Wednesday, July 20, 2011

Balanced Budget Amendment: A Terrible Idea

The "Balanced Budget Amendment" is one of the worst proposals to receive attention in Congress this year. Two versions of the proposed constitutional amendment exist; the House approved a measure yesterday.

Although the House and Senate versions differ, the proposed amendment, if passed, would generally mandate that Congress balance the national budget each year. It would also require that a supermajority of Congress approve any tax increases, legislation to raise the debt ceiling or a decision to run a deficit during any particular year. Both measures propose exceptions during times of military crisis.

Many observers doubt that the Senate will pass a Balanced Budget Amendment. Hopefully, cooler heads will prevail in the Senate because the proposed amendment is a terrible idea for several reasons.

First, the proposal suffers because it looks like a piece of legislation rather than constitutional text. Throughout the nation's history, the Constitution has provided boundaries for governmental power. The Constitution, however, is drawn in broad terms, which makes it flexible enough to endure across time (as Chief Justice Marshall argued in Marbury v. Madison).

The proposed amendment, however, would alter this sensible approach to the Constitution. Its terms would rigidly prescribe behavior in a setting that screams for flexibility: planning how to allocate the nation's vast financial resources. Such decisions, that depend upon factors that undoubtedly vary across time, are appropriately made by Congress each year. The Framers of the Constitution wisely allocated spending and taxation power to Congress, but they did not hobble Congress with details that would bind the country to one tightly drawn path.

Furthermore, the proposed amendment could potentially turn each budgetary cycle into a constitutional nightmare. Federal judges wisely believe that they should reach Constitutional questions whenever some other legal principle cannot solve cases. This amendment, however, would force Congress annually to craft budgets around detailed constitutional text. Decisions to tax and spend are naturally very heated. These decisions, however, will likely become even more explosive if they implicate complex constitutional text.

It is also unclear who would interpret the meaning of the proposed amendment. Although courts routinely engage in constitutional interpretation, they are not usually involved in budgetary matters. It is pretty unlikely that federal courts want to enter the thicket of annual budget battles. Indeed, the courts could rely upon a host of procedural rules and other doctrines to avoid such contests (like standing and the political question doctrine).

If the Supreme Court declines to interpret the meaning of the proposed amendment, then Congress and possibly the president would have that job. This, however, would likely make the terms of the amendment vulnerable to short-term political interests -- which would defeat the purpose behind the amendment itself: creating a permanent barrier to budget deficits and tax increases.

Wise commentators have noted other problems with the proposed amendment. Potentially, Congress could hide some of its spending by placing it "off-budget" -- like Social Security. It could also legislate that certain spending take place across several years, rather than all at once. Indeed, scheme like these allow state governments to achieve balanced budgets (required by state law).

Passing a budget is a serious task; so is amending the Constitution. Proposed constitutional amendments rarely succeed. Hopefully, the proposed Balanced Budget Amendment, with all of its flaws, will face a similar fate as the hundreds of other unsuccessful attempts to alter the Constitution.

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