Sunday, May 24, 2009

What Is Wrong With A Balanced Budget Amendment to the US Constitution Anyway?

Governor Arnold Schwarzenneger of California said something profound on May 22 and it wasn't a humorous takeoff from a line in one of his Terminator movies like "I'll be back!", "Hasta la vista, baby!" or "You are terminated!"

Although he could have used the last two, it seems.

California has a $24 billion deficit this year on a $110 billion total budget...a 22% shortfall. That is what happens when you over-commit in spending programs and the economy goes south and dries up 'projected' revenues. If the size of California state government spending was held at, just say, FY 2002 levels, 6 short years ago, their budget would be balanced. Have the absolutely critical needs of California increased by 35% in 6 short years?

You can usually control the amount of spending in any company or government but you can not control the incoming revenues.....always remember that whenever you hear anyone speak about why there is a deficit in either.

Anyway , the Governator made an uncharacteristic monumental statement based on conservative fiscal principles that should be chiseled into everyone's heads who want to serve in government: "Sacramento is not Washington — we cannot print our own money. We can only spend what we have."

'We can only spend what we have.' Who is this guy, Thomas Jefferson? How simple a concept; how complex to achieve.

Which brings me to this question: 'What is so wrong with having a balanced budget amendment to the US Constitution anyway?' During the 1980s and into the 90's, you could not walk down the halls of Congress without hearing someone, mostly Republicans but many conservative Southern Democrats as well, talk about the need for balanced budgets. Many saw it as a drop-dead, fail-safe measure to force such an outcome in the absence of responsible leadership on both sides and up and down Independence Avenue.

I was in DC last week and didn't hear a whisper about it from anyone. It is like both sides of the political spectrum have declared the words, 'balanced budget', to be some form of impolite speech that is verboten in public alongside of the usual four-letter words.

I mean, really, what the heck is wrong with talking about a balanced budget anyway?

First of all, the Governator of California has pinned the tail on both the donkey and the elephant. Every state in the Union has to balance their annual budgets through spending cuts and/or tax increases simply because they do not have the power to print their own currency. States did have the right to print their own currency in the formative years of the Republic but they were volatile in worth. Ultimately, multiple state currencies undermined the ability of the new nation to conduct meaningful commerce and have the ability to borrow from foreign sources.

It used to be an unspoken agreement amongst legislators in Congress that balanced budgets were 'a good thing'. Despite their differences, they strove to accomplish such a noble goal without messy entanglements like constitutional requirements to balance the budget in order to allow for spending during emergencies such as war or economic depressions.

Oddly enough, before the Budget Act of 1974 was passed, Congress did a pretty good job of balancing budgets every year from 1791-1974 or so. When debt was piled on to pay for national crises such as the Civil War and WWII, it was subsequently paid down in relatively short order. Sort of a gentleman's agreement, civic responsibility or noblesse oblige, I suppose.

But, conversely, from the moment the Budget Act of 1974 was passed, ostensibly to make the annual budgeting process more formal and predictable, we have embarked on a binge of deficit-spending over the past 35 years that would make former Congresses woozy if they could see it.

We just can not seem to balance the budget by ourselves anymore. Constitutional amendments force us to do the right thing when we collectively don't want to.

Here's why Congress has never passed a Balanced Budget Amendment to the U.S. Constitution:

1. The 'purists' or strict constructionists say that if the Founding Fathers wanted it in there, they would have put it in there.

Retort #1: They didn't want women or African-Americans to vote. They weren't right on those 2 scores either.

2. People on both sides say it would impede the ability of Congress to 'do the people's business'.

Retort #2: If balancing the budget and maintaining a sound currency and economy is not 'the people's business', then what is?

3. Conservatives say that having a Balanced Budget Amendment would mean that Congress might raise taxes to balance the budget.

Retort #3: It just might, which means it is your job as a conservative politician to find and make the spending cuts to protect the rest of us from those awful tax increases.

4. If we had a balanced budget amendment, we would not be able to borrow for economic or natural disaster emergencies.

Retort #4: Like well-run families, companies and states, we could accumulate a rainy-day fund to cover such unanticipated emergencies.


The point is that we have proven beyond a shadow of a doubt that we collectively, and indirectly through the people we have elected to represent us in Congress, can not manage our national budget or impulses to spend. Like the states, we need something concrete and chiseled into the U.S. Constitution to force us to make the tough decisions we have long avoided, just like they did in California.

Let the 28th Amendment to the Constitution be the 'Balanced Budget (Save Us From Ourselves, Please!) Amendment.'

Let's force Congress to pass it this summer, 2009. Contact your representatives and senators on the links on the right side of this column as always.

We need it, desperately.

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