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What It Is: The Balanced Budget Amendment does pretty much exactly what it says - it's a Constitutional amendment that would require the government to pass budgets that spend only as much (or, sometimes, only slightly more) as the money they earn. There would be an exception included to allow extra spending in times of war. Currently, budgets can spend more money than the government has or is earning, and have frequently done so over the last several years. The amendment would first be presented in Congress, then sent to the states. If 3/4 of the States approve the amendment, then it will be added to the Constitution.
Why It Matters: Our country has a LOT of debt. Additionally, our country is generating more every year. As we've seen during the recent debt crisis negotiations, many people think that this policy of spending more than we earn needs to end. During the debt ceiling negotiations, Speaker of the House John Boehner has made sure that any resolution to the debt crisis will involve some sort of vote on a balanced budget amendment, probably similar to HJR 2 presented by Virginia's Bob Goodlatte.
Why It Rocks:
- Borrowing too much money puts our country's credit at risk. Just like you'd get in trouble for skipping out on your credit cards or student loans, the U.S. would face severe economic damage if it can't pay its bills.
- Balanced budget amendments exist elsewhere and have generally seemed to work. Every state but Vemont currently has some kind of balanced budget provision, and their economies... OK, bad example. But if you look at a national level, Germany has a balanced budget provision and has been one of the few European countries to effectively weather the recent economic downturn.
- Legislators would have to think about where the money they spend will come from. This may come as a shock, but our government is frequently inefficient. Under a balanced budget amendment, new programs require either new revenue or less spending, which makes it harder to create frivolous expenditures.
Why It Sucks:
- Legislators would have to think about where the money they spend will come from. We won't have as much flexibility in how we spend our money because every new expenditure must be balanced out in the budget. While this generally won't apply to emergency spending, it could choke out smaller programs that are still very important to many people (National Endowment for the Arts) or more controversial programs (Planned Parenthood).
- Borrowing money can help spark the economy, depending on who you ask. The Keynesian school of economic thought believes, more or less, that spending more money in government generates more money in the economy. When we enter a recession, Keynesians think the government should spend more than it earns to get more citizens working and earning money so that the economy can restart. Its sort of jumper cables for the economic car, if jumper cables cost billions of dollars.
- An amendment means that any budget that isn't balanced, moving forward, would be unconstitutional - so it would have to be struck down in the courts. This seems like it should be pretty straightforward - there's either a balanced budget or there's not, it's math - but because of the war clause, things get complicated. The amendment would allow for unbalanced budgets in times of iminent military conflict, but what exactly is imminent? Courts would have to decide, which would bring the Judicial branch into the budgeting process, which messes with that whole checks and balances thing the Constitution started out with.
SumOlogy: The balanced budget amendment has some proven track record and makes sense when things are operating normally. However, it could also choke out smaller programs and change the checks and balances of our government.
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