(PDF provides a complete and accurate display of this text.)
Calendar No. 16
104th Congress Report
1st Session 104-5
BALANCED-BUDGET CONSTITUTIONAL AMENDMENT
January 24 (legislative day, January 10), 1995.--Ordered to be printed
Mr. Hatch, from the Committee on the Judiciary, submitted the following
R E P O R T
ADDITIONAL, MINORITY, AND SUPPLEMENTAL VIEWS
[To accompany S.J. Res. 1]
The Committee on the Judiciary, to which was referred the
bill (S.J. Res. 1) to propose an amendment to the Constitution
relating to a Federal balanced budget, having considered the
same, reports favorably thereon, and recommends that the bill
II. Legislative history..............................................3
IV. Votes of the committee..........................................12
V. Text of S.J. Res. 1.............................................14
VI. Section-by-section analysis.....................................15
VII. Cost estimate...................................................20
Regulatory impact statement.....................................23
IX. Additional views of Mr. Kyl.....................................24
X. Additional views of Mr. Biden...................................26
XI. Minority views of Messrs. Kennedy, Leahy, and Feingold..........31
XII. Supplemental minority views of Mr. Leahy........................60
XII. Additional views of Mr. Heflin..................................70
XIV. Minority views of Mr. Feingold..................................74
XV. Changes in existing law.........................................76
The Balanced-Budget Constitutional Amendment sets forth, in
the Nation's governing document, the basic principle that the
Federal Government must not spend beyond its means. This
principle, Thomas Jefferson once said, is of such importance
``as to place it among the fundamental principles of
government. We should consider ourselves unauthorized to saddle
posterity with our debts, and morally bound to pay them
ourselves.'' Thomas Jefferson's words ring true today. The
discipline imposed by a balanced-budget amendment may be the
only way to avoid leaving future generations of Americans with
an overwhelming legacy of debt.
The notion of a limitation of the Government's budgetary
authority by a governing document is deeply rooted in our
traditions; it is a notion which goes back as far as the Magna
Carta. Our predecessors were entirely aware of these traditions
when they said:
The public debt is the greatest of dangers to be
feared by a republican government.
Once the budget is balanced and the debts paid off,
our population will be relieved from a considerable
portion of its present burdens and will find * * *
additional means for the display of individual
The first statement was made by Thomas Jefferson and the second
by Andrew Jackson.
These two quotations illustrate an important truth: No
concept is more a part of traditional American fiscal policy
than that of the balanced budget. In fact, Jefferson himself
wished the Constitution had included a prohibition on
government borrowing because he thought that one generation
should not be able to obligate the next generation.
James Madison, in explaining the theory undergirding the
Government he helped create, had this to say about governments
and human nature:
Government [is] the greatest of all reflections on
human nature. If men were angels, no government would
be necessary. If angels were to govern men, neither
external or internal controls on government would be
necessary. In framing a government that is to be
administered by men over men, the great difficulty lies
in this: You must first enable the government to
control the governed; and in the next place oblige it
to control itself. A dependence on the people is no
doubt the primary control on government; but experience
has taught mankind the necessity of auxiliary
[Federalist No. 51.]
The Balanced-Budget Amendment is an additional ``auxiliary
precaution'' which helps restore two important elements in the
constitutional structure: limited government and an accountable
deliberative legislative assembly, both of which are vital to a
free and vibrant constitutional democracy.
A deliberative assembly, the essence of whose authority is,
in Alexander Hamilton's words, ``to enact laws, or in other
words to prescribe rules for the regulation of society'' for
the common good, was considered by the Framers of the
Constitution the most important branch of government because it
reflected the will of the people. Yet, as the maker of laws, it
was also considered the most powerful and the one that needed
to be guarded against the most.
Recognizing that ``[in] republican government the
legislative authority, necessarily, predominates'' and to
prevent ``elective despotism,'' James Madison, the ``Father of
the Constitution,'' recommended that the Philadelphia
Convention adopt devices in the Constitution that would
safeguard liberty. These include: bicameralism, separation of
powers and checks and balances, a qualified Executive veto,
limiting congressional authority through enumerating its
powers, and, of course, the election of legislators to assure
accountability to the people.
However, in the late twentieth century, these
constitutional processes, what Madison termed ``auxiliary
precautions,'' have failed to limit the voracious appetite of
Congress to legislate into every area of private concern, to
invade the traditional bailiwick of the States, and,
consequently, to spend and spend to fund these measures until
the Federal Government has become functionally insolvent and
the economy placed in jeopardy.
The Balanced-Budget Amendment will go a long way toward
ameliorating this problem. It will create an additional
constitutional process--an ``auxiliary precaution''--that will
bring back legislative accountability to the constitutional
system. The Balanced-Budget Amendment process accomplishes this
by making Federal deficit spending significantly more
II. Legislative History
In 1936, Representative Harold Knutson of Minnesota
proposed the first constitutional amendment to balance the
budget (H.J. Res. 579, 74th Cong.). This proposal would have
established a per capita limitation on the Federal public debt.
Since that time, numerous constitutional provisions have been
proposed to require a balanced budget.
S.J. Res. 1 derives from work begun in the Senate Judiciary
Subcommittee on the Constitution in the 96th Congress.
Throughout 1979 and early 1980, the subcommittee held a series
of hearings across the country--eight in total--on the subject
of a balanced-budget amendment. Senators Hatch, Thurmond,
DeConcini, Heflin, and Simpson introduced S.J. Res. 126, which
was reported out of the subcommittee on December 18, 1979, by a
vote of 5 to 2. On March 15, 1980, the full Committee on the
Judiciary defeated S.J. Res. 126 by a vote of 9 to 8.
The same principal sponsors reintroduced S.J. Res. 126 in
the 97th Congress as S.J. Res. 58. During the early part of
1981, the subcommittee held four additional days of hearings.
On May 6, 1981, the subcommittee voted 4 to 0 to report out the
amendment, but only after adopting an amendment in the nature
of a substitute offered by Senator Hatch. On May 19, 1981, the
full Committee on the Judiciary favorably reported S.J. Res. 58
by an 11-to-5 vote.
On July 12, 1982, the Senate began consideration of S.J.
Res. 58. On August 4, 1982, following the adoption of a package
of amendments by Senators Domenici and Chiles and the
acceptance of an amendment by Senators Armstrong and Boren, the
Senate passed S.J. Res. 58 by a 69-to-31 vote. This marked the
first time either House of Congress had approved such a
On October 1, 1982, following a successful discharge
petition effort, the House of Representatives considered H.J.
