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October 2016 Policy Study, Number 16-3


How To Restore Federal Fiscal Sanity: The State Legislatures Hold The Key


Is A Constitutional Amendment The Only Way We Can Balance The Budget?



Couldn’t Congress and the President balance the budget by statute, if they had enough willpower?


Yes, and pigs could fly if they had wings.  You are more likely to see pigs fly than to see the federal government actually balance its budget by passing a law.  Every Congress and President for the last 28 years promised to balance the budget – often with sincere intent – and failed to balance it.  The last balanced budget was in 1969.  The federal government has run a deficit for 28 consecutive years.


None of our last six Presidents, from Nixon to Clinton, ever signed a balanced budget.  The claim “We don’t need a constitutional amendment: we just need willpower” rings hollow while the debt mounts higher.  For one year (fiscal year 1996), Congress actually forced the President to cut total “discretionary” (non-automatic) spending below the previous year’s total.  Then major news media and powerful interest groups viciously attacked the effort to control spending.  The political pain became too great, and spending rose again.  Without a Balanced Budget Amendment, intestinal fortitude was temporary.


The promise “Trust us; we’ll balance it” sounds like the drug addict’s plea: “Don’t take away my fix; I’ve reformed; I’ll quit tomorrow!” The American people have heard this promise for 28 years.  We don’t believe it.


What is the actual record of federal laws to require a balance budget?


In 1978, 1979, 1982, 1985, 1987, and 1990, laws to control budgets, spending, and debt were enacted by Congress and signed by the President.  All these laws failed.  All were repealed or were “repealed in effect” by amendments or repeated waivers.


The problem: it is just as easy to repeal or waive a mere law as to pass it.  When the law pinches, it will be changed.  For example, the 1979 law required a balanced budget every year, beginning in 1981.  That law was quietly repealed early in 1981 before it could take effect. 


The Gramm-Rudman-Hollings law promised a balanced budget in 1991.  But gradually, it was weakened, loop-holed, and waived.  Finally, Gramm-Rudman-Hollings was repealed as part of the 1990 budget deal.  Instead of no deficit, the1991 deficit was a record high.


After that shameful performance, anyone who still thinks we can balance the budget by passing more laws must be a believer in the Tooth Fairy and the Easter Bunny.


The late Dean Kleckner, former President of American Farm Bureau Federation, said, “Laws can control people.  Only the Constitution can control government.”


But haven’t the President and Congress agreed to balance the budget by the year 2002?


Yes.  Will this promise be kept?  Maybe —


IF the economy continues to grow for another five years without a recession; and


IF the automatic spending increases for entitlements (two-thirds of the budget) don’t balloon faster than expected; and


IF the President and Congress have the courage in years 2001 and 2002 to control the other one-third of the budget – the non-automatic (“discretionary”) spending.  Their budget deal allows big spending increases in 1998-2000 and then requires holding spending growth below the rate of inflation in 2001 and 2002.  Again, they have postponed the hard decisions.


But even if the budget deal works out as promised, the national debt will grow more than $1 trillion higher – to $6.5 trillion by 2002.


And if a balanced budget actually happens, it won’t last long.  Entitlements spending, already rising rapidly, will skyrocket when the baby-boomers retire.  The entitlement explosion will sharply increase deficits, debt, and federal interest payments.  Our addicted nation will be hooked on debt again, and the debt will spiral into disaster.


The Congressional Budget Office has estimated that by the year 2020, all federal revenue will be eaten up by Social Security, Medicare, Medicaid, and interest on the debt.  By 2050, the CBO has warned, the debt will be higher than the economy could reasonably support.


National bankruptcy is coming – unless a Balanced Budget Constitutional Amendment compels Congress and the President to make the hard decisions.


“Courage and guts . . . we do not have it . . . Nowhere under any statutes have we shown it.  We need some help . . . We need a Balanced Budget Amendment.”
Former Representative Charles Stenholm (D-Texas)


“Why do we not stop fooling ourselves?  Good intentions will not balance the budget.  Statutory requirements have failed time after time.  Unless we make balancing the budget a true constitutional mandate, it will not happen.”
Representative Fred Upton (R-Michigan)


What has gone wrong?  Why can’t Congress and the President control spending without a Constitutional Amendment?


Our good American system of government has been corrupted by three discoveries:


  1. Members of Congress who sincerely want to control spending and debt are unable to do so because a government with unlimited borrowing power operates like a giant credit card.  Each of 100 Senators and 435 Representatives can run up unlimited charges on the national credit card.  The people of his or her state or district – or their children or grandchildren – will have to pay their share of the total bill.   A frugal Senator or Representative will be condemned for “not getting us back our share of the money,” and his or her people will still have to pay for the spending of all the others.  This system rewards spending and penalizes cost savings.  It is a powerful temptation, even for conservative members of Congress.
  1. Organized pressure groups have discovered that they can get more money for their favorite programs by delivering their members’ votes to federal politicians who vote for this increased spending.
  1. Members of Congress have discovered that they can win re-election by voting for every special-interest group that wants money from the public treasury.  They get votes by saying “yes,” not by say “no.”  They don’t have to make voters angry by raising taxes; just borrow the money.  The children who will have to pay this debt can’t vote yet.

This unholy alliance of special interests that want more money and federal politicians who want re-election has twisted American government into something the Founders wouldn’t recognize. The President and Congress borrow money to buy the votes of organized groups.


The special interests win.  The American people – especially our children and grandchildren –lose as we sink deeper into debt.  Only a Constitutional Amendment can restore our American government to what the Founders intended.




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