It's time for the Balanced Budget Amendment
In 1997, a proposed amendment to the Constitution that would require Congress to balance the budget received sixty-six votes – falling just one vote short of the required two-thirds majority it needed to pass and be sent on to the states for ratification.
That was the last time Congress considered a balanced budget amendment. The national debt at that time was over five and a half trillion dollars. Today it is over fourteen trillion. Coincidence?
Year after year Congress borrows more money and spends all that it borrows; and year after year they vote to increase our national debt limit. It’s like being able to increase your credit limit after you’ve maxed out your credit cards.
Soon the government will reach its current legal debt limit of 14.3 trillion dollars, and the only way that it can continue to borrow is if Congress raises that limit. That means that Obama needs Republican support for the idea. And that means that Republicans have leverage. The question is, will they use it? And will they use it for a long term solution, or just some cosmetic cuts (or reductions in the rate of growth)?
Republicans should welcome the opportunity to put the issue of fiscal responsibility squarely on Obama and the Democrats by linking any debt limit increase to passage of a balanced budget amendment.
With a new conservative majority in the House of Representatives, and several more real conservatives in the Senate, not to mention a greater public sense of our fiscal reality, we have the best chance to push a balanced budget amendment that we have had in years. When you add the fact that many vulnerable Senate Democrats are up for reelection in 2012, now is the time.
The cuts in spending that a balanced budget would require would be temporarily painful, but those cuts will help reduce the national government closer to the role envisioned by those who created it. Voters in each state would then be free to decide for themselves just how much big government they really want to pay for.
Our country’s history clearly demonstrates that the lack of a balanced budget requirement is an outright invitation – if not a guarantee – of fiscal irresponsibility. The presence of a fourteen trillion dollar debt is evidence of that fact.
But just how do you run up a fourteen trillion dollar national debt in the first place? Simple. By growing a government that spends more than it takes in every year. This year’s deficit alone is reported to be between one and a half to two trillion dollars, (yes, they’re still not sure). How does this happen? Because Democrats (and some Republicans) love to propose bigger government on the basis of “helping people”, but conservatives have usually been able to prevent the massive tax increases it would take to finance it. So Congress borrows. It’s an easier political choice than cutting programs or increasing taxes. No immediate pain. Let the grandkids sort it out.
The problem is that we are borrowing to cover our operating costs. In effect, paying our living expenses with a national credit card.
If the country were a business, it would be forced into bankruptcy by its creditors. But a business can’t forcibly extract more capital from its shareholders, or print money, or legally cook its own books so lenders will keep lending. Governments can. But continued borrowing and printing will only lead to more stagnation at best. At worse, well…use your imagination.
Rham Emanuel famously suggested that a political crisis is a terrible thing to waste. Well, we are certainly in a crisis. And, as 2010 proved, voters are awakening to that fact. So it’s time to put the crisis to good use and leverage it towards a real, long-term solution.
The only way to force sound fiscal policy on our government is to require it. And the only way to do that is to pass a balanced budget amendment. Anything short of that is an open door to continue down – or eventually get back on – the same path that we are on now.
It is a crisis that will end either painfully or catastrophically. The question is whether we choose the better of those two options.