Res. 350, the House counterpart to S.J. Res. 58. Although a
substantial majority of the House voted in favor of the
amendment, the 236-to-187 margin fell short of the necessary
In the 98th Congress, the Subcommittee on the Constitution
held 2 days of hearings on S.J. Res. 5. On March 15, 1984, the
subcommittee approved S.J. Res. 5 by a 4-to-1 vote and referred
the measure to the full committee. On September 13, 1984,
following the adoption of an amendment offered by Senator
DeConcini, the full Committee on the Judiciary approved S.J.
Res. 5 by a vote of 11 to 4. However, the full Senate did not
vote on the measure before the 98th Congress came to a close.
S.J. Res. 13 was introduced by Senator Thurmond on the
first day of the 99th Congress. Following a hearing, the
Subcommittee on the Constitution held a markup of S.J. Res. 13
on May 15, 1985, at which the subcommittee adopted an amendment
in the nature of a substitute offered by Senator Thurmond, and
then approved S.J. Res. 13, as amended, by a unanimous 5-to-0
vote. After considering S.J. Res. 13 during May, June, and
July, the full Judiciary Committee reported it favorably on
July 11, 1985, by a vote of 11 to 7. At the same time, the
committee approved S.J. Res. 225, a simplified proposed
amendment introduced by Senators Thurmond, Hatch, DeConcini,
and Simon, by a vote of 14 to 4.
On March 25, 1986, the Senate defeated S.J. Res. 225 by a
vote of 66 to 34, thus failing to achieve the constitutional
two-thirds requirement by a single vote.
In the 100th Congress, the Subcommittee on the Constitution
held hearings on S.J. Res. 11, S.J. Res. 112, and S.J. Res.
116, on March 23, 1988. On May 25, 1988, the subcommittee
approved S.J. Res. 11, with an amendment in the nature of a
substitute, by a vote of 3 to 2, and reported the measure to
the full Committee on the Judiciary. The committee considered
S.J. Res. 11 in a markup session on August 10, 1988, but no
action was taken.
In the 101st Congress, the Subcommittee on the Constitution
held hearings on S.J. Res. 2, S.J. Res. 9, and S.J. Res. 12 on
July 27, 1989. On the same day, Senator Simon introduced, and
the subcommittee approved, S.J. Res. 183, which incorporated
ideas from each of the other three bills. By a vote of 4 to 2,
the subcommittee reported S.J. Res. 183 to the full Committee
on the Judiciary.
On June 14, 1990, the committee accepted an amendment in
the nature of a substitute offered by Senators Simon, Thurmond,
DeConcini, Hatch, and Heflin, and then approved S.J. Res. 183,
as amended, by a vote of 11 to 3.
Following a successful discharge petition effort, the House
of Representatives considered H.J. Res. 268, the House
counterpart to S.J. Res. 183, on July 17, 1990. The House fell
seven votes short of the two-thirds majority required to
approve the constitutional amendment, failing by a vote of 279
to 150. S.J. Res. 183 did not come before the full Senate for
consideration in the 101st Congress.
In the 102d Congress, S.J. Res. 18 was introduced by
Senator Simon on January 14, 1991. The measure, identical to
the bill reported out of the full committee in the previous
Congress, was originally sponsored by Senators Thurmond,
DeConcini, Hatch, Heflin, Simpson, and Grassley. Senator
Specter also became a cosponsor.
The Subcommittee on the Constitution reported S.J. Res. 18
favorably to the full committee on the Judiciary by a vote of 4
to 2, on March 8, 1991. S.J. Res. 5, a similar measure
introduced by Senator Specter, was also reported out.
On May 23, 1991, the committee adopted, by a vote of 10 to
4, an amendment to S.J. Res. 18 offered by Senator Heflin
regarding military conflict. The committee then approved S.J.
Res. 18, as amended, by a vote of 11 to 3. S.J. Res. 5, amended
to include a three-fifths vote requirement for tax increases,
was defeated by a vote of 6 to 8.
On June 9, 1992, after a series of procedural votes, the
House of Representatives took up H.J. Res. 290, a balanced-
budget proposal introduced by Representative Stenholm. After
extensive negotiations among key House and Senate sponsors, a
bicameral, bipartisan, consensus version of the bill was
submitted as a substitute amendment. On final passage, the vote
in favor of the amendment was 280 to 153, nine votes short of
the two-third necessary for adoption. Following this defeat,
Senate leaders stated that they would not call up S.J. Res. 18
before the full Senate. Accordingly, the Senate did not vote on
S.J. Res. 18 during the 102d Congress.
S.J. Res. 41 was introduced into the 103d Congress by
Senators Simon and Hatch on February 4, 1993. The measure was
virtually identical to the bicameral consensus proposal
hammered out during the summer of 1992. Twenty-one Senators
joined Senator Simon and Senator Hatch as original sponsors,
including Senators DeConcini, Thurmond, Heflin, Craig, Moseley-
Braun, Grassley, Kohl, Brown, Daschle, Cohen, Bryan, Pressler,
Shelby, Bennett, Mathews, Smith, Campbell, Kempthorne, Graham,
Nickles, and Lugar. In addition, Senators Murkowski, Gregg,
Chafee, Feinstein, Warner, Simpson, Robb, Boren, Bingaman,
Jeffords, and Roth subsequently joined as cosponsors.
On March 16, 1993, hearings were held on S.J. Res. 41
before the Subcommittee on the Constitution. Soon after the
hearing, the subcommittee reported the measure favorably to the
full committee by a vote of 4 to 2.
On July 22, 1993, the Senate Committee on the Judiciary
approved S.J. Res. 41 by a vote of 15 to 3 [the largest margin
of any balanced-budget amendment yet reported out of the
Committee on the Judiciary].
S.J. Res. 41 was debated on the floor of the Senate from
February 22, 1994, until March 1, 1994. After a resounding
defeat of a substitute amendment offered by Senator Reid, by a
vote of 22 to 78, S.J. Res. 41 failed to be adopted by only
four votes, 63 to 37.
S.J. Res. 1 was introduced into the 104th Congress by
Senate Majority Leader Robert Dole, on behalf of the primary
sponsors Senator Orrin G. Hatch, the new chairman of the Senate
Judiciary Committee, and Senator Paul Simon, as the first joint
resolution of the new Congress, on the first day of the 104th
Congress, January 4, 1995. The measure was again virtually
identical to the bicameral consensus proposal hammered out
during the summer of 1992. Thirty-nine Senators joined Senators
Dole, Hatch, and Simon as original sponsors, including Senators
Thurmond, Heflin, Craig, Moseley-Braun, Brown, Kohl, Simpson,
Grassley, Specter, Kyl, Feinstein, Nickles, Murkowski, Bryan,
Hutchison, Exon, Shelby, Campbell, Smith, Cohen, Pressler,
Gregg, Gorton, Ashcroft, Burns, McConnell, Inhofe, Gramm, Lott,
DeWine, Snowe, Roth, Lugar, Bond, Thomas, Coverdell, Santorum,
Grams, and Mack.
