending does not exceed total receipts. Once that is done, "Congress shall not pass and the President shall not sign any bill" that would push actual spending above the estimated totals. As a further prod to keep spending down, taxes could not increase as a proportion of national income unless
Congress specifically voted to let this happen (on the other hand, a deficit could legally occur if tax collections fell below expectations). There are two other loopholes: 1) Congress could waive the balanced-budget requirement by a simple majority in any year during which the nation was fighting a declared war; 2) Congress could vote deficit spending in years of peace by a three-fifths majority.
Advocates of the amendment call a doleful roll: 21 deficits in the past 22 fiscal years; a national debt that now tops $ 1 trillion; interest on that debt, at $ 83 billion a year, which exceeds the total of all federal spending 25 years ago. These numbers, they insist, prove that Congress and the White House cannot resist the pressures from special interests to squander the taxpayers' money unless a prohibition is written into the Constitution. Says Utah Republican Senator Orrin Hatch, the amendment's chief sponsor: "There's an institutional, structural bias to spend the public's money beyond our means to do so." He may have a point.
Opponents voice philosophical and practical objections. Adoption of the amendment, they say, would amount to writing into the Constitution a hotly disputed economic theory, one that posts budget deficits as the roof of all fiscal evil. Asserts Political Scientist Norman Ornstein of Catholic University: "The Constitution is not supposed to make economic policy."
Some 80 economists, led by Nobel Laureate Paul Samuelson, have signed an open letter to members of Congress contending that the amendment would rob the Government of needed flexibility in adjusting spending and tax plans. There are doubts also about whether the amendment could be enforced. Republican Senator Charles Mathias of Maryland warns that "cunning will prevail"; the legislators who now vote for record deficits can always find ways to conceal future spending. And what if a recession forces expenditures on programs mandated by law (welfare, for example), above levels that Congress ha authorized? Would lawsuits force the federal courts to decide what spending is or is not constitutional? Says Democratic Senator Patrick Leahy of Vermont: "The courts would do a line-by-line review of the federal budget," a prospect sure to horrify conservatives who distrust the federal judiciary.
The amendment has definite appeal to be sure; while it would not make it impossible for Congress to keep on spending more than it takes in, it would at least help to curtail profligacy. But the amendment also raises enough questions to recall H.L. Mencken's aphorism: for every complex problem there is a solution that is "simple, neat and wrong."
Reported by Evan Thomas/Washington
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