Should the Constitution Require the Budget to be Balanced and Federal Spending Capped? (S. Joint Res. 24)

What is S. Joint Res. 24?

(Updated May 22, 2018)

This resolution would propose a constitutional amendment that requires the federal government to have a balanced budget with spending capped at 18 percent of the economy’s total output unless two-thirds of each chamber of Congress votes to allow deficit spending. Additionally, it would require a vote from two-thirds of each chamber to impose a new tax, increase tax rates, increase the amount of revenue. To raise the debt limit, this bill would require a three-fifths vote by both chambers of Congress.

The president would be required to submit an annual budget that balances and doesn’t exceed 18 percent of the U.S. GDP. If a declaration of war is in effect, Congress would be able to waive all but one of these requirements — it would still have to approve tax increases with a two-thirds majority in each chamber.

As a constitutional amendment, this resolution would have to be approved by two-thirds of both the House and Senate to be formally proposed to states. It would then need to be ratified by three-fourths of the states (38 to be exact) before becoming a part of the Constitution. The amendment could also be enacted by a Constitutional Convention convened by two-thirds (currently 34) of the state legislatures.

Argument in favor

The federal government is in the midst of a debt crisis, and Congress doesn’t seem to have the will to do anything to significantly change course. This balanced budget amendment wisely caps spending and makes it harder to raise taxes, but affords Congress the flexibility to spend more when at war.

Argument opposed

A balanced budget amendment with a spending cap as imposed by this resolution would make it very difficult for Congress to continue funding vital programs at their current levels. This amendment’s exceptions would still allow Congress to run up deficits, it’d just take a two-thirds majority vote.

Impact

Federal agencies; state governments; Congress; and the President.

Cost of S. Joint Res. 24

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sponsoring Sen. Orrin Hatch (R-UT) introduced this would-be balanced budget amendment to the Constitution as he has done 28 times previously in order to bring fiscal responsibility to the federal government. In his introductory speech, he quoted a senator from 70 years ago, Millard Tydings (D-MD), who said “In no other way except by an amendment to the Constitution can Congress be compelled to balance its budget in peacetime.”

Hatch added:

“Two essential facts compel me once again to introduce a constitutional amendment to require fiscal responsibility: the gravity of the national debt crisis and the fact that neither willpower nor legislation will solve it… First, the national debt crisis poses a significant and growing threat to the economic and national security of this country. In fact, we have never been in such an extended, perilous period than we are right now. Second, Congress has tried and failed to address this crisis by either willpower or legislation and will actually do so only if the Constitution requires it. Third, the decision whether to use the Constitution to require fiscal responsibility belongs to the American people, not to Congress. We can either take the responsibility we were elected for and propose a balanced budget amendment or the American people may do it for us.”

Not all think that a balanced budget amendment would be beneficial. An article from the left-leaning Brookings Institution cited several reasons it could be a bad idea: that budget deficits are helpful by providing a cushion for safety net programs during economic downturns; minority parties could hijack the process because of the need for a super-majority; it could limit access to Social Security and Medicare; and Congress could still get around it.

This legislation has the support of 49 cosponsors in the Senate, all of whom are Republicans.

Media:

• Sponsoring Sen. Orrin Hatch (R-UT) Press Release