Yellow Card: Balanced Budget Amendment

Background

While serving as Vice President in 1798, Thomas Jefferson wrote, “I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government; I mean an additional article taking from the Federal Government the power of borrowing.”

Less than a decade after the establishment of our Constitution, Mr. Jefferson was already wishing to add a Balanced Budget Amendment to the document.

When government spends more than it takes in, it has to borrow money to pay the difference. That debt adds up year after year.

Over the last half century, the federal government has spent more than it has taken in in all but four years.

Our national debt now stands at more than $18 trillion. That’s three times the size of the national debt just 15 years ago, and represents more than $58,000 for every man, woman, and child in the country.

The U.S. Government is the largest debtor in the history of the world.

Just paying the annual interest payments on the national debt consumes more than $400 billion every year. Servicing the national debt is now the third biggest chunk of the federal budget, after only Social Security and defense spending.

Washington is addicted to spending – specifically, spending Other People’s Money. And it doesn’t make a difference whether it’s a Republican President or a Democratic President, a Republican Congress or a Democratic Congress; no matter what the combination, Washington spends more than it takes in.

Even when Congress and the President agree on a long-term budget deal – as they did in 2011, with enactment of the Budget Control Act – it’s not long before they’re trying to wiggle out of the spending constraints they put on themselves.

Families have to balance their budgets. Why shouldn’t Washington?

It’s time to face reality – the only way to stop Washington’s deficit spending spree and force Washington to live under fiscal discipline is to amend the Constitution of the United States to require that federal outlays are no greater than federal receipts.

And, just as important, a proper Balanced Budget Amendment must include language that limits spending, to prevent future Congresses from balancing the budget by simply raising taxes.

Common Pushback

Pushback: “A Balanced Budget Amendment would tie the hands of government, leaving it unable to respond properly to an economic downturn.”

Counter: Tying the hands of government is exactly what’s needed – when those hands have been reaching into the cookie jar year after year, it’s necessary to tie them.

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Pushback: It’s nothing more than political gimmickry, not sound policy.

Counter: It’s no more gimmicky than the smoke-and-mirrors budgeting and accounting that we’ve seen coming out of Washington for decades. And it would have the advantage of being an amendment to the Constitution – presumably, something even Washington politicians would respect.

 

For More Information

Heritage: Considering a Balanced Budget Amendment: Lessons from History

Peter Peterson Foundation: Balanced Budget Amendment: Pros and Cons