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The Balanced Budget Amendment

Senator Orrin Hatch (R-UT) has been trying to pass a balanced budget amendment to the U.S. Constitution for the better part of the last 30 years.  He’s making another go of it, along with a group of Republican Senate allies.  “If you don’t have this kind of fiscal discipline, you’ll never get there,” Hatch maintains.  “We’re worse than addicts.”

Writing for the Daily Caller, Chris Moody has some fun comparing this parade of “addicts” to an “after-school special.”  It does sound rather sad to hear some very senior Senators complaining they’re helpless to stop blowing huge piles of taxpayer money unless they’re restrained with a constitutional amendment.  It’s like the Wolfman asking to be chained up in the basement before the full moon rises.

Hatch’s amendment came within one heartbreaking vote of the 66 needed for victory back in 1997, and has never come close to that high-water mark since.  His co-sponsor in the current effort, Senator John Cornyn of Texas, told National Review that success might come from tying the balanced budget amendment to a deal for raising the debt ceiling, which will have to happen sometime in March at the latest.  “The question is, what price is the Democratic leadership in the Senate willing to pay in order to get a longer extension of the debt ceiling?” asked Cornyn.  “Personally, I think that a vote on a balanced-budget amendment is one of the prices we should exact for a vote on the debt ceiling.”

Freshman Senator Rand Paul of Kentucky has his own, separate balanced-budget proposal in the works as well.  Unlike Hatch’s, it would not make allowances for extra spending in military emergencies.

Are these amendments just hollow gestures?  Hatch’s long record demonstrates he’s serious about getting one passed – it’s not just a symbolic effort meant to placate his constituents.  The arguments against such an amendment are becoming rather threadbare.  It’s very obvious nothing less than a Constitutional amendment, or a drastic measure like refusing to raise the debt ceiling, will stop the Washington spending binge… especially after a State of the Union address from a President who announced a “spending freeze” accompanied by billions in new “investments.”

The economic reality underlying a balanced-budget commitment is that, over time, federal revenues remain fixed at roughly 19% of our Gross Domestic Product.  They bounce around a little from year to year, but always return to that 19% baseline, with remarkable consistency.  One reason is that increased tax rates produce avoidance behavior that retards the economy, giving the government a larger share of a shrinking total.  It’s just about impossible for the government to sustain its income at a higher level for long.  Allowing it to accumulate higher budget commitments is simply a recipe for insolvency.

Tying the budget to this GDP limit is a good way to prevent the creation of long-term entitlements and government jobs that become unsustainable over time.  Hatch’s hometown paper, the Salt Lake Tribune, says that a balanced budget amendment “would have forced Congress to roll back spending during the economic downturn of the late 2000s, tossing hundreds of thousands of people out of work and driving the country into another great depression.”  To the extent this unsupported assertion is true, it’s because previous big spenders ordained government expansion that could not be sustained during an economic downturn. 

Why should the government be the only organism in our economy that never has to plan for a rainy day?  No business model that includes expenses in excess of its projected income would be able to survive.  If we’re going to treat government as a “partner” in business, as the President advocates, why should we allow it to spend vastly more money than it can possibly take in?

Viewed from this perspective, a balanced budget amendment seems like a reasonable acknowledgement of economic reality, not an arbitrary restraint to keep shivering addicts from hurting themselves.  Its advocates would be wiser to emphasize how it will restrain the politicians who don’t think it’s necessary.  They’re the ones living in a trippy haze, with budget-busting needle tracks in their arms.

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Written By

John Hayward began his blogging career as a guest writer at Hot Air under the pen name "Doctor Zero," producing a collection of essays entitled Doctor Zero: Year One. He is a great admirer of free-market thinkers such as Arthur Laffer, Milton Friedman, and Thomas Sowell. He writes both political and cultural commentary, including book and movie reviews. An avid fan of horror and fantasy fiction, he has produced an e-book collection of short horror stories entitled Persistent Dread. John is a former staff writer for Human Events. He is a regular guest on the Rusty Humphries radio show, and has appeared on numerous other local and national radio programs, including G. Gordon Liddy, BattleLine, and Dennis Miller.

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