Why the Balanced Budget Amendment Must Be Stopped

Currently, Washington Republicans are mulling over two versions of a Balanced Budget Amendment.  One, sponsored by Sens. Orrin Hatch and John Cornyn, would limit government spending to 20% of GDP and require a balanced budget (i.e., without a deficit) five years after the amendment is ratified.  The version introduced by Sen. Mike Lee would be similar, but it would limit government spending to 18% of GDP, the lowest in decades.

Both versions, however, are fundamentally flawed and therefore utterly unacceptable.  Let me explain.

Firstly, and most worryingly, both proposed amendments would effectively undo all the limitations on the federal government currently listed in the Constitution.  Goodbye to the principle of enumerated prerogatives, the nondelegation doctrine, and the 9th and 10th Amendments.  Both versions would effectively mean that the federal government will be allowed to meddle with, legislate on, and spend money on anything, as long as its total annual spending doesn't exceed 18% or 20% of GDP (whose estimates it could falsify to justify higher spending).

This would allow the Congress to legislate on whatever it wants to regulate and spend vast sums of money on programs that should be reserved to the states.  And guaranteeing this beast -- the federal government -- even 18% of GDP is obscene.  It is not a limited government policy.

There would never have been any budget deficit if the Congress were spending money only on those agencies and programs authorized by the Constitution (vide Article I, Sec. 8).  Therefore, the BBA is not needed.

The Departments of Education, Agriculture, HUD, Transportation, and Commerce are patently unconstitutional, as is the EPA, the SBA, the DHHS, all three big entitlement programs, subsidies for anything (including agriculture), the Davis-Bacon Act, the Sarbanes-Oxley Act, the  War on Drugs, the cap-and-tax scheme, CAFE standards, renewable energy standards, ethanol production obligations, executive regulations of the economy, and all congressional and presidential drilling bans and drilling moratoriums.  The Constitution does not authorize any of these things; all of the issues they pertain to are reserved by the 10th Amendment to the states and the people.

Unfortunately, instead of abolishing these agencies, programs, and regulations, most congressional Republicans are advertising the useless, unneeded BBA, which would serve as a mere figleaf.  Only one GOP senator, Rand Paul, has proposed to abolish at least some of the above-mentioned unconstitutional agencies.

And this is actually the only way to balance the federal budget.

But even Senator Paul has proposed to cut federal spending by only $500 billion and to eventually bring it back to $3.5 trillion by FY2016.

Speaking of the federal budget, it needs to be underlined that the BBA is not a magic wand.  Even if it's passed and ratified, it will not automatically balance the budget.  It will merely oblige the Congress to pass a balance budget -- but the Congress will still have to determine how to erase the budget deficit.  So the usual budget battles over whether to raise taxes (which can be done with a 66% supermajority under the BBA) or cut spending, and what spending to cut, and by how much, would still rage on.

So either way, there's no way to avoid budget cuts.  The budget deficit for FY2011 is projected to be $1.65 trillion.  You can't balance it solely with tax hikes or revenue from a rebounding economy (if it rebounds, which is the risky bet on which Sen. Paul's balanced budget plan is based).

You have to abolish the agencies and programs listed above.

Thirdly, the BBA is not an absolute requirement.  The Congress will be able to waive it and claim a national emergency due to "war" or some other hardship and pass another budget with a huge budget deficit.  Currently, America is waging two (arguably three) wars, so the Congress could claim an easy excuse.

Fourthly, the BBA would, as mentioned above, allow the Congress to raise your taxes by a supermajority, and to raise the debt limit by a three-fifths majority.  So it cannot protect you against tax hikes or debt limit hikes.  Politicians could claim any excuse to raise taxes or the debt limit (as they've done numerous times).  The BBA would ratify the Beltway status quo.

Finally, the spending limit included in the BBA does not compel any entitlement reform.  And even if the Congress adopts the higher spending limit (20% of GDP), entitlements, which already constitute 56% of the total federal budget (and thus dwarf everything else, including the entire discretionary budget), will eat up an ever-larger share of the federal budget (and eventually the entire federal budget) at the cost of everything else, including legitimate functions of the federal government.  All this absent radical entitlement reform, which is politically unfeasible right now.

To sum up, the BBA is bad news.  It would eliminate all current constitutional limitations of the federal government, provide cover for the Congress to hike taxes and the debt limit, guarantee up to 20% of GDP to the federal government, and still fail to balance the budget, because the Congress could waive the Amendment's provisions under the most banal pretext.

