Why the Balanced Budget Amendment is a Farce

Why the Balanced Budget Amendment is a Farce

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Congressional Republicans have introduced at least nine different balanced budget amendments they want Congress to approve in exchange for raising the debt limit. The Senate's Tea Party caucus has threatened to filibuster the debt limit until the House and Senate muster the two-thirds votes necessary. Holding the debt limit hostage is a terrible idea, but that's for another blog. The balanced budget amendment, which is trotted out every time concern about the deficit gets serious, is also a bad idea. Here's why:

1) It's a gimmick. Congress would always rather pass a mechanism than do the odious work of actually cutting spending and raising revenues. That's what led to the Gramm-Rudman spending cap law in 1985 -- it allowed Congress to promise to cut the deficit instead of actually doing it (Gramm-Rudman's automatic spending cuts never took effect as planned).

2) It wastes time. The two-thirds hurdle is high. Congress could spin its wheels on this, and even if it did pass, it could take years to enact -- presuming the required 38 states agreed. Prediction: They would not. When the states' own balanced budget requirements are killing them in the middle of a recession, one of the few places left to go for money is the federal government, which recently helped cover their shortfalls with stimulus money.

3) States don't do it. Proponents of a balanced budget amendment claim states have to balance their budgets, so why shouldn't the federal government? Not so fast. States are typically required to balance their operating budgets -- not their capital budgets for infrastructure (the federal government has a single unified budget for both). Some states live within their means. Many do not, and they have run up substantial debt during the recession.

4) It makes balancing the budget sound easy. It's not. It's excruciatingly difficult, which is why the big deficit-reduction proposal from President Obama's deficit commission -- which both parties don't like because it goes after each side's sacred cows -- doesn't get to balance until after 2030. GOP House Budget Committee Chairman Paul Ryan's celebrated "Roadmap for America's Future" plan wouldn't balance the budget until 2063.

5) Running a balanced budget isn't always a good idea. The lesson the nation learned during the Depression is that there are times when it makes sense for the federal government to borrow money to help cushion the blow of bad times. During recessions, revenues fall sharply, but spending rises for "automatic stabilizer" programs such as unemployment insurance. Two-thirds of Congress could vote to suspend the constitutional requirement in bad times, but would two-thirds of the current House do that? Not likely.

6) There's a perfectly good alternative to a balanced budget amendment. It's called real deficit reduction. It's Congress's job. And responsible Congresses and presidents have actually done it throughout the 1980s and 1990s. All their hard work (and a booming economy in the 1990s) put the country on a path to four years of budget surpluses in 1998-2001. The argument for the amendment is that Congress just can't do serious deficit reduction without a gun to its head. Baloney. It takes leadership and courage and -- crucially -- a willingness to compromise. It can be done. It has been done.

George Hager is a member of the USA Today editorial board.

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