On January 5, 1995, Senator Orrin G. Hatch convened and
chaired the first full committee hearings of the Senate
Judiciary Committee in the 104th Congress to consider S.J. Res.
1. In addition to Senators Thurmond, Simon, Heflin, Craig,
Cohen, Feinstein, Kyl, and Snowe, those testifying included
Hon. Griffin Bell, former Attorney General of the United
States; Hon. Alice M. Rivlin, Director, Office of Management
and Budget; Hon. Walter Dellinger, Assistant Attorney General,
Office of Legal Counsel, Department of Justice; Governor
Michael Leavitt, of Utah; Hon. Paul Tsongas, former U.S.
Senator from Massachusetts; Professor David Strauss, University
of Chicago; Hon. William Barr, former Attorney General of the
United States; Hon. Lowell Weicker, former Governor of
Connecticut; Herbert Stein, American Enterprise Institute;
Edward Regan, former New York State Comptroller; Fred Bergsten,
Director, Institute for International Economics; Kenneth Ashby,
Utah Farm Bureau Federation; James Davidson, National Taxpayers
Union; Martin Regalia, U.S. Chamber of Commerce; Alan Morrison,
Public Citizen Litigation Group; Robert J. Myers, former Chief
Actuary, Social Security Administration.
On January 18, 1995, the Senate Committee on the Judiciary
approved S.J. Res. 1 by a vote of 15 to 3.
While Congress has the ability to balance the Federal
budget, it lacks the discipline to make the difficult, but
necessary, decisions. The national debt is now over $4.7
trillion, over three times what it was 10 years ago. Although
persistent deficits threaten the Nation's long-term prosperity,
the Federal Government has shown itself unwilling or unable to
act in a fiscally responsible way. The search for popular,
painless ways to limit deficit spending has proved to be
futile. A balanced-budget amendment to the Constitution may be
the only way to provide the fiscal discipline the Nation
dangers of a budget deficit
Influenced by individuals such as Adam Smith, David Hume,
and David Ricardo, the drafters of the Constitution and their
immediate successors at the helm of the new government strongly
feared the effects of public debt. The taxing and borrowing
provisions of the new Constitution reflected a need of the new
Republic to establish credit and governmental notes and
negotiable instruments that would spur commerce.
The Founders and early American Presidents were in virtual
unanimous agreement on the dangers of excessive public debt.
Consequently, for approximately 150 years of our history--from
1789 to 1932--balanced budgets or surplus budgets were the
Indeed, throughout most of the Nation's history, the
requirement of budget balancing under normal economic
circumstances was considered part of what has been called our
Once that unwritten rule was broken, Pandora's Box was
opened. In 1929, Federal expenditures of $3 billion represented
just 3 percent of GNP. By 1950, the Federal share had risen to
16 percent of GDP or about $43 billion. For fiscal year 1993,
Federal Government spending of over $1.4 trillion commanded
nearly 23 percent of GDP.
To illustrate this growth in another way, the first $100
billion budget in the history of the Nation occurred as
recently as fiscal year 1962, more than 179 years after the
founding of the Republic. The first $200 billion budget,
however, followed only 9 years later in fiscal year 1971. The
first $300 billion budget occurred 4 years later in fiscal year
1975; the first $400 billion budget 2 years later in fiscal
year 1977; the first $500 billion budget in fiscal year 1979;
the first $600 billion budget in fiscal year 1981; the first
$700 billion budget in fiscal year 1982; the first $800 billion
budget in fiscal year 1983; the first $900 billion budget in
fiscal year 1985; and the first $1 trillion budget in fiscal
year 1987. The budget for fiscal year 1993 was over $1.4
This tremendous amount of Federal spending does damage to
the economy. By consuming such an overwhelming part of the
capital in the economy, the Government ``crowds out'' private
sector investment. Thus, when government spending rises
unchecked by fiscal responsibility, it chokes off the primary
engines of economic growth and risks our long-term security.
In spite of these dangers, during the past three decades
the Federal Government has run deficits in all but a single
year. The deficits have come during good times, and they have
come during bad times. They have come from Presidents who have
pledged themselves to balanced budgets, and they have come from
Presidents whose fiscal priorities were elsewhere. They have
come from Presidents of both parties. Once Congress began to
engage in deficit spending it started down the path of
sacrificing the long-term health of the economy for short-term
The time has come for a solution strong enough that it
cannot be evaded for short-term gain. We need a constitutional
requirement to balance our budget. S.J. Res. 1, the Balanced-
Budget Amendment, is that solution.
interest on national debt
Gross interest on the national debt is now the second
largest expenditure in the entire budget--higher than defense
spending. Interest payments are the fastest growing item in the
budget. Up from $75 billion in fiscal year 1980, this year the
Federal Government will spend an estimated $295 billion on
interest, an increase of nearly 400 percent. Even controlling
for inflation, interest payments have grown by over 95 percent
during the past 12 years. By 1995, service on the gross
national debt is projected to surpass Social Security payments
as the single largest government expense.
Every day, the Government throws away over $800 million on
interest payments. None of this money goes toward education,
health care, or the battle against drugs and crime. Spending
more and more on interest leaves fewer and fewer resources to
spend on the goods and services needed to address other,
serious problems facing the Nation.
The money for these payments comes out of the pockets of
taxpayers, primarily middle-income families. These same
families are also burdened by the high interest rates that the
deficit sustains. Furthermore, these payments are going
increasingly overseas, to wealthy investors in other countries.
Critics of the Balanced-Budget Amendment argue that
Congress does not need a constitutional amendment to balance
the budget; Congress can achieve that goal statutorily, right
now, without waiting to ratify a constitutional amendment.
Technically, these arguments are, of course, correct. The
Balanced-Budget Amendment provides no new authority to cut
spending or raise revenues. However, recent efforts have shown
that Congress does not have the will to balance the budget.
The Federal Government has not run a budget surplus in over
25 years; the last one was in 1969. And that is the only time
in 30 years that we have achieved a balanced budget. Enacting
responsible budgets is not easy. While a spending program often
has a particular constituency that strongly supports it, the
general interest in restricting spending is diffuse.
Statutory efforts to balance the budget previously have
failed because it is too easy for Congress simply to change its
mind and rescind its previous declarations. Statutory efforts
are vulnerable to a change of heart or a weakening of resolve.
