Three reasons conservatives should oppose a balanced budget amendment

August 1, 2011

By James Ledbetter
The opinions expressed are his own.

One of the crucial lubricants allowing Congress to resolve the debt-ceiling friction was, apparently, the inclusion of a provision to vote on a balanced-budget amendment. Assuming this version of the deal passes, then at some time between September 30 and December 31 of this year, both houses of Congress will be required to vote on a  ‘‘joint resolution proposing a balanced budget amendment to the Constitution of the United States.’’

Whatever the political expediency of this provision may be, a balanced budget amendment is a bad idea from a conservative point of view, for at least three reasons.

It won’t work. Historically, conservatives have opposed extending government authority in places where it is not effective. You can find all the evidence you need to conclude that balanced budget requirements are useless by simply investigating the oft-repeated claim that 49 states have laws requiring a balanced budget. Leave aside the falsity of the claim and just consider the logic: if so many states are required to balance their budgets, why are so many states in the red?

The answer is that requiring state governments to annually balance their books simply encourages them to find clever ways to disguise debt and deficits. For example: California has both a Constitutional and a statutory requirement that its budgets be balanced. Would any sane person maintain that the state’s books have been anything resembling healthy for at least a decade? This year, after some brutal spending cuts, the governor’s office found that the state still had a short-term deficit of more than $9 billion and $35 billion in long-term debt. The governor’s budget report noted that California’s “massive budget deficits for most of the past decade…have been largely the result of a reliance on one-time solutions, borrowing, accounting maneuvers, and cuts or revenues that were illusory and therefore did not materialize.”

If that sounds familiar, it may be because, as Richard Quest pointed out on CNN Sunday evening, we’ve witnessed numerous Congressional attempts in recent decades to rein in federal deficits—including Gramm-Rudman in 1985 and the Budget Enforcement Act of 1990—all of which fell victim to legislative legerdemain. Why would a federal balanced budget amendment be any different?

It won’t pass, because it’s bad for the states. In recent weeks, many Republicans have behaved as if a balanced-budget amendment is some kind of magic wand that need only be proposed in order to achieve its desired effect. And that might be true, if the desired effect is a vote that can then be used for demagogic purposes.

But in terms of becoming binding law, I’d sooner bet on the Baltimore Orioles winning the World Series this year than on a balanced budget amendment being tacked onto the Constitution before, say, 2015 at the earliest. Constitutional amendments are, by design, difficult to achieve, requiring the approval of two-thirds of the Congress and three-fourths of the state legislatures. The most recent amendment, which bans any sitting Congress from raising its own salary, was ratified in 1992, a mere 203 years after it was first officially proposed.

The fact—which one assumes House GOP members realize—is that states don’t want a federal balanced budget amendment. As my colleague Gregg Easterbrook notes, some 40 percent of all state spending is based on money states get from the federal government. Any genuine cuts in federal spending would cut off that spigot, and the states would have to fund themselves; moreover, as a group of Nobel-winning economists noted last month, a cash-strapped federal government would be even more likely to created unfunded mandates for the states to pick up spending that feds could no longer afford.

It’s a misuse of the Constitution. Of the 27 amendments to the Constitution, almost none have dealt with fiscal or even economic issues. Since the initial Bill of Rights, constitutional amendments mostly fall into two categories: definitive statements of change in American society (abolishing slavery, lowering the voting age), and procedural shifts in the legislative and executive branches (presidential term limits, electing Senators by popular vote).

It should be obvious why other, more temporally-tied types of amendments risk mischief. Any amendment that cannot be practically enforced is the constitutional equivalent of graffiti (think of Prohibition). And even the biggest fans of balanced budget amendments acknowledge that enforcement is highly difficult: are we going to send officials to jail if the government overspends? If so, who will take the rap?

That might sound absurd, but in fact the 26th amendment of Alabama’s constitution says that “any person” who allows the state to go into the red will be subject to impeachment, plus a fine of up to $5000 or up to two years in jail. (UPDATE: The office of Alabama’s current treasurer, Young Boozer, tells me that they do not know of any case in more than a century of someone being punished for such fiscal transgressions.) It seems highly unlikely that Congress and three-fourths of the states are going to agree to anything this stringent. With no explicit enforcement provisions, the result, as retired conservative judge Robert Bork has been saying for decades, would be a litigation orgy. In the event of the government overspending under a balanced-budget amendment, Bork predicted the launch of “hundreds, if not thousands, of lawsuits around the country, many of them on inconsistent theories and providing inconsistent results. By the time the Supreme Court straightened the whole matter out, the budget in question would be at least four years out of date and lawsuits involving the next three fiscal years would be slowly climbing toward the Supreme Court.”

