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Published: Saturday, 7/16/2011

Not the answer

Amending the U.S. Constitution to require a balanced budget is a bad idea that never dies.

It's not surprising that the current avalanche of debt inspires renewed calls. Since the political system seems unable to discipline itself not to spend trillions more than it takes in, why not tie lawmakers' hands to keep them from piling more debt on the national credit card?

The constitutional cure, while superficially tempting, would be worse than the underlying disease. A balanced-budget amendment would deprive policy makers of the flexibility they need to address national security and economic emergencies. It would revise the Constitution in a way that would give dangerous power to a congressional minority.

The latest push from lawmakers who advocate the amendment is to couple a vote on the proposal with an agreement to raise the debt ceiling. On the surface, this argument seems benign enough: Why not give states the chance to decide whether the Constitution should mandate a balanced budget?

But policy makers have an independent responsibility to assess whether an amendment is wise. This one, especially in its latest incarnation, is not.

It would require a two-thirds vote in both houses of Congress to run a deficit any year. The same super-majority would be needed to enact any tax increase.

Compare those hurdles to the version of the amendment that passed the House in 1995. It called for a slightly lower three-fifths vote in each house to pass an unbalanced budget or increase the debt ceiling, and a mere majority vote to increase taxes.

The latest version would impose an absolute cap on spending as a share of the economy. It would prevent federal expenditures from exceeding 18 percent of the gross domestic product in any year.

Most unfortunately, the amendment lacks a clause that would let the government exceed that limit to strengthen a struggling economy. No matter how shaky the state of the Union, policy makers would be prevented from adopting emergency spending, such as the extension of unemployment insurance and other countercyclical expenses that have helped cushion the blow of the current economic downturn.

The 18 percent cap on spending is so severe that House Budget Committee Chairman Paul Ryan's economic plan would violate its strictures. So would any budget passed under President Ronald Reagan. With health care costs rising and the number of retiring baby boomers increasing, it would be next to impossible to keep spending to that low share.

Both houses of Congress are expected to vote on the amendment next week. But a responsible lawmaker's obligation does not end at voting against this version.Even a less Draconian rendition, without the spending cap or with lower thresholds for approving tax increases or running deficits, would be wrong.

If a balanced-budget amendment had been in place when the economy crashed in 2008, Congress would have been unable to respond with a stimulus package or efforts to stabilize banks and automakers. Even if you believe that was the wrong policy response, Congress must retain the flexibility to craft the correct one.

The fiscal situation is perilous. It's commendable that members of Congress are trying to right it. The balanced-budget amendment remains a deeply flawed approach to achieving a noble goal.

-- Washington Post



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