Deficit reduction targets in such legislation can be
continually changed, and the legislation can be several years
in operation before the budget must be balanced. An amendment
to the Constitution forces the Government to live within its
means. S.J. Res. 1 requires a balanced budget by 2002 or 2
years after the amendment is ratified by the States, whichever
implementation and enforcement
S.J. Res. 1 contains the flexibility that an amendment to
the Constitution must have. It does not prescribe a particular
mechanism that Congress must employ in order to achieve a
balanced budget. Instead it leaves political decisions to the
political system. The amendment is, however, self-enforcing.
Because, historically, it has been easier for Congress to raise
the debt ceiling, rather than reduce spending or raise taxes,
the primary enforcement mechanism of S.J. Res. 1 is section 2,
which requires a three-fifths vote to increase the debt
The amendment contemplates that Congress will execute its
responsibilities under the amendment through the exercise of
its currently existing authority. The Constitution already
empowers Congress with such authority. Section 8 of article I
grants Congress the power ``[t]o make all Laws which shall
be necessary and proper * * *.'' Furthermore, Members of
Congress are required by article VI generally to ``support this
Constitution'' while the President is required by article II,
section 1, clause 7, to ``preserve, protect, and defend the
The committee expects fidelity to the Constitution, as does
the American public. Both the President and Members of Congress
swear an oath to uphold the Constitution, including any
amendments thereto. Honoring this pledge requires respecting
the provisions of the proposed amendment. Flagrant disregard of
the proposed amendment's clear and simple provisions would
constitute nothing less than a betrayal of the public trust. In
their campaigns for reelection, elected officials who flout
their responsibilities under this amendment will find that the
political process will provide the ultimate enforcement
It is the committee's view that: (1) the language and the
intent of S.J. Res. 1 are clear; (2) Congress and the President
are to abide by this language and intent; and (3) when
necessary, Congress must enact legislation that will better
enable the Congress and the President to comply with the
language and intent of the amendment.
judicial enforcement and presidential impoundment
The committee believes that S.J. Res. 1 strikes the right
balance in terms of judicial review. By remaining silent about
judicial review in the amendment itself, its authors have
refused to establish congressional sanction for the Federal
courts to involve themselves in fundamental macroeconomic and
budgetary questions, while not undermining their equally
fundamental obligation to ``say what the law is,'' Marbury v.
Madison, 1 Cranch 137, 177 (1803). The committee agrees with
former Attorney General William P. Barr who stated that there
Little risk that the amendment will become the basis
for judicial micromangement or superintendence of the
Federal budget process. Furthermore, to the extent such
judicial intrusion does arise, the amendment itself
equips Congress to correct the problem by statute. On
balance, moreover, whatever remote risk there may be
that courts will play an overly intrusive role in
enforcing the amendment, that risk is, in my opinion,
vastly outweighed by the benefits of such an amendment.
There exists three basic constraints that prevents the
courts from becoming unduly involved in the budgetary process:
(1) limitations on Federal courts contained in article III of
the Constitution, primarily the doctrine of ``standing''; (2)
the deference courts owe to Congress under both the ``political
question'' doctrine and section 6 of the amendment itself,
which confers enforcement authority in Congress; and (3) the
limits on judicial remedies to be imposed on a coordinate
branch of government--limitations on remedies that are self-
imposed by courts and that, in appropriate circumstances, may
be imposed on the courts by Congress.
To succeed in any lawsuit, a litigant must demonstrate
standing to sue. To demonstrate article III standing, a
litigant at a minimum must meet three requirements: (1)
``injury in fact''--that the litigant suffered some concrete
and particularized injury; (2) ``traceability''--that the
concrete injury was both caused by and is traceable to the
unlawful conduct; and (3) ``redressibility''--that the relief
sought will redress the alleged injury. For example, Lujan v.
Defenders of Wildlife, 112 S.Ct. 2130, 2136 (1992); Valley
Forge Christian College v. Americans United for Separation of
Church & State, Inc., 454 U.S. 464, 482-83 (1982). In
challenging measures enacted by Congress under a balanced-
budget regime, it would be an extremely difficult hurdle for a
litigant to demonstrate something more concrete than a
``generalized grievance'' and burden shared by all citizens and
taxpayers, the ``injury in fact'' requirement. See Frothingham
v. Mellon, 262 U.S. 447, 487 (1923).
Even in the vastly improbable case where an ``injury in
fact'' was established, a litigant would find it near
impossible to establish the ``traceability'' and
``redressibility'' requirements of the article III standing
test. Litigants would have a difficult time in showing that any
alleged unlawful conduct--the unbalancing of the budget or the
shattering of the debt ceiling--``caused'' or is ``traceable''
to a particular spending measure that harmed them. Furthermore,
because the Congress would have numerous options to achieve
balanced-budget compliance, there would be no legitimate basis
for a court to nullify the specific spending measure objected
to by the litigant.
As to the ``redressibility'' prong, this requirement would
be difficult to meet simply because courts are wary of becoming
involved in the budget process--which is legislative in
nature--and separation of power concerns will prevent courts
from specifying adjustments to any Federal program or
expenditures. Thus, for this reason, Missouri v. Jenkins, 495
U.S. 33 (1990), where the Supreme Court upheld the district
court's power to order a local school district to levy taxes,
is inapposite because it is a 14th amendment case not involving
``an instance of one branch of the Federal Government invading
the province of another.'' Id. at 67. Courts simply will not
have the authority to order Congress to raise taxes.
Furthermore, the well-established ``political question'' and
``justiciability'' doctrines will mandate that courts give the
greatest deference to congressional budgetary measures,
particularly since section 6 of S.J. Res 1 explicitly confers
on Congress the responsibility of enforcing the amendment, and
the amendment allows Congress to ``rely on estimates of outlays
and receipts.'' See Baker v. Carr, 369 U.S. 186, 217 (1962).
Under these circumstances, it is unlikely that a court would
substitute its judgment for that of Congress.
The committee believes that the ``taxpayer'' standing case,
Flast v. Cohen, 392 U.S. 83 (1968), also is not applicable to
enforcement of the balanced-budget amendment. First, the Flast
case has been limited by the Supreme Court to establishment
clause cases. See Valley Forge Christian College, 454 U.S. at
480. Second, by its terms, Flast is limited to cases
challenging legislation promulgated under Congress'
constitutional ``tax and spend'' powers when the expenditure of
the tax was made for an illicit purpose. Sections 1 and 2 of
S.J. Res. 1, limit Congress' borrowing power and the amendment
contains no restriction on the purposes of the expenditures.
Finally, in subsequent cases, the Supreme Court has reaffirmed
the need for a litigant to demonstrate particularized injury,
thus casting doubt on the vitality of Flast. See Lujan, 112 S.
