Wednesday, February 9, 2011

Beware of the Balanced Budget Amendment

Currently, there are multiple Joint Resolutions in the House - 112th Congress, for a balanced budget amendment. There appears to be two which have the most support, H.J.Res.1 with 109 cosponsors and H.J.Res.2 with 178 cosponsors.  They are basically the same but do have a few minor differences. HJR1 includes a Section about limiting spending to 20% of GDP (Gross Domestic Product - the sum of the production for the country in a given year) unless 2/3 vote for increase. #2 does not have this section. #1 requires 3/5 vote to increase taxes where #2 requires a majority. Other sections appear to be identical.

Many are pushing to get one of these through Congress and passed onto the States for ratification.  Although it all sounds good, let's make sure we are doing the right thing before we add to the Constitution.  Here are some of my concerns:
1. Most all sections of the amendment can be made of no effect by a vote of Congress. So, as tricky (or deceitful) as they have shown themselves to be, I would imagine they would find some way around the amendment when they wanted.

2. HJR1 limits spending to 1/5 of GDP. Just as the official inflation rate has been manipulated to look better by excluding fuel and food prices, and as the unemployment rate is massaged by excluding those not receiving jobless benefits, I would expect some sort of manipulation in the GDP number, also.

3. It still allows for a 3/5 vote to increase the debt limit. So, there is nothing that would stop Washington from borrowing more.

4. The President is to submit a balanced budget based on proposed revenues. We already see gross distortion in estimating income and expenses for the things they want.

5. The whole amendment can be waived in any year when war is declared, or when there is a military conflict which causes a serious military threat to national security. So, if this had been in effect for the past nine years, it could have been waived each year as we are at war. It would have done nothing to control the excess spending we are experiencing.

6. The real kicker - the revenue and outlay numbers for the "balanced budget" do not include limiting the borrowing of more money and do not include the payments on debt (interest). So, we could and probably would continually go further in debt each year; in fact, we would almost have to because they would be doing a budget where all tax revenue is spent on budget items, exclusive of the debt repayment. So, where do we get the money to pay the interest and principle for the debt? We would have to borrow it.

7. None of this would take effect until at least 2017. So, from now until then, if ratified, spending could continue out of control. Debt would continue to be increased.

I would love limits on government spending but for some reason, I do not trust this to actually work or do us any good for the next few years.  It does not seem right to add an Amendment to the Constitution which is full of exceptions and built-in over-ride allowances.  What we need are people filling the seats who will do the job we sent them there to do. Stop spending, NOW. 

Congress controls the purse strings.  There is nothing to stop them from demanding a balanced budget, right now.  If getting control of spending is something they believe is good, "just do it!"  NO waiting and NO excuses!

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