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Thoughts on the Balanced Budget Amendment

We don’t amend the Constitution terribly often.  The Framers of our system of government, Federalism, didn’t intend for the Constitution to be immutable.  However, they also sought to safeguard it by ensuring that a sufficient amount of deliberation would be required to amend it.  Many people don’t realize that the Bill of Rights weren’t part of the original Constitution as ratified in 1789.  They were part of 12 which were approved by the first Congress and passed to states for approval.  The ten that were ratified by 3/4’s of the states became the Bill of Rights.

There are two ways to implement an Amendment.  They are through a Constitutional convention of the states, or through congress with subsequent approval by 3/4’s of the states.  The procedure is specified in Article V of the Constitution.

The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as Part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress; Provided that no Amendment which may be made prior to the Year One thousand eight hundred and eight shall in any Manner affect the first and fourth Clauses in the Ninth Section of the first Article; and that no State, without its Consent, shall be deprived of its equal Suffrage in the Senate.

And so, you can see this approval process is not something that can be done willy-nilly.   The Founders did not think that they could foresee every eventuality, but neither did they think that amending this document should be undertaken lightly.  It has only been done 17 times since the original 10 were ratified in 1792, and the 21st Amendment repealed the 18th (prohibition).  And so, it behooves every American to give careful attention and consideration to any such proposal.

S.J.Res.10 is a  joint resolution proposing an amendment to the Constitution of the United States relative to balancing the budget.  Judging by the name, this sounds pretty good.  After all, many of the states operate under just such a stricture.  There are those who argue that until the federal government is forced to live within its means, it will continue to operate out of balance with the states, that it has an insurmountable advantage over the states and that this fact destroys the checks and balances sought by the Framers.  This may be so, but we ought to look at what’s being proposed and how it is to be implemented before we jump on the bandwagon.   Fortunately, it’s not very long, so let’s have a look.

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled (two-thirds of each House concurring therein), That the following article is proposed as an amendment to the Constitution of the United States, which shall be valid to all intents and purposes as part of the Constitution when ratified by the legislatures of three-fourths of the several States:

OK, so far so good.  This appears to be in accord with what is stipulated in the Constitution.  2/3’s of each House of Congress needs to pass this, then it will be sent to the state legislatures for ratification.  Once 3/4’s approve it, it will become part of the Constitution.

But what’s in it?

‘Section 1. Total outlays for any fiscal year shall not exceed total receipts for that fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific excess of outlays over receipts by a roll call vote.

The government can’t spend more than they bring in for a given year, unless Congress votes to do otherwise, by 2/3’s vote.  Granted, 2/3’s is a big deal, but not impossible.  We should consider that Congress levies taxes, and is, according to the Constitution and the Federalist papers’ interpretation, supposed to control spending of allocations.  Which is Congress more likely to do?  Raise taxes, cut spending, or decide to borrow?  There would seem to be a particularly clear record on that score.

Section 2. Total outlays for any fiscal year shall not exceed 18 percent of the gross domestic product of the United States for the calendar year ending before the beginning of such fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific amount in excess of such 18 percent by a roll call vote.

Well this would seem to limit the amount of spending, and presumably revenue, to 18% of GDP…  unless of course, Congress decides to spend more than that, again by 2/3’s vote.  So, here’s another provision that can be ignored by Congress, if they find it expedient to do so.  Do any of the amendments which make up the Bill of Rights have such provisions for Congress to override them?  In fact, the only Amendment that comes close to having such a clause is the 20th Amendment, which let’s Congress choose another day to meet as part of it’s proscribed yearly assembly.   The Congress shall assemble at least once in every year, and such meeting shall begin at noon on the 3d day of January, unless they shall by law appoint a different day. Note, the clause doesn’t say they can choose not to meet, but merely allows them to designate a different day.

‘Section 3. Prior to each fiscal year, the President shall transmit to the Congress a proposed budget for the United States Government for that fiscal year in which–

  1. total outlays do not exceed total receipts; and
  2. total outlays do not exceed 18 percent of the gross domestic product of the United States for the calendar year ending before the beginning of such fiscal year.

The President will write the budget and determine how the money is to be spent.  But he won’t spend more than 18% of GDP.  By the way, the GDP is calculated by the Bureau of Economic Analysis, which is part of the Executive Branch.  The federal system is an architecture of checks and balances not because all men are of good will, but because some may not be.  In spite of the Budget and Accounting Act of 1921, the Constitution stipulates that the power of taxation and appropriation is supposed to reside firmly within the Congressional sphere.  According to Article 1, Section 8: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; … Furthermore, Article 1, Section 9 stipulates:

No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.

As the Legislative Branch, Congress is responsible for making laws.  The Executive Branch is not supposed to make laws.

Section 4. Any bill that imposes a new tax or increases the statutory rate of any tax or the aggregate amount of revenue may pass only by a two-thirds majority of the duly chosen and sworn Members of each House of Congress by a roll call vote. For the purpose of determining any increase in revenue under this section, there shall be excluded any increase resulting from the lowering of the statutory rate of any tax.

Congress requires a 2/3’s vote of both Houses to raise taxes or create new ones.  If revenue increases as a result of lowering taxes, that’s OK.   This section doesn’t seem too bad.

‘Section 5. The limit on the debt of the United States shall not be increased, unless three-fifths of the duly chosen and sworn Members of each House of Congress shall provide for such an increase by a roll call vote.

This seems pretty pointless.  Congress won’t increase the debt limit, unless they decide, by 3/5’s vote to do so.  Note, this is even less than the 2/3’s specified in other provisions.

‘Section 6. The Congress may waive the provisions of sections 1, 2, 3, and 5 of this article for any fiscal year in which a declaration of war against a nation-state is in effect and in which a majority of the duly chosen and sworn Members of each House of Congress shall provide for a specific excess by a roll call vote.

If there is a declaration of war in effect, then Congress is pretty much free to ignore this amendment.  What does this mean?  Has Congress returned a declaration of war or does any sort of conflict that the executive embroils the country in count?  This seems like a pretty big loophole for ignoring the rules.  In this situation, only a majority vote is required.  To what purpose the funds for which excess funding may be borrowed is not specified.

‘Section 7. The Congress may waive the provisions of sections 1, 2, 3, and 5 of this article in any fiscal year in which the United States is engaged in a military conflict that causes an imminent and serious military threat to national security and is so declared by three-fifths of the duly chosen and sworn Members of each House of Congress by a roll call vote. Such suspension must identify and be limited to the specific excess of outlays for that fiscal year made necessary by the identified military conflict.

This section seems to specify that if engaged in a military conflict (like Libya) then the extra moneys must be spent in spent in support of that military conflict.  A 3/5’s vote is required to borrow those extra funds.

‘Section 8. No court of the United States or of any State shall order any increase in revenue to enforce this article.

The courts cannot order taxes raised.  However, the President can, and indeed is obligated to do so to comply with this amendment.  The government will be prohibited from spending more than it takes in.  If it tries to do so, the courts will have to adjudicate the issue from a Constitutional standpoint.  The Executive as the implementation arm of the government will be required to enforce the law.  Since he supplies the budget under this amendment …

‘Section 9. Total receipts shall include all receipts of the United States Government except those derived from borrowing. Total outlays shall include all outlays of the United States Government except those for repayment of debt principal.

This seems rather nebulous.   Although this section ostensibly defines terms,  what is defined as on or off the books will make a great deal of difference in how things are calculated.  Consider the “quantitative easing” engaged in by the Federal reserve, or the games played with how GM supposedly paid off its debt to the taxpayers.

‘Section 10. The Congress shall have power to enforce and implement this article by appropriate legislation, which may rely on estimates of outlays, receipts, and gross domestic product.

Estimates upon which all decisions will be made will be used as justification for the acts of Congress to implement supporting legislation for enacting this amendment.  More enabling legislation, will of course be required.

‘Section 11. This article shall take effect beginning with the fifth fiscal year beginning after its ratification.’.

This amendment won’t take affect  until 5 years after it’s been ratified.  This should provide plenty of time to avoid political fallout.

This Amendment could be interpreted to fundamentally change the way our government works.  That warrants careful consideration, indeed.

H/T to Publius Huldah


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