Ct. at 2136. The committee also believes that there would be no
so-called ``congressional'' standing because Members of
Congress would not be able to demonstrate that they were harmed
by any dilution or nullification of their vote and that under
the doctrine of ``equitable discretion,'' Members would not be
able to show that substantial relief could not otherwise be
obtained from fellow legislators through the enactment, repeal
or amendment of a statute. See Melcher v. Open Market Comm.,
836 F.2d 561, 563 (D.C. Cir. 1987).
A further limitation on judicial interference is section 6
of S.J. Res. 1. Under this section, Congress must adopt
statutory remedies and mechanisms for any purported budgetary
shortfall, such as sequestration, rescission, or the
establishment of a contingency fund. Pursuant to section 6, the
committee believes that Congress, if it finds it necessary,
could limit the type of remedies a court may grant or limit the
court's jurisdiction in some other manner to proscribe judicial
overreaching. Congress has adopted such limitations in under
circumstances pursuant to its article III authority. See, for
example, Norris-LaGuardia Act, 29 U.S.C. 101-115; Federal Tax
Injunction Act, 28 U.S.C. 2283; Tax Injunction Act, 26 U.S.C.
Finally, it is not the intent of the committee to grant the
President any impoundment authority under S.J. Res. 1. In fact,
up to the end of the fiscal year, the President has nothing to
impound because Congress in the amendment has the power to
ratify or to specify the amount of deficit spending that may
occur in that fiscal year. In any event, under section 6 of the
amendment, Congress can specify exactly what type of
enforcement mechanism it wants and the President, as Chief
Executive, is duty bound to enforce that particular
congressional scheme to the exclusion of impoundment. See
Kendall v. United States ex rel. Stokes, 37 U.S. (12 Pet.) 542
the experience in the states
In contrast to Federal fiscal policies, continued deficit
spending by the States has been a rarity. More States incur
general surpluses than incur general deficits. Forty-eight
States have constitutional provisions limiting their ability to
incur budget deficits. While there are significant differences
in the problems and resources that the State and Federal
Governments face, the State experience is nonetheless
instructive. The constitutional constraints have proven to be
workable in the States and have not inhibited their ability to
perform their most widely accepted functions. Because it has
been required, State legislatures have learned to operate
effectively within the external limitation of their
A balanced-budget amendment steers a disciplined course
which protects our future economic strength and national
standard of living. Both flexibility and a strong mandate are
needed for a fiscally responsible path for our Nation. Senate
Joint Resolution 1 provides both these elements. A
constitutional balanced-budget amendment can serve as a moral
and legal beacon to guide the Nation in the fundamental choices
IV. Votes of the Committee
Pursuant to paragraph 7 of rule XXVI of the Standing Rules
of the Senate, each committee is to announce the results of
rollcall votes taken in any meeting of the committee on any
measure or amendment. The Senate Judiciary Committee, with a
quorum present, met on Wednesday, January 18, 1995, at 8:30
a.m. to mark up S.J. Res. 1. The following rollcall votes
occurred on amendments proposed thereto:
(1) The Feinstein amendment to exempt Social Security. The
amendment was tabled: 10 yeas to 8 nays.
Thurmond (proxy) Specter (proxy)
Grassley Kennedy (proxy)
DeWine (proxy) Feinstein
(2) The Biden amendment to exempt capital expenditures. The
amendment was tabled: 12 yeas to 5 nays.
Thurmond (proxy) Biden
Simpson (proxy) Kennedy (proxy)
Grassley Leahy (proxy)
The Judiciary Committee met on Wednesday, January 18, 1995,
at 2 p.m. to mark up S.J. Res. 1. The following rollcall votes
occurred on S.J. Res. 1 and amendments proposed thereto:
(3) The Feingold glide path amendment. The amendment was
tabled: 12 yeas to 5 nays.
Simpson Kennedy (proxy)
Grassley Leahy (proxy)
Thompson (proxy) Feingold
(4) The Kennedy impoundment amendment. The amendment was
tabled: 11 yeas to 5 nays.
Simpson (proxy) Kennedy
Grassley (proxy) Leahy
Brown Kohl (proxy)
(5) The Kennedy amendment on enforcement. The amendment was
tabled: 12 yeas to 5 nays.
Grassley (proxy) Leahy
Thompson (proxy) Feingold
(6) Motion to favorably report S.J. Res. 1. The motion was
adopted: 15 yeas to 3 nays.
Grassley (proxy) Feingold
V. Text of S.J. Res. 1
[104th Cong., 1st sess.]
JOINT RESOLUTION proposing an amendment to the Constitution of the
United States to require a balanced budget
Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled, (two-thirds of
each House concurring therein), That the following article is
proposed as an amendment to the Constitution, which shall be
valid to all intents and purposes as part of the Constitution
when ratified by the legislatures of three-fourths of the
several States within seven years after the date of its
submission to the States for ratification:
``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
``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
``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
``Section 8. This article shall take effect beginning with
fiscal year 2002 or with the second fiscal year beginning after
its ratification, whichever is later.''.
VI. Section-by-Section Analysis
The core provision of Senate Joint Resolution 1 is
contained in section 1, which establishes as a fiscal norm the
concept of a balanced Federal budget. This section mandates
that ``Total outlays for any fiscal year shall not exceed
total receipts for that year, * * *.''
The section does not specify the process that Congress must
follow in order to achieve a balanced budget. The committee
recognizes that there may be many equitable means of reaching
that goal; it is therefore not the committee's intent to
dictate any particular fiscal strategy upon the Congress.
Rather, the committee expects the Congress to use its full
range of legislative powers in order to comply with the
Section 1 also contains an exception; the balanced-budget
requirement applies ``* * * 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.''
This provision preserves Congress' flexibility and capacity to
respond to economic crises without sacrificing accountability.
Nothing in this section either anticipates nor requires any
alteration in the balance of powers between the legislative and
``* * * fiscal year * * *'' is intended as a term defined
by statute and, as such, is to have no constitutional standing
independent from its statutory definition. The amendment does
not require an immutable definition; other fiscal years could
be defined without necessarily straining the intent of the
``* * * shall not exceed * * *'' is a clear mandate: a
command. It means that outlays may not be greater than receipts
for any given fiscal year. Receipts may exceed outlays.
``* * * unless three-fifths * * *'' identifies the minimum
proportion of the total membership of each House needed for
action by the Congress. Under current law, three-fifths of the
Senate membership is 60, and three-fifths of the House of
Representatives is 261. [Vacancies would reduce the minimum
``* * * the whole number of each House * * *'' is intended
to be consistent with the phrase ``the whole number of
Senators'' in the 12th amendment to the Constitution, denoting
the entire membership of each individual House of Congress in
``* * * for a specific excess of outlays over receipts * *
*'' means that the maximum amount of deficit spending to be
allowed must be clearly identified. The committee intends that
the vote to permit deficit spending be limited to the issue of
such a deficit. By forcing Congress to identify and confront
any particular deficit, this clause will promote
``* * * by a rollcall vote.'' specifies what is already
implicit. A rollcall vote will be required to ensure that the
required three-fifths vote has been recorded. The committee
makes this provision explicit in order to emphasize
accountability in the approval of any deficit.
