On May 13, the House Judiciary Subcommittee on the Constitution held a hearing on amending the U.S. Constitution to require a balanced federal budget. Chairman Trent Franks (R-AZ) began the hearing by stating that a balanced budget should become the norm for the federal government.
Ranking Member Jerrold Nadler (D-NY) countered that such a constitutional amendment would mean catastrophic results for the nation. Mr. Nadler said that a balanced budget amendment would allow members to avoid making hard choices over what to fund. Mr. Nadler also pointed out that a balanced budget amendment that calls for balancing the budget by 2016 would contradict the House-passed budget resolution, which projects balancing the budget by 2040.
Three witnesses argued in favor of a balanced budget amendment, saying it is necessary to have external pressure on Congress to enforce the need for a balanced budget. Representative Bob Goodlatte (R-VA) argued that the committee should consider one of the two resolutions that he introduced at the beginning of the congressional session, H.J. Res. 1 or H.J. Res. 2. The latter is the same text of a balanced budget amendment that passed the House in 1995 and failed in the Senate by one vote. H.J. Res. 1 would require a 3/5 majority vote to raise taxes as would H.J. Res. 2, but would also impose an annual spending cap set at 20% of gross domestic product.
David Primo of the University of Rochester spoke in support of a balanced budget amendment but said that such an amendment must treat all types of spending equally in order to be effective. Andrew Moylan of the National Taxpayers Union supported a balanced budget amendment because the federal government has not had a balanced budget for 44 of the last 50 years and that a constitutional requirement would break this pattern.
Bob Greenstein of the Center on Budget and Policy Priorities argued
that a balanced budget amendment would undermine the stabilizing force
of the federal government during economic downturns. Particularly during
an economic downturn, Mr. Greenstein said, a constitutional balanced
budget amendment would inhibit the government’s ability to respond
because a minority in Congress could hold hostage for other political
purposes the required 3/5 vote to override such an amendment. Such an
amendment could interfere with what Mr. Greenstein referred to as the
government’s automatic stabilizers and well as the Federal Reserve and