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Debating The Balanced Budget Amendment

By Professor Melvin Dubnick
Academic Editor
PoliticsNow Classroom, Feb. 17, 1997

To the uninitiated, the debate over balancing the federal budget seems simple: you're either for or against doing it!

Students of American government who carefully follow the debate are not certain the positions on this important issue are so clear cut. The problem starts when they try to determine exactly what one means by "balancing the budget." Are we talking about a budget balancing policy (BBP) involving some combination of fiscal and monetary strategies intended to minimize federal budget surpluses by fiscal year 2002 or some other date? Or is our focus on passing a balanced budget amendment (BBA) to the Constitution that mandates Congress take whatever steps are necessary to make certain expenditures do not exceed revenues for the federal government in any given year?

Complicating things a bit more is the fact that the positions taken on these two distinct issues are no mutually exclusive. Among those who favor BBP approaches are some who support the balanced budget amendment and others who oppose it--and vice versa!

Seem confusing? Let's put some names and faces on the various positions:

  • Position One: Favors both BBP and BBA: Here is the position well staked out by the congressional GOP, whose leaders are responsible for moving the balanced budget amendment to the top of the Senate agenda. For them, the BBA is as critical--if not more--to achieving and sustaining a long-term balanced budget strategy for the United States.

  • Position Two: For BBP, Against BBA: This is the position held by President Clinton and pursued adamantly by Treasury Secretary Rubin. In this camp-- and the White House is quick to tell anyone who will listen--and the nation's top economists as well as many influential Wall Street types, including the editorial writers at the Wall Street Journal. Balancing the federal budget is a very high priority for them, but they foresee grave consequences in a BBA approach that eliminates government's economic policy flexibility in the future. Also in this camp are those who argue the constitutional point that such an amendment might shift ultimate budgetary decision authority into the "least representative branch"--the courts.

  • Position Three: Against both BBP and BBA: Typically associated with those who unashamedly continue to pursue the New Deal/Great Society "liberal" agenda, this position points to dangers in reverting to anachronistic and arbitrary economic policies of the past. For them, an amendment would threaten all that has been achieved economically and socially over the past 60 years. Further, they regard the current efforts to balance the budget wrongheaded and inappropriate given existing economic circumstances. We need more government spending, they argue, not less. If anything should be changed, it is our current spending priorities. Spend more on children and job training, they say, and less on corporate welfare and an oversized defense establishment.

  • Position Four: Against a BBP and for a BBA: How can someone argue for the balanced budget amendment and against a balanced budget policy? Not a problem for the folks at the libertarian CATO Institute who believe that a constitutional amendment is a necessary start in an effort to reduce the size of government. From their perspective, however, it would be wrong to give priority a balanced budget strategy that maintains high levels of government spending. Instead, priority must be given to an overall shrinking of the federal government .

To help us better understand the complexities and controversies surrounding the efforts to balance the budget, we have invited three well known and well respected policy commentators to join in a week long discussion of this vital national issue.


The Participants

Richard Lamm, former three-term Democratic governor of Colorado, opposed Ross Perot for the Reform Party's presidential nomination in 1996, making his key issues balancing the budget, campaign reform and illegal immigration. Lamm has served as Director of the Center for Public Policy and Contemporary Issues at the University of Denver since its founding in 1987.

Tim Penny served six terms as a Democratic congressman from southeastern Minnesota before declining to seek reelection in 1994, saying he was frustrated with the culture of Congress. Currently a senior fellow at University of Minnesota's Hubert H. Humphrey Institute, he is a widely recognized advocate of fiscal responsibility and a board member of the bipartisan Concord Coalition.

Karen Paget, a political scientist with extensive political and government experience, currently is a consultant to the Twentieth Century Fund's Balanced Budget Project and a contributing editor to The American Prospect, where her article "The Balanced Budget Trap" appeared in the November-December 1996 issue. Co-author of Running As A Woman: Gender and Power in American Politics, she also has lectured on women and politics in Taipei, Seoul, Rome and Copenhagen in the last two years.