Section 2 provides that ``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 2 works
in tandem with section 1 to enforce the balanced-budget
Section 2 focuses public attention on the magnitude of
government indebtedness. To run a deficit, the Federal
Government must borrow funds to cover its obligations. Section
2 removes the borrowing power from the Government, unless
three-fifths of the total membership of both Houses votes to
raise the debt limit. As a result, whenever the Government
exceeds the debt ceiling, it runs a theoretical risk of
default, a powerful incentive for balancing the budget. The
committee expects that the three-fifths vote to increase
borrowing will be the exception, not the norm.
Votes to suspend the balanced-budget requirement under
section 1 and to raise the debt-ceiling under section 2 need
not be made separately. [The committee recognizes that, in
certain cases, both decisions could be approved together, in
one piece of legislation, by the same, three-fifths vote.]
``* * * the limit on the debt * * *'' assumes the
establishment of a new statutory limit on the measure of
government indebtedness. This limit may be established in
addition to, or as a replacement for, any present statutory
limit on the debt held by the public.
``* * * debt of the United States held by the public * *
*'' is a widely used and understood measurement tool. The
General Accounting Office, in its ``Glossary of Terms Used in
the Federal Budget Process'' [(Exposure Draft, January 1993)]
defines ``Debt Held by the Public'' as ``That part of the gross
federal debt held outside the federal government. This includes
any federal debt held by individuals, corporations, state or
local governments, the Federal Reserve System, and foreign
governments and central banks. Debt held by government trust
funds, revolving funds, and special funds is excluded from debt
held by the public.'' The current, accepted meaning of ``debt *
* * held by the public'' is intended to be the controlling
definition under this article.
Section 3 requires that ``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.''
This section reflects the committee's belief that sound
fiscal planning should be a shared governmental responsibility.
The section is not intended to grant the President formal
authority or power over budget legislation or spending. It is
the committee's expectation that, charged with like
responsibilities, the President and the Congress will more
readily collaborate in fiscal planning.
``Prior to each fiscal year * * *'' is intended to ensure
that the President transmits a budget proposal before the first
day of the statutory fiscal year.
``* * * the President shall transmit to the Congress * *
*'' is intended to impose on the President a constitutional
duty to communicate to the Congress a proposed budget that is
balanced. Article II enumerates several duties currently
required of the President, including delivering the State of
the Union address, receiving foreign Ambassadors, and
commissioning Officers of the United States. It is the
committee's belief that this new duty similarly merits
``* * * a proposed budget * * * in which total outlays do
not exceed total receipts.'' is intended to require a
responsible proposal that should anticipate a level of outlays
no greater than the level of receipts. Such a proposal
necessarily requires a projection of future events. The
committee anticipates good faith on the part of the President
with respect to projected economic factors.
By requiring approval ``* * * by a majority of the whole
number of each House by a rollcall vote'' for any ``bill to
increase revenue * * *'', section 4 provides a responsible and
balanced amount of tax limitation and improves congressional
accountability for revenue measures.
``* * * bill to increase revenue * * *'' is intended to
include those measures whose intended and anticipated effect
will be to increase revenues to the Federal Government.
``* * * by a majority of the whole number of each House by
a rollcall vote.'' is intended, like similar provisions in
section 1, to identify the minimum proportion necessary to
approve the relevant measure. Here the requirement is a
majority. The terms relating to ``the whole number of each
House'' and ``rollcall vote'' are intended to have the same
meaning as in section 1.
This section guarantees that Congress will retain maximum
flexibility in responding to clear national security crises
such as a declared war or imminent military threat to national
``* * * may waive * * *'' is intended to provide Congress
with discretionary authority to operate outside of the
provisions of this article in the event of declarations of war.
The waiver specified in the first sentence of this section
would require a concurrent resolution of Congress, but would
not have to be submitted to the President for approval.
``* * * the provisions of this article * * *'' is intended
to refer primarily to sections 1, 2, 3, and 4 of the amendment.
The Congress may waive any or all of these provisions.
``* * * declaration of war * * *'' is intended to be
construed in the context of the powers of the Congress to
declare war under article 1, section 8. The committee intends
that ordinary and prudent preparations for a war perceived by
Congress to be imminent would be funded fully within the
limitations imposed by the amendment, although Congress could
establish higher levels of spending or deficits for these or
any other purposes under section 1.
``* * * for any fiscal year * * * is in effect.'' is
intended, in the first sentence of this section, to require a
separate waiver of the provisions of the amendment each year.
Congress may not adopt a waiver resolution which applies to
more than one fiscal year. Rather, Congress must annually adopt
a separate waiver for the fiscal year at issue.
``The provisions of this article * * *'' in the second
sentence has the same meaning as in the first sentence of this
section. See above.
``* * * may be waived * * *'' is intended to provide
Congress with discretionary authority to operate outside of the
provisions of this article in the event the United States is
engaged in certain kinds of military conflict. The waiver
specified in the second sentence of this section would require
a joint resolution rather than a simple concurrent resolution
``* * * for any fiscal year * * *'' in the second sentence
has the same meaning as in the first sentence of this section.
``* * * is engaged in military conflict * * *'' is intended
to limit the applicability of this waiver to situations
involving the actual use of military force, which nonetheless
do not rise to the level of a formal declaration of war.
``* * * imminent and serious military threat to national
security * * *'' is intended to define those situations in
which Congress, in order to respond to urgent national security
crises with additional outlays for the defense of the Nation,
needs more flexibility than the three-fifths vote requirement
in section 1 would provide.
``* * * so declared by a joint resolution, * * * which
becomes law.'' is intended to require Congress to pass a joint
resolution, rather than a simple or concurrent resolution, and
to specify that the resolution must be enacted into law before
it can be effective for the purposes of this section.
``* * * a majority of the whole number of each House, * *
*'' has the same meaning as the similar provision in section 4.
Section 6 states that ``[t]he Congress shall enforce and
implement this article by appropriate legislation, which may
rely on estimates of outlays and receipts.'' This section makes
explicit what is implicit, that Congress has a positive
obligation to fashion legislation to enforce this article.
Section 6 underscores Congress' continuing role in
implementing the balanced-budget requirement. The provision
precludes any interpretation of the amendment that would result
in a shift in the balance of powers among the branches of
``The Congress shall enforce and implement * * *'' creates
a positive obligation on the part of Congress to enact
appropriate legislation to implement and enforce the article.
