PASS THE BALANCED BUDGET AMENDMENT

NTF Issue Paper: balancedbudget2.doc.  8-11.

NEBRASKA TAXPAYERS FOR FREEDOM ISSUE PAPER:
PASS THE BALANCED BUDGET AMENDMENT.

BACKGROUND.  In 1995, a Balanced Budget Amendment passed the House but failed to pass in the Senate by 1 vote.  The U.S. national debt has reached over a massive $14.3 trillion, and our national deficit teeters at $1.65 trillion.  Congress has raised the national debt ceiling, despite strong objections by fiscal conservatives, beyond $14.3 trillion, in return for a short list of budget cuts and limp promises to cut the budget comprehensively in the future. Wasteful spending threatens our future economic growth and will terribly burden our children and grandchildren with debt. The 111^th Congress in 2010 added more to the national debt than the first 100 Congresses totaled.  Our debt is larger than our gross domestic product.  Our federal budget stands at $3.5 trillion.  Uncle Sam owes his creditors $14.3 trillion that he does not have in his bank.  Congress has a spending problem, annually spending billions on waste, fraud, and abuse.

RATIONALE. A constitutional amendment will force Congress to make the difficult choices necessary to balance the budget for present and future generations of taxpayers.   A BBA would force legislators to closely scrutinize federal programs and hold accountable federal agencies and departments.  49 states require balanced budgets.  The only way to preserve the fiscal stability of our nation and avoid default and financial blackmail by nations like Red China, who hold much of our debt, is to pass a stringent Balanced Budget Amendment. A principled BBA should include stringent clauses to control taxes, spending, and borrowing, ensure our national defense, and enforce the BBA requirements.  Federal spending is reckless in present terms and in the future.  Congress must control spending long term, because it cannot continue to hike taxes to fund overspending, tax hikes that cripple our economy.  Additional borrowing places a huge fiscal burden on future generations.  Congress must control the current spending cycle.  The FY 2011-12 Obama Budget, according to the Congressional Budget Office, will spend $1.2 trillion more than revenues incoming, an enormous additional debt forced onto our children.  Congressmen should understand that the best means to prod state legislatures to ratify a BBA is to demonstrate by conscientious spending cuts that it reflects the will of the American people to accept such cuts to balance the budget. Total interest payments on our debt already spiral out of control, reaching $413 billion in 2010 and rising to $430.4 billion in 2011.  Moody’s warned that when interest owed on the debt reaches 18%-20% of revenue, the U.S. gold-plated Triple-A credit rating will suffer downgrading. Standard & Poor’s downgraded the U.S. credit rating from AAA to AA+ and warned that future downgrades might occur, because the recent congressional “deal” did not sufficiently slow the debt buildup. 

SENATE VERSION.  Several conservative senators introduced S.J. Res 5 in February, 2011.  This joint resolution now sits in the Senate Judiciary Committee, awaiting a vote.  If passed by 2/3^rd of each House and after ratification by the legislatures of 3/4ths of our states, it will constitutionally require a balanced budget.  Section 1 establishes that total expenditures for any fiscal year cannot exceed total revenues for such fiscal year.  Section 2 requires that total expenditures not exceed 18% of the Gross Domestic Product for the calendar year ending prior to the beginning of such fiscal year.  Section 3 states that Congress can suspend the limitations imposed by the first 2 sections in any fiscal year in which 2/3rds of members of each House by roll call vote vote for a specific excess of expenditures over revenues or over 18% of the GDP for the calendar year ending prior to the beginning of such fiscal year.  Section 4 declares that a bill to levy a new tax or hike the rate of a current tax cannot become law, unless approved by 2/3rds of members of each House  by roll call vote. Section 5 mandates that the limit on the U.S. debt cannot increase, unless 2/3rds of each House members provide for such increase by roll call vote.  Such vote may occur during wartime.  Section 6 reads that any member of Congress has legal standing and cause of action to seek judicial enforcement of the BBA, when authorized by a petition signed by 1/3 of either House.  Congress would have the authority to enforce the BBA by necessary legislation.  Section 8 clarifies that total revenues include all federal revenues except those derived from borrowing.  Total expenditures would include all outlays except those to repay debt principal.  Section 9 establishes that the BBA would become effective beginning with the 2^nd fiscal year starting after its ratification by 3/4ths of state legislatures. 

HOUSE BILL.  In March, 2011, Cong. Vernon Buchanan introduced a BBA, House Joint Resolution 4, in the House of Representatives, a resolution that resembles the Senate version.  This resolution is the first step of the legislative process.  Introduced bills and resolutions first go to House committees that deliberate and revise them before passage onto the House floor.  His resolution now in is the Subcommittee on the Constitution within the House Committee on the Judiciary.  Section 1 states that total expenditures for a fiscal year cannot exceed total revenues for that fiscal year, unless 3/5ths of the members of each house would legislate for a specific excess of expenditures over receipts by a roll call vote.  Section 2 declares that the limit on the U.S. public debt cannot increase, unless 3/5ths of the members of each house provide for legislation for such increase by a roll call vote.  Section 3 establishes that, prior to each fiscal year, the President must transmit to Congress a proposed budget for that fiscal year in which total expenditures do not exceed total revenues.   Section 4 reads that no bill to increase revenue will become law unless approved by a majority of members of each House by roll call vote.  Section 5 maintains that Congress may waive the provisions of the BBA for a fiscal year in which a declaration of war is in effect.  Congress may waive the provisions for a fiscal year in which the U.S. is engaged in military conflict which causes an imminent and serious military threat to national security, declared by joint resolution and adopted by a majority of the members of each House.  Section 6 gives Congress authority to enforce and implement the BBA by necessary legislation.  Section 7 offers Congress authority to legislatively provide that expenditures for natural disasters, like hurricanes, do not count as expenditures for purposes of section 1.  Section 8 clarifies that total revenues include all federal revenues except those from borrowing.  Total expenditures include all expenditures except payment of debt principal.  Section 9 states that the BBA will take effect beginning with the 2^nd fiscal year beginning after its ratification or the first fiscal year beginning after 1-31-2016.  

NEBRASKA & OTHER SUPPORTERS.  Sen. Mike Johanns and Cong. Lee Terry support passage of the BBA. Terry introduced amendments in both the 111^th & 112^th Congresses.  Rep. Mike Coffman (CO.) founded a bi-partisan Balanced Budget Caucus to heighten awareness about its necessity and to educate fellow House members.  Caucus membership now numbers 60, including NE Cong. Lee Terry and IA Cong. Steve King.  100 House members support a BBA; all GOP senators support it.

BBA POPULAR.  A 2011 Sachs/Mason-Dixon poll found that 65% of the public supports the BBA, 27% oppose it, and 8% remain undecided.