Conservatives true to the hailed icons of Edmund Burke and Friedrich Hayek would run screaming from such a cascade of unintended consequences. For better or worse, that does not describe today’s Republican party.

9 comments

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True, but irrelevant; the Amendment proviso is a sop to legislators facing voters who think it’s a cure for our bad habits.

Posted by RET_SFC | Report as abusive

Even if we went one stop better, to require a balanced balance sheet, they would hire Bernie Madoff’s CPA to do any accruals.

Posted by threeRivers | Report as abusive

For the self-righteous to seek amendments to the Constitution to impose their will on an otherwise unwilling populace is nothing new. The great success of Prohibition should show us how truly effective Constitutional amendments can be.

Posted by Bob9999 | Report as abusive

The discussion is moot as the provision will never pass. Speaking as a progressive, however, it certainly would put an end to all of these unfunded Republican launched wars.

Posted by seattlesh | Report as abusive

It can’t be fixed, it must collapse.

Posted by tmc | Report as abusive

There are few if any true liberals and even fewer true conservatives holding elected positions in the U.S. government. So, any conversation based upon fact and reason is an exercise in futility. Most of the United States Congress are servants of the Oligarchs. I for one stand with these previous commentators. The “Highway to Hell” is truly paved with the best of intentions. Now if only we had the best of leadership?

By the way Seattlesh, a “Balanced Budget Amendment” would put a stop to Democratic launched wars as well (Viet Nam). After all we really only have one political party “The War Party”. All the public disagreement between Jackasses and Pachyderms is nothing more than posturing and distraction from the real issues.

Posted by coyotle | Report as abusive

A balanced budget? Does that mean if your state has had a huge windfall like Bill Gates presenting it with a weeks profit from Microsoft, would the state have to find new ways to spend it, and balance the books?
In bad times, why can’t they borrow money like everybody else against future good times?

Posted by Tomslad | Report as abusive

[...] James Ledbetter at Reuters argues that even conservatives should oppose a balanced budget amendment.  His reasons are more pragmatic.  He argues that it won’t work. Historically, conservatives have opposed extending government authority in places where it is not effective. You can find all the evidence you need to conclude that balanced budget requirements are useless by simply investigating the oft-repeated claim that 49 states have laws requiring a balanced budget. Leave aside the falsity of the claimand just consider the logic: if so many states are required to balance their budgets, why are so many states in the red? [...]

[...] Debts for this year miraculously vanish onto the next year (or quarter or month) payment periods. A report by California’s governor said the state’s “massive budget deficits for most of the past decade…have been largely the [...]

[...] Robert Samuelson compiled his objections in the Washington Post.   James Ledbetter explained Three Reasons Conservatives Should Oppose the balanced budget amendment for Reuters.  David Leonhardt, economics reporter for the New York [...]

[...] balanced budget amendment will probably be hotly disputed: both on whether to have one and over what form the amendment should take. I welcome such a debate, [...]

The author only considers short term difficulties. The Amendment should allow a surplus. Of course the central bank would oppose that as they would be affected when the Federal Government had to stop borrowing and might become a competitor.
The Amendment should also allow limited borrowing to even the governments cash flow, but with draconian provisions if the debt reached a certain level as a percentage of revenue or GDP.
The only thing that ever killed great civilizations is debt! Out of control, run amok debt!

Posted by csellefson | Report as abusive

Let’s look at the first point, that it won’t work and would simply be skirted. Can anyone honestly say that this hasn’t happened to every provision already in the Constitution? Look at the Commerce Clause. FDR’s government fined a farmer for growing corn for his own use under the Commerce Clause. Using the author’s argument, nothing should be in the Constitution.

Point 2 isn’t a theoretical argument of why the amendment is bad, but a practical reality. This does not make it a “bad idea from a conservative’s point of view” unless all unpopular ideas are by definition bad ideas.

Point 3 is related to Point 1: Any amendment that will be skirted will look silly and become graffiti. Again, go back to my first point. Give me a part of the Constitution, and I’ll show you how it has been skirted (except for forbidding quartering of troops).

I am surprised the author didn’t use the most commonly cited reason: It would create an incentive to raise taxes.

Posted by AdamSmith76 | Report as abusive