The idea of amending the Constitution to require the federal government to balance its budget has been an active issue for many years. In 1995 the House of Representatives passed a resolution to forward such an amendment to the states for ratification. A similar resolution failed, by one vote, to obtain the necessary two-thirds majority in the Senate. The Republicans, who will have a larger majority in the Senate in 1997 than they did in 1995, promise to bring the issue up again, and a vigorous debate can be expected. The federal government is now closer to reaching a balanced budget than at any time in many years. That fact may put a new twist on traditional arguments about the amendment proposal.
The issue is sometimes framed as whether balancing the budget is a good rule of fiscal policy, or whether it is the best of all possible rules. More realistically, the issue is whether the results--under a constitutional amendment, with all the imperfections that can be foreseen--would be better or worse than the results without the amendment, with all the imperfections we know about.
Proposed balanced-budget amendments come in various forms. Some would require balancing the budget while excluding Social Security trust accounts, and some would not make that exclusion. Some would, and some would not, place additional restrictions on the power of Congress to raise taxes. All would permit exceptions from the balanced-budget rule in some emergencies, but different proposals vary in which kind of emergencies would be recognized. For some people, support or opposition to the amendment depends heavily on which of these particular provisions are included.
We have this week an especially able and distinguished group of panelists to discuss the issues that revolve around the idea of a balanced-budget amendment.