The Good, the Bad, and the Bogus Balanced Budget Amendment

As part of the deal that gave President Barack Obama the increase in the federal debt ceiling he so desperately wanted, both houses of Congress are required to hold a vote on a Balanced Budget Amendment to the U.S. Constitution. The House of Representatives has already acted but failed to achieve the two-thirds support necessary for it to pass. Now it’s the Senate’s turn.

There are actually three different versions of the amendment under consideration. The good, or strong, version sponsored by Senators Orrin Hatch (R-Utah), Mike Lee (R-Utah), Rand Paul (R-Ky.), and Pat Toomey (R-Pa.) not only requires that federal outlays match revenues but also makes it harder to raise taxes by requiring a two-thirds super-majority of both houses to do so. It also pegs total federal spending to an historic proportion of the total U.S. economy and prevents the courts from being able to order a tax increase to achieve balance should the Congress pass a budget in which spending exceeds revenues. It is a balanced budget amendment with teeth. All 47 Republicans senators have co-sponsored this approach, and it will be voted on this week.

The bad version, the one the House voted on but failed to pass, simply requires that expenditures be equal to income. Critics of this approach say it is bad because it would be far less helpful in the effort to hold total federal spending down, and could actually be counter-productive, if the courts were to mandate a tax increase to achieve balance. Some call it the tax-increase balanced budget amendment.

The bogus version, which the Senate is also expected to take up this week, is being proposed by Sen. Mark Udall (D-Colo.) and is presumed to have the active support of Senate Majority Leader Harry Reid (D-Nev.). To say that it has so many holes in it that it resembles a piece of Swiss cheese is unfair to the Swiss. It is much worse than merely bad. It’s downright deceitful, in that it masquerades as a balanced budget amendment, when in fact it is no such thing.

Under Udall’s Amendment:
A 60 percent supermajority of Congress could vote at any time to waive the requirement that the books must balance.
The amendment would be fully suspended not only in a time of declared war, but also in the event of a minor military action supported by a Congressional resolution. It does not exempt just the costs of the military action from the balance requirement – it exempts the entire budget.
It exempts Social Security revenues and outlays from the balance calculation, while at the same time “Constitutionalizing” Social Security as an entitlement.
It would prohibit Congress “from providing income tax breaks for people earning over $1,000,000 a year, unless we are running surpluses (those surpluses must also not be eliminated, if such a tax break were enacted).” That provision is socially divisive, profoundly partisan, and almost certainly in conflict with the Fourteenth Amendment.

The Udall Amendment is not a serious effort to address a serious problem, but rather an exercise in the worst kind of political cynicism: a vote purely to provide political cover to senators who are in tough fights for re-election next November and who want to be able to claim that they voted for a balanced budget amendment. They want to pretend to be in favor of a concept that the public overwhelmingly supports, while all along knowing that the Udall amendment will fail because it is so fundamentally fraudulent that no senator who really wants to balance the budget would ever vote for it.

There are effective ways to balance the budget, ineffective ways, and bogus ways. Udall’s proposal is a bogus balanced budget amendment that should be exposed for the act of political deceit that it is. Anyone who wants a balanced budget amendment with teeth should be for the Hatch-Lee strong version — and only that good version.