Tuesday, July 26, 2011

The Balanced Budget Amendment Explained

One of the few redeeming qualities of the Cut, Cap, and Balance Act is that it demands that the Balanced Budget Amendment be passed should the debt ceiling be raised.  Not a good one, considering that there is no provision which states that the Balanced Budget Amendment has to be enacted in order for the debt ceiling to be raised.  They could just raise the debt ceiling and forget about the amendment itself.

In any case, there seems to be a lot of ignorance with regards to this proposed amendment where people are wondering about times of war and whether there is a loophole in it and other things of that nature.  Let me lay it out here and highlight the implications of this amendment, should it be passed and should Congress and the President adhere to it:

    `Section 1. Total outlays for any fiscal year shall not exceed total receipts for that fiscal year, unless three-fifths of the whole number of each House of Congress shall provide by law for a specific excess of outlays over receipts by a rollcall vote.
    `Section 2. The limit on the debt of the United States held by the public shall not be increased, unless three-fifths of the whole number of each House shall provide by law for such an increase by a rollcall vote.
    `Section 3. Prior to each fiscal year, the President shall transmit to the Congress a proposed budget for the United States Government for that fiscal year in which total outlays do not exceed total receipts.
    `Section 4. No bill to increase revenue shall become law unless approved by a majority of the whole number of each House by a rollcall vote.
    `Section 5. The Congress may waive the provisions of this article for any fiscal year in which a declaration of war is in effect. The provisions of this article may be waived for any fiscal year in which the United States is engaged in military conflict which causes an imminent and serious military threat to national security and is so declared by a joint resolution, adopted by a majority of the whole number of each House, which becomes law.
    `Section 6. The Congress shall enforce and implement this article by appropriate legislation, which may rely on estimates of outlays and receipts.
    `Section 7. Total receipts shall include all receipts of the United States Government except those derived from borrowing. Total outlays shall include all outlays of the United States Government except for those for repayment of debt principal.
    `Section 8. This article shall take effect beginning with the later of the second fiscal year beginning after its ratification or the first fiscal year beginning after December 31, 2016.'.

This a lengthy amendment to the United States Constitution, probably the longest one to be introduced.  The amendment addresses Congress specifically and lays out some ground rules for the Federal budget process, which is required to be done each by the procedure laid out in the Constitution.  On a side note, I wonder if we could declare all Federal government actions for the fiscal year as null and illegal given that they do not have a budget to do any of it.

Anyway, the amendment first and foremost requires that all spending matches all taxation (I refuse to use the term ‘revenue’ because government does not make money; it steals it).  There is an exception in the first section where three-fifths of both Houses can vote to go over projected taxation income.  In other words, there is already a loophole for increasing spending and one that is perfectly doable.  While it would probably require a large amount of compromise, given the current state of politics here in the United States, I firmly believe that this loophole would be used on a regular basis.

The second section address the debt ceiling and states that it cannot be raised without three-fifths majority of both Houses.  I like this aspect of the amendment as well, since it requires an extra majority (not a simple one nor is it a super one) to raise the debt ceiling.  Again, it would require no small amount of compromise.

The next two sections deal with common sense in the budgetary process.  The President is now required to present a balanced budget instead of one that borrows money.  Congress can then choose to borrow money, given its requirements.   The fourth section requires a simple majority of all members of Congress to raise taxes.

The fifth section is one I find interesting.  It basically says that as long as there is a declaration of war, then Congress can ignore the extra-majority constraints placed on them and have an unbalanced budget.  The implications are great because it now places Congress on the hot seat for managing the budgetary requirements of war and demands that they actually declare war instead of allowing the President to simple bomb whoever he damn well pleases.  Remember that we have not had a constitutional war since World War II since Congress has not been in the business of declaring war for the last six and a half decades.  Unfortunately, I think that Congress would ignore this important piece, even if the amendment was passed.

The next two are just some formal sections that need to exist.  The first authorizes Congress to set up rules in order implement the amendment and the second one just states that borrowed money is not considered income in order to ensure that no sleazy Congressperson, of which there are many, can get around this amendment by saying that borrowed money is revenue.

The final section bothers me.  It is clear that if this amendment were passed, it would not take effect until any possibility of Barack Obama being President has passed as well.  This means that we are going to have to deal with the spending extravagancies of the man-child President anyway.  Change this part to make it active on the next fiscal year after it is ratified by the States and I think that will make all the difference.

Granted, this amendment does not matter even if ratified should Congress and the President conspire, as they normally do, to ignore the restraints in the United States Constitution.  However, at least it will be codified into law and it will give ample intellectual fuel for people who wish to take a serious stand against government tyranny and extravagance.

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