There is only one way to balance the budget: set priorities for the federal government, defend them firmly, and dispense with everything that is unnecessary or unconstitutional.
Currently, Washington Republicans are mulling over two versions of a Balanced Budget Amendment.  One, sponsored by Sens. Orrin Hatch and John Cornyn, would limit government spending to 20% of GDP and require a balanced budget (i.e., without a deficit) five years after the amendment is ratified.  The version introduced by Sen. Mike Lee would be similar, but it would limit government spending to 18% of GDP, the lowest in decades.

Both versions, however, are fundamentally flawed and therefore utterly unacceptable.  Let me explain.

Firstly, and most worryingly, both proposed amendments would effectively undo all the limitations on the federal government currently listed in the Constitution.  Goodbye to the principle of enumerated prerogatives, the nondelegation doctrine, and the 9th and 10th Amendments.  Both versions would effectively mean that the federal government will be allowed to meddle with, legislate on, and spend money on anything, as long as its total annual spending doesn't exceed 18% or 20% of GDP (whose estimates it could falsify to justify higher spending).

This would allow the Congress to legislate on whatever it wants to regulate and spend vast sums of money on programs that should be reserved to the states.  And guaranteeing this beast -- the federal government -- even 18% of GDP is obscene.  It is not a limited government policy.

There would never have been any budget deficit if the Congress were spending money only on those agencies and programs authorized by the Constitution (vide Article I, Sec. 8).  Therefore, the BBA is not needed.

The Departments of Education, Agriculture, HUD, Transportation, and Commerce are patently unconstitutional, as is the EPA, the SBA, the DHHS, all three big entitlement programs, subsidies for anything (including agriculture), the Davis-Bacon Act, the Sarbanes-Oxley Act, the  War on Drugs, the cap-and-tax scheme, CAFE standards, renewable energy standards, ethanol production obligations, executive regulations of the economy, and all congressional and presidential drilling bans and drilling moratoriums.  The Constitution does not authorize any of these things; all of the issues they pertain to are reserved by the 10th Amendment to the states and the people.

Unfortunately, instead of abolishing these agencies, programs, and regulations, most congressional Republicans are advertising the useless, unneeded BBA, which would serve as a mere figleaf.  Only one GOP senator, Rand Paul, has proposed to abolish at least some of the above-mentioned unconstitutional agencies.

And this is actually the only way to balance the federal budget.

But even Senator Paul has proposed to cut federal spending by only $500 billion and to eventually bring it back to $3.5 trillion by FY2016.

Speaking of the federal budget, it needs to be underlined that the BBA is not a magic wand.  Even if it's passed and ratified, it will not automatically balance the budget.  It will merely oblige the Congress to pass a balance budget -- but the Congress will still have to determine how to erase the budget deficit.  So the usual budget battles over whether to raise taxes (which can be done with a 66% supermajority under the BBA) or cut spending, and what spending to cut, and by how much, would still rage on.

So either way, there's no way to avoid budget cuts.  The budget deficit for FY2011 is projected to be $1.65 trillion.  You can't balance it solely with tax hikes or revenue from a rebounding economy (if it rebounds, which is the risky bet on which Sen. Paul's balanced budget plan is based).

You have to abolish the agencies and programs listed above.

Thirdly, the BBA is not an absolute requirement.  The Congress will be able to waive it and claim a national emergency due to "war" or some other hardship and pass another budget with a huge budget deficit.  Currently, America is waging two (arguably three) wars, so the Congress could claim an easy excuse.

Fourthly, the BBA would, as mentioned above, allow the Congress to raise your taxes by a supermajority, and to raise the debt limit by a three-fifths majority.  So it cannot protect you against tax hikes or debt limit hikes.  Politicians could claim any excuse to raise taxes or the debt limit (as they've done numerous times).  The BBA would ratify the Beltway status quo.

Finally, the spending limit included in the BBA does not compel any entitlement reform.  And even if the Congress adopts the higher spending limit (20% of GDP), entitlements, which already constitute 56% of the total federal budget (and thus dwarf everything else, including the entire discretionary budget), will eat up an ever-larger share of the federal budget (and eventually the entire federal budget) at the cost of everything else, including legitimate functions of the federal government.  All this absent radical entitlement reform, which is politically unfeasible right now.

To sum up, the BBA is bad news.  It would eliminate all current constitutional limitations of the federal government, provide cover for the Congress to hike taxes and the debt limit, guarantee up to 20% of GDP to the federal government, and still fail to balance the budget, because the Congress could waive the Amendment's provisions under the most banal pretext.

There is only one way to balance the budget: set priorities for the federal government, defend them firmly, and dispense with everything that is unnecessary or unconstitutional.

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