July 21 (Bloomberg) -- A late entrant in the budget deficit-debt ceiling talkathon in Washington is increasing support for a constitutional requirement that the federal budget be balanced every year. Liberals will no doubt characterize this proposal as a nutty one, but careful scrutiny of such an amendment to our constitution demonstrates its potential to prevent future train wrecks in the budgeting process.
Constitutional budget-balancing requirements are already available to most governors and state legislatures, along with a line-item veto and separate capital budgeting, which differentiates investments from current outlays. They work.
Any debate in Congress will probably include the following arguments against a balanced-budget amendment:
First, that the amendment would clutter our basic document in a way contrary to the intention of the Founding Fathers. This is clearly wrong. The framers of the Constitution contemplated that amendments would be necessary to keep it abreast of the times. It has, in fact, been amended 27 times.
Moreover, at the time of the Constitutional Convention, one of the major preoccupations was how to liquidate the post-Revolutionary War debts of the states. It would have been unthinkable to the framers that the federal government would systematically run a deficit, decade after decade. The Treasury didn’t begin to follow such a practice until the mid-1930s.
No Overnight Fix
Second, critics will argue that the adoption of a balanced-budget amendment wouldn’t solve the deficit problem overnight. This is absolutely correct, but begs the issue. Serious supporters of the amendment recognize that a phasing-in of five to 10 years would be required.
During this interim period, however, budget makers would have to meet declining deficit targets in order to reach a final balanced budget by the established deadline.
As pointed out by former Commerce Secretary Peter G. Peterson, such “steady progress toward eliminating the deficit will maintain investor confidence, keep long-term interest rates headed down and keep our economy growing.”
Third, it will be argued that such an amendment would require vast cuts in social services, entitlements and defense spending. Not necessarily. True, these programs would have to be paid for on a current basis rather than heaped on the backs of future generations. Difficult choices would have to be made about priorities and program funding. But the very purpose of the amendment is to discipline the executive and legislative branches, not to propose or perpetuate vast spending programs without providing the revenue to fund them.
The amendment would, in effect, make the president and Congress fully accountable for their spending and taxing decisions.
Fourth, critics will say that a balanced-budget amendment would prevent or hinder our capacity to respond to national defense or economic emergencies. This concern is easy to counter. Clearly, any sensible amendment proposal would feature a safety valve to exempt deficits incurred in response to emergencies, requiring, for example, a three-fifths majority in both houses of Congress. Such action should, of course, be based on a finding that such an emergency actually exists.
Fifth, it will be said that a balanced-budget amendment might be easily circumvented. The experience of the states suggests otherwise. Balanced-budget requirements are now in effect in all but one (Vermont) of the 50 states and have served them well.
Moreover, the line-item veto, available to 43 governors, would ensure that congressional overruns -- or loophole end runs -- could be rejected by the president. The public’s opposition, the elective process and the courts would also restrain any tendency to ignore a constitutional directive.
In the final analysis, most of the excuses for not enacting a constitutional mandate to balance the budget rest on a stated or implied preference for solving our deficit dilemma through the political process -- that is to say, through responsible action by the president and Congress.
But that has been tried and found wanting, again and again.
Surely the U.S. is ready for a simple, clear and supreme directive that compels elected officials to fulfill their fiscal responsibilities. A constitutional amendment is the only instrument that will meet this need. Years of experience at the state level argue in favor of such a step. Years of debate have produced no persuasive arguments against it.
The stakes are high. Perhaps Thomas Jefferson put it best: “To preserve our independence, we must not let our rulers load us down with perpetual debt.”
That is the aim of a balanced-budget amendment. Reform-minded members of Congress should support such an amendment to our Constitution as a means of resolving future legislative crises and ending credit-card government once and for all.
A nutty idea? Not by a long shot.
(Dick Thornburgh, former U.S. Attorney General and two-term governor of Pennsylvania, is counsel to the international law firm of K&L Gates LLP. The opinions expressed are his own.)
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