This section recognizes that an amendment dealing with subject
matter as complicated as the Federal budget process must be
supplemented with implementing legislation.
``* * * which may rely on estimates of outlays and
receipts.'' confirms that Congress has the authority to use
reasonable estimates, where appropriate, as a means of
achieving the normative result required in section 1.
``Estimates'' means good faith, responsible, and reasonable
estimates made with honest intent to implement section 1, and
not evade it.
This provision gives Congress an appropriate degree of
flexibility in fashioning necessary implementing legislation.
For example, Congress could use estimates of receipts or
outlays at the beginning of the fiscal year to determine
whether the balanced-budget requirement of section 1 would be
satisfied, so long as the estimates were reasonable and made in
good faith. In addition, Congress could decide that a deficit
caused by a temporary, self-correcting drop in receipts or
increase in outlays during the fiscal year would not violate
the article. Similarly, Congress could state that very small or
negligible deviations from a balanced budget would not
represent a violation of section 1. If an excess of outlays
over receipts were to occur, Congress can require that any
shortfall must be made up during the following fiscal year.
Section 7 is intended to clarify further the relevant
amounts that must be balanced.
``* * * Total receipts * * *'' is intended to include all
moneys received by the Treasury of the United States, either
directly or indirectly through Federal or quasi-Federal
agencies created under the authority of acts of Congress,
except those derived from borrowing. In present usage,
``receipts'' is intended to be synonymous with the definition
of ``budget receipts,'' which are not meant to include off-
setting collections or refunds.
``* * * except those derived from borrowing. * * *'' is
intended to exclude from receipts the proceeds of debt
issuance. To borrow is to receive with the intention of
returning the same or equivalent. It is intended that those
obligations the title to which can be transferred by the
present owner to others, like Treasury notes and bonds, be
excluded from receipts. Contributions to social insurance
programs, though also carrying an implied obligation, are not
transferable and should be included in receipts.
``* * * Total outlays * * *'' is intended to include all
disbursements from the Treasury of the United States, either
directly or indirectly through Federal or quasi-Federal
agencies created under the authority of acts of Congress, and
either ``on-budget'' or ``off-budget,'' except those for
repayment of debt principal.
Among the Federal programs that would not be covered by
S.J. Res. 1 is the electric power program of the Tennessee
Valley Authority. Since 1959, the financing of that program has
been the sole responsibility of its own electric ratepayers--
not the U.S. Treasury and the Nation's taxpayers. Consequently,
the receipts and outlays of that program are not part of the
problem S.J. Res. 1 is directed at solving.
``* * * except for those for repayment of debt principal.''
is intended to exclude from outlays the repurchase or
retirement of Federal debt. Debt principal is intended to be
distinguished from interest payments, which are not excluded
from outlays, and refers to a capital sum due as a debt.
This section states that the amendment will take effect
some specified time after it is adopted, so as to allow
Congress a period to consider and adopt the necessary
procedures to implement the amendment, and to begin the process
of balancing the budget.
``* * * beginning with fiscal year 2002 * * *'' states
that, once ratified, the amendment will go into effect no
earlier than fiscal year 2002.
``* * * or with the second fiscal year * * *'' provides
that the amendment will go into effect 2 years after
ratification by the States, so long as that period is later
``* * * its ratification, * * *'' is intended to be
construed as ratification of this article under article V of
VII. Cost Estimate
Congressional Budget Office,
Washington, DC, January 19, 1995.
Hon. Orrin G. Hatch,
Chairman, Committee on the Judiciary,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
reviewed S.J. Res. 1, a joint resolution proposing a balanced
budget amendment to the Constitution of the United States, as
ordered reported by the Senate Committee on the Judiciary on
January 18, 1995.
S.J. Res. 1 would propose an amendment to the Constitution
to require that the Congress, each year, adopt a budget in
which total outlays of the United States do not exceed total
receipts, unless the Congress approves a specific excess of
outlays over receipts by a three-fifths vote in each House. The
proposed budget submitted by the President would have to be
balanced as well. The amendment also would require a three-
fifths vote in each House to raise the limit on federal debt
held by the public and a simple majority on a roll call vote in
each House to increase revenue. Such provisions could be waived
for any fiscal year in which a declaration of war is in effect
or in which the United States is engaged in military conflict
that causes an imminent and serious military threat to national
security. The amendment would have to he ratified by three-
fourths of the states within seven years of its submission for
ratification, and would take effect beginning with fiscal year
2002 or the second fiscal year after its ratification,
whichever is later.
The budgetary impact of this amendment is very uncertain,
because it depends on when it takes effect and the extent to
which the Congress would exercise the discretion provided by
the amendment to approve budget deficits. The earliest the
amendment could take effect would be for fiscal year 2002.
According to CBO's latest projections of a baseline that
assumes inflation adjustments for discretionary spending after
1998, some combination of spending cuts and tax increases
totaling $322 billion in 2002 would be needed to eliminate the
deficit in that year. The amounts of deficit reduction called
for in the years preceding 2002 depend both on the exact
policies adopted and on when the process is started.
For illustrative purposes, CBO has devised one possible
path leading to a balanced budget in 2002 (see table on next
page). Starting from the baseline that assumes an inflation
adjustment for discretionary spending after 1998, that path
first shows the savings that would be achieved if discretionary
spending were instead frozen at the dollar level of the 1998
cap through 2002. Such a freeze, along with the resulting debt-
service effects, would produce $89 billion of the required
savings of $322 billion in 2002. Under this freeze policy, the
buying power of total discretionary appropriations in 2002
would be approximately 20 percent lower than in 1995.
CBO also built into the illustrative path a possible course
of savings from further policy changes. The amounts of those
savings are not based on the adoption of any particular set of
policies, but they do assume that policy changes are phased in
between 1996 and 1999 in a pattern that is similar to the
changes in mandatory spending enacted in the last two
reconciliation acts. After 1999, the assumed savings increase
at the baseline rate of growth for entitlement and other
mandatory spending, excluding Social Security. Such a pattern
of savings implies that the cuts implemented in earlier years
are permanent and that no additional policy changes are made.
If those savings were achieved entirely out of entitlement and
other mandatory programs (excluding Social Security), they
would represent about a 20 percent reduction from current-
policy levels for those programs.
Over the entire 1996-2002 period, the savings in CBO's
illustrative path that result directly from policy changes
total more than $1 trillion (in relation to a baseline that
includes an inflation adjustment for discretionary spending
after 1998). Savings from policy changes, measured relative to
a baseline with discretionary spending frozen after 1998, would
be about $200 billion less. The required savings from policy
changes would be smaller, and the debt service savings would be
greater, if, as we would anticipate, ongoing deficit reduction
efforts over this period were to result in lower interest
This resolution would not directly affect spending or
receipts, so there would be no pay-as-you-go scoring under
section 252 of the Balanced Budget and Emergency Deficit
Control Act of 1985.
