Reservations About a Balanced Budget Amendment

Calling for a balanced budget amendment has been a staple campaign issue for conservative Republicans for years. Undeniably, our nation is beset by fearful fiscal woes. However, a balanced budget amendment isn’t the answer.

Let me emphasize that I endorse a balanced budget in principle. Indeed, in my recent article, “Good Cop, Bad Cop,” I wrote, “The greatest threat to our country’s future is chronic overspending by the federal government.” Government, like individuals, should live within its means, and because it isn’t, we are bankrupting ourselves and perpetrating a great evil on our children by saddling them with a national debt that now exceeds $13 trillion.

Further, I reject the economic orthodoxy that claims that government has mystical power to spend us into prosperity by running deficits. All deficit spending can do is what an inflationary monetary policy does, namely, distort production, not produce a net increase in sustainable production.

In short, then, I believe that balancing government budgets is a virtue and that government fiscal deficits are a vice. So what objections could I possibly have to a balanced budget amendment? I have two … well, make that two-and-a-half.

The “half” is my skepticism about the facile notion—so common among both conservatives and liberals—that laws and amendments solve every problem. Not so. In practice, no law can work unless there is the will to enforce it and abide by it. Remember Public Law #95-435? Of course, not. Adopted by Congress in October 1978, it was one of several laws solemnly binding Congress to a balanced budget (in that case, by 1982). Needless to say, Congress has perennially proven incapable of abiding by such laws.

Ah, but wouldn’t enshrining a balanced budget in the Constitution itself accomplish the goal? I doubt it. I’ve already written about the way the Constitution is selectively observed. An additional reason for skepticism is that many state governments are running large deficits despite state constitutions that expressly ban deficit spending.

Let’s assume, though, that human nature is transformed so that Congress would actually balance the budget if the Constitution said it must. There reside the two major problems with passing a constitutional amendment to balance the budget:

The first problem is a practical consideration. How would Congress close a deficit of $1.5 trillion? While free-market economists like yours truly would love to see federal spending cut by $1.5 trillion (actually, by more!), can you imagine the political donnybrook in Washington this would precipitate? The only way the Big Government majority in Washington would agree to a balanced budget would be to raise taxes one dollar for every dollar of spending cuts. In other words, the best we could hope for would be spending cuts of three-quarters of a trillion dollars combined with increasing tax revenues by three-quarters of a trillion dollars. Ouch! In the economy’s current weak condition, increasing the tax burden by $750 billion would absolutely crush us. This “cure” would kill the patient.

The other problem with a balanced budget amendment is that it would legitimize current constitutional abuses. As it currently stands, the Constitution does not authorize most of what the federal government spends.

The founders crafted a Constitution of limited enumerated powers of government. They clearly were of the “strict construction” school, believing that the federal government should do only what the Constitution explicitly stipulates and nothing else.

In the decades since, the “loose construction” philosophy has mangled that original intent by adopting the opposite view that the federal government can do anything that the Constitution doesn’t explicitly state that it can’t do—a formula for virtually unlimited, infinitely elastic expansion of government.

If we, as a country, would strictly abide by the letter of the Constitution, federal spending would be a mere fraction of what it currently is. We wouldn’t have trillion-dollar deficits and nobody would be talking about a balanced budget amendment.

Amending the Constitution requires prodigious effort. That is why it has been done fewer than 20 times since the Bill of Rights was ratified in 1791. Rather than knock ourselves out trying to amend the Constitution, let’s strive to restore a correct understanding of the Constitution. We don’t need to amend the Constitution as much as we need to read it, understand it, and abide by it.

The founders have given us the only tool we need to put an end to deficit spending. Let’s begin using it.

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  • c-kingsley

    “…believing that the federal government should do only what the Constitution explicitly stipulates and nothing else.”

    One of the arguments Against the Bill of Rights was that it might give the impression, without these limitations on the government, that the government could restrict the right of free speech, and assembly, and of worship, etc. The basic constitution doesn’t give the power to restrict these things, why should there be an amendment saying that they can’t?

    Even though Prohibition turned out to be a bad idea, at least it was done properly. The Federal government didn’t have the power to do it, so they amended the constitution to give it the power. (Then re-amended it to take it back away.) The Federal government does not have the power to require me to buy health insurance, but it’s going to do so anyway, under the pretense that it is “regulating interstate commerce” by requiring me to buy a product that I am not allowed to buy from any state but my own. Yeah, right. (And, while they’re at it, grant 753 additional powers to the Secretary of Health and Human Services, powers that congress didn’t have to give in the first place.)

    However, given where we are today, you can’t just shut off the spigot on unconstitutional federal largess. There are too many people who are now dependent on it, and too many people planning to be dependent on it. If you turned off Social Security and Medicare today, too many people would be harmed. But these two programs, even if they were constitutional, are promises that the government won’t even be able to keep. We need to start weaning people off of these dependencies, because they won’t be available in the future anyway.