Balanced Budget Amendment and
Supporters of a balanced budget amendment argue that Congress has shown itself both unwilling and incapable of balancing the federal budget. A constitutional amendment is necessary to force lawmakers to do what, on their own, they cannot: get a handle on out-of-control spending. Opponents of the idea argue it will transfer budget decision-making to the courts, will result in massive cuts in Social Security and usurp Congress' constitutional authority to control government purse strings.
Perpetual annual deficits, compounded by the fact that the federal government has not ended a fiscal year in surplus since 1969, has led many economists, former presidents, Members of Congress and the public- at-large to call for more stringent and binding budget mechanisms -- mechanisms that Congress will not be able to routinely waive or ignore. Many Americans have become disillusioned with a Congress that has consistently found ways to circumvent the few budgetary restraints it has set for itself:
In 1985, Congress passed the Balanced Budget and Emergency Deficit Control Act (P.L. 99-177; popularly known as Gramm-Rudman-Hollings) to establish steadily-declining deficit targets, supposedly bringing a balanced budget in FY 1991. In September 1987, faced with a projected budget deficit of $183 billion for FY 1988 (far exceeding the $108 billion target), Congress revised the law (P.L. 100-119) and adopted higher deficit levels supposedly bringing a balanced budget in FY 1993. In 1990, and again in 1993, Congress revised and extended these targets -- postponing a balanced budget indefinitely.
Congressional budget rules allow the House to automatically raise the ceiling on the federal debt without a separate vote -- protecting members from the difficult decision of increasing the federal debt.
These and other actions demonstrate to many that Congress has neither the will nor the desire to cut wasteful government spending and enact a balanced budget.
The BBA's Recent History
In addition to the line-item veto, one of the more rigorous proposals that has garnered significant popular and congressional support is the balanced budget amendment. A June 11,1992 Investors' Business Daily article cited a Washington Post/ABC News poll finding that 75 percent of Americans favor a balanced budget amendment. However, Congress has been considering balanced budget amendments since 1936 with little success. The closest Congress ever came to passing one was in 1986 when the Senate defeated a balanced budget resolution by one vote.
The House last considered a balanced budget amendment in March 1994. At that time, four different versions of the amendment were debated. The first, a Stenholm/Smith (OR) resolution, would have amended the U.S. Constitution to require that total outlays for any fiscal year not exceed total receipts for that year unless three-fifths of the House and three-fifths of the Senate vote to incur a deficit. The authors made an exception for any fiscal year in which a declaration of war is in effect or the U.S. is engaged in a military conflict that poses a threat to national security. Their proposal also required (1) a three-fifths roll call vote in each chamber to increase the public debt limit and (2) that a majority of the membership of each chamber approve a tax increase. On final passage, it failed 271-153 -- 12 votes shy of the two-thirds margin.
The House also rejected a Kyl substitute giving the president the line- item veto, limiting outlays to 19 percent of GDP for a given fiscal year, and requiring a three-fifths vote in both chambers to waive the requirement, and a Wise/Pomeroy/Price substitute allowing a majority of the House and Senate to waive the balanced budget requirement in times of war, military conflict or economic recession and exempting Social Security. Although the House adopted a Barton/Tauzin amendment requiring three-fifths roll- call votes of the total membership of the House and Senate or a declaration of war to waive the balanced budget amendment, and a three- fifths vote to increase the debt limit or raise taxes, it was not considered to be finally adopted since the substitutes were considered under king-of-the-hill procedures (i.e., the last amendment adopted in committee of the whole is reported back the House for a vote on final passage). Because the Stenholm/Smith (OR) amendment was considered and passed after passage of the Barton/Tauzin amendment, only the former was considered to have been adopted in the Committee of the Whole. Only the Stenholm/Smith (OR) version was reported back to the House, where it failed to receive the necessary two-thirds vote.
A few weeks prior to House consideration of the BBA, the Senate debated a similar resolution, rejecting it on March 1, 1994 by a vote of 63-37 -- four votes short of the required two-thirds margin. That measure (S.J.Res. 41), sponsored by Senator Simon, would have made the balanced budget requirement effective two years after its ratification or in 2002, whichever came later. During consideration, the Senate also rejected an alternative resolution offered by Senator Reid (1) ensuring that courts cannot impose tax hikes if Congress fails to balance the budget, (2) exempting Social Security, (3) allowing Congress to waive the balanced budget requirement in times of economic recession, and (4) permitting the government to borrow for infrastructure needs. It was defeated 22-78.
Amendments to the Constitution
As stipulated in the U.S. Constitution, amendments to our founding document must be approved by two-thirds of those present and voting in both the House and Senate and three-fourths (38) of the 50 state legislatures. The Constitution has been amended 27 times, including amendments protecting the free exercise of religion; protecting the right to keep and bear arms; protecting against unreasonable searches and seizures; guaranteeing the right to a speedy and public trial; protecting against cruel and unusual punishment; abolishing slavery; guaranteeing equal protection under the law to all; giving Congress the power to tax; prohibiting the manufacture, sale or transportation of alcohol and then later repealing this prohibition; and giving women the right to vote. The most recent constitutional amendment -- prohibiting a congressional pay raise from taking effect during the Congress in which it was adopted -- was ratified on May 7, 1992.
Balanced Budget Amendment
The bill amends the U.S. Constitution to require that total outlays for any fiscal year do not exceed total receipts for that year. The resolution defines "receipts" as all receipts except those derived from borrowing, and "outlays" as all outlays except principal payments on the debt. It requires that the president submit, and Congress pass, a balanced budget each fiscal year unless three-fifths of the whole House and three-fifths of the whole Senate vote to incur a deficit. The resolution waives the balanced budget requirement for any fiscal year in which a declaration of war is in effect or the U.S. is engaged in an "imminent and serious threat to national security." A joint resolution indicating this situation must be adopted by a majority of the total membership of each house and must be signed by the president.
The bill stipulates that the federal public debt will be limited to its level on the first day of the second fiscal year beginning after ratification of the BBA. The limit may only be increased by a three- fifths roll call vote in each chamber. Tax increases must also be approved by a three-fifths majority of the membership of each house.
Finally, the bill mandates that all associated votes must be roll call votes, and that the balanced budget requirement will take effect in FY 2002 or the second fiscal year after it is ratified, whichever is later.
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