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Both Houses of Congress are set to vote on the balanced budget amendment this month. We get an update from Kwame Holman.

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ELIZABETH FARNSWORTH: Now, the balanced budget amendment. Both Houses of Congress are set to vote on the constitutional amendment this month. We get an update from Kwame Holman.

KWAME HOLMAN: In his State of the Union address Tuesday night President Clinton issued the challenge everybody in Congress was expecting and almost all members are ready to accept.

PRESIDENT CLINTON: Let this Congress be the Congress that finally balances the budget. (applause)

KWAME HOLMAN: The Democrats cheered and the Republicans cheered because it looks like this could be the Congress that does balance the federal budget. But that led President Clinton to his next point, which was not accepted with quite the same enthusiasm.

PRESIDENT CLINTON: Balancing the budget requires only your vote and my signature. It does not require us to rewrite our Constitution. (applause) I believe--(applause)--I believe it is both unnecessary, unwise to adopt a balanced budget amendment that could cripple our country in time of economic crisis and force unwanted results such as judges halting Social Security checks or increasing taxes.

KWAME HOLMAN: There were hisses and groans, primarily from the Republicans, who almost unanimously support a balanced budget amendment to the Constitution. In fact, Senate Majority Leader Trent Lott made it his number one priority when the new Congress convened in January.

SEN. TRENT LOTT, Majority Leader: (January) For 28 years we've not had a balanced budget. And it'll be at least probably four or five more years before we would have one. We've had good men and women make commitments to balanced budgets, including presidents. We've had laws on the books. But as a matter of fact, we think that it takes more than a plan to have a balanced budget, or an agreement to get a balanced budget. We think the constitutional requirement is absolutely essential. And it's what I call satisfaction guaranteed.

KWAME HOLMAN: Last week the Senate Judiciary Committee approved the amendment which for the first time would make balancing the federal budget a constitutional requirement. The vote was thirteen to five, Chairman Orrin Hatch being one of the thirteen.

SEN. ORRIN HATCH, Chairman, Judiciary Committee: What we have to do is put some fiscal mechanism into the Constitution that will cause Congress to have to live within its means.

KWAME HOLMAN: But leading the opposition was Vermont's Patrick Leahy, the committee's ranking Democrat.

SEN. PATRICK LEAHY, (D) Vermont: We've had four years of declining deficits. It's the first time in the 22 years I've been here we've had a president who submitted a budget and got it passed that's had four years of declining deficits of either party. And the president is working with the Congress to enact a balanced budget plan. So I worry why we draft a constitutional amendment, something that we have avoided for two hundred and some odd years.

KWAME HOLMAN: Amending the Constitution will require overwhelming support. Two thirds of the House and Senate would have to approve the measure, followed by 3/4 of the states. If that, indeed, happens, the amendment, as currently written, would require a balanced federal budget by the year 2002, or two years after the states ratify it, whichever comes later. Thereafter, a 3/5 vote in both the House and Senate would be needed in order for Congress to waive the balanced budget requirement and spend more than the Treasury has and in order to raise the debt ceiling, the amount of money the government is allowed to borrow. But some Republicans and most Democrats, like Massachusetts Edward Kennedy, argue that funds designated to pay Social Security benefits should be separated from the balanced budget equation.

SEN. EDWARD KENNEDY, (D) Massachusetts: Now, Mr. Chairman, there are those that say, well, here we go again, mentioning Social Security, scaring our seniors.

KWAME HOLMAN: But Kennedy added that if Social Security isn't excluded from the balanced budget amendment, the retirement found would be subject to the same budget cutting rules as any other government program.

SEN. EDWARD KENNEDY: And to the seniors, you're at risk, you're at risk, your paycheck is at risk. Your paycheck is at risk. Your retirement's at risk. We can't tell you now how much. We may pass enabling legislation. We're not prepared to say even what's going to be in that enabling legislation till after we pass this measure.

SEN. ORRIN HATCH: I would have really felt bereft if we hadn't had some forceful arguments from Sen. Kennedy on Social Security. The fact of the matter is, is that we believe that there are thousands of items in the federal budget that are important that are included within the balanced budget amendment's purview, none more important than Social Security, and it should be included as well.

KWAME HOLMAN: But the opposition by Kennedy and others who want to exempt Social Security makes the upcoming balanced budget amendment vote in the Senate a toss-up.

SPOKESMAN: Mr. Hatfield. Mr. Hatfield--no.

KWAME HOLMAN: It could be just as close as the vote two years ago when Oregon's Mark Hatfield quietly but defiantly withstood the pressure of his own party and became the only Republican to vote against the balanced budget amendment. It fell one vote short of the sixty-seven needed for passage.

SPOKESMAN: 2/3 of the Senators voting not having voted in the affirmative, the joint resolution is not passed.

KWAME HOLMAN: And the situation in the House looks just as precarious. At the President's speech Tuesday night, members talked about the amendment and its chances of passing this year. Florida Republican Bill McCollum supports the amendment.

KWAME HOLMAN: If the amendment got through the House last time around with more than a dozen votes to spare, why is it being said now that, that it's very questionable whether the House will be able to pass this?

REP. BILL McCOLLUM, (R) Florida: I think it's very questionable for two reasons. One is we've had a change in the composition of Congress. The ratio between Republicans and Democrats is closer. The pressure of the Democrat leadership and the President is much greater on the Democrat members of Congress. So the freshmen Democrats over here are going to get enormous pressure, and we already see it happening, to vote no. With the President's speech it's even worse.

KWAME HOLMAN: Louisiana's John Breaux is a Democrat and amendment supporter in the Senate.

SEN. JOHN BREAUX, (D) Louisiana: The fact that the President has now proposed a balanced budget himself and has shown that it can be done without having a constitutional amendment requiring it to be done I think gives a lot of people reason to say, look, we can do it without the constitutional amendment. I happen to take the position that we need that as an extra requirement; we need that as an insurance policy that we will continue balancing, and in the future. We may have--the next president might never give one to Congress, a balanced budget. And this mechanism I think would ensure that we do it anyway.

KWAME HOLMAN: The fate of the balanced budget amendment could rest with a handful of undeclared Democrats like freshman Senator Robert Torricelli who voted for such an amendment three times during his career in the House.

SEN. ROBERT TORRICELLI, (D) New Jersey: During the Bush administration and the early Clinton administration I cast these votes as a message to each president to send balanced budgets to this Congress, restore some sense to this process. Well, that's happened. The good news is Bill Clinton now introduced this deficit four years in a row, so the question is, is it necessary now to proceed with changing the Constitution to permanently settle an issue which largely by our annual fiscal policy has largely turned a dramatic corner.

KWAME HOLMAN: The prediction of California Democrat Vic Fazio, a member of the House Democratic leadership, is that a constitutional amendment won't pass Congress because there will be an actual balanced budget.

REP. VIC FAZIO, (D) California: I think frankly this is not an issue two years from now. If we've done our job and put in place the policies in legislation, the constitutional amendment will be forgotten. The American public wants us to act. They only see the constitutional amendment as a way to force that. If we show we have the courage to do it, and not put the government into court or on automatic pilot, then I think they'll actually respect us more, and the constitutional amendment will be seen simply as a way of bringing about what they ultimately wanted, which is the policy change.

KWAME HOLMAN: Both Houses of Congress expect to vote on the balanced budget amendment by the end of the month. Republican leaders say the chamber with the best chance of passing it will go first and thereby put pressure on the other body to do the same.

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