Enactment of this legislation would not directly affect the
budgets of state and local governments. However, steps to
reduce the deficit so as to meet the requirements of this
amendment could include cuts in federal grants to states, a
smaller federal contribution towards shared programs or
projects, an increased demand for state and local programs to
compensate for reductions in federal programs, and/or an
increase in federal mandates imposed on states or localities.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are James
Horney and Mark Grabowicz.
Robert D. Reischauer,
ILLUSTRATIVE DEFICIT REDUCTION PATH
[By fiscal year, in billions of dollars]
1995 1996 1997 1998 1999 2000 2001 2002 1996-2002
CBO January Baseline Deficit With Discretionary
Inflation After 1998 \1\............................ 176 207 224 222 253 284 297 322 NA
Freeze Discretionary Outlays After 1998 Discretionary
reduction........................................... 0 0 0 0 --19 --38 --58 --78 --193
Debt service....................................... 0 0 0 0 --1 --2 --6 --10 --19
Total deficit reduction.......................... 0 0 0 0 --19 --40 --63 --89 --212
CBO January Baseline Deficit Without Discretionary
Inflation After 1998 \2\............................ 176 207 224 222 234 243 234 234 NA
Additional Deficit Reduction Policy changes \3\...... 0 --32 --65 --97 --145 --156 --168 --180 --843
Debt service....................................... 0 --1 --4 --10 --18 --28 --40 --54 --156
Total deficit reduction.......................... 0 --33 --69 --106 --163 --184 --208 --234 --998
Resulting Deficit.................................... 176 174 155 116 71 59 26 (\4\) NA
Total Change from Baseline...........................
Deficit With Inflation After 1998 Policy changes..... 0 --32 --65 --97 --164 --194 --225 --259 --1,035
Debt service....................................... 0 --1 --4 --10 --19 --31 --46 --64 --175
Total deficit reduction.......................... 0 --33 --69 --106 --182 --225 --271 --323 --1,210
\1\ Assumes compliance with discretionary spending limits of Balanced Budget and Emergency Deficit Control Act through 1998. Discretionary spending is
assumed to increase at the rate of inflation after 1998.
\2\ Assumes compliance with discretionary spending limits of Balanced Budget and Emergency Deficit Control Act through 1998. Discretionary spending is
frozen at the 1998 level after 1998.
\3\ This represents only one of an infinite number of possible paths that would lead to a balanced budget. The exact path depends on when the deficit
reduction begins and the specific policies adopted by the Congress and the President. This path is not based on any specific policy assumptions, but
does assume policies are fully phased in by 1999.
\4\ Less than $500 million.
Source: Congressional Budget Office.
Note: NA = Not applicable.
VIII. Regulatory Impact Statement
Pursuant to paragraph 11(b), rule XXVI of the Standing
Rules of the Senate, the committee, after due consideration,
concludes that Senate Joint Resolution 1 will not have direct
IX. ADDITIONAL VIEWS OF MR. KYL
S.J. Res. 1, the Balanced Budget Amendment, establishes the
framework and imposes the discipline that is so urgently needed
to force Congress to put its fiscal house in order. I support
it, believing it represents the best and only chance to send a
Balanced Budget Amendment to the States for ratification in the
Nevertheless, it is not the amendment I would have written.
Ideally, it should have included an explicit tax or spending
limitation. I support either kind of limit, but prefer a
spending limitation as the most direct approach and the easiest
The Balanced Budget/Spending Limitation Amendment, S.J.
Res. 3, which I introduced on January 4, 1995, includes such a
spending limit. It requires a balanced budget and limits
spending to 19 percent of Gross National Product (GNP), which
is roughly the level of revenue the federal government has
collected for the last 40 years.
Limit spending and there is no need to consider tax
increases. Congress wouldn't be allowed to spend the additional
revenue that is raised. Link federal spending to economic
growth, as measured by GNP, and an incentive is created for
Congress to promote pro-growth economic policies. The more the
economy grows, the more Congress is allowed to spend, but
always proportionate to the size of the economy.
A spending limitation has a further advantage. It reflects
the fact that the economy has already imposed an effective
limit on revenues, relative to GNP.
Despite tax rate increases and tax cuts, recessions and
expansions, and fiscal policies pursued by Presidents of both
political parties, revenues as a share of GNP have fluctuated
only around a relatively narrow band of 18 to 20 percent for
the last generation.
That is because changes in the Tax Code change people's
behavior. Lower tax rates stimulate the economy, resulting in
more taxable income and transactions, and more revenue to the
Treasury. Higher tax rates discourage work, production, savings
and investment, so there is ultimately less economic activity
Revenues amounted to about 19 percent of GNP when the top
marginal income tax rate was in the 90 percent range in the
1950's. They amounted to just under 19 percent of GNP when the
top marginal rate was in the 28 percent range in the 1980's.
Revenues amounted to about 19 percent of GNP in the 1970's
during one of the longest post-war economic contractions, and
about 19 percent during the longest peacetime expansion during
Since revenues remain relatively constant at about 19
percent of GNP, the significance of our nation's tax policy is
how Congress taxes, not how much it can tax. The key is whether
tax policy fosters economic growth and opportunity, measured in
terms of GNP, or results in a smaller and weaker economy. In
other words, 19 percent of a larger GNP represents more revenue
to the Treasury than 19 percent of a smaller GNP.
The benefit of writing a spending limitation into the
Balanced Budget Amendment is that it will preclude futile
attempts by Congress to balance the budget by raising taxes.
Raising taxes will merely impede economic growth and harm the
nation's standard of living. A spending limitation provides
Congress with the guidance at the outset that there is really
only one way to balance the budget--by cutting government
While my preference is that a spending limit be included in
the Balanced Budget Amendment, I believe the issue can also be
addressed if need be in subsequent implementing or enforcement
legislation. The quest for the perfect should not become an
excuse to defeat the very good. The stakes are too high, in
terms of the mountain of additional debt Congress is passing on
to future generations, to miss yet another opportunity to send
a Balanced Budget Amendment to the States for ratification.
If there is insufficient support for inclusion of a
spending limit in the Amendment itself I believe Congress
should approve S.J. Res. 1 as reported by the Judiciary
Committee and then turn to consideration of a federal spending
limit as the means of implementing the balanced budget
X. ADDITIONAL VIEWS OF MR. BIDEN
I have long supported the concept of a balanced budget
amendment. Amending the Constitution of the United States is an
extraordinary step, but I believe an extraordinary response is
necessary to address the continuing deficit problems facing the
country. Notwithstanding my support for the concept of a
balanced budget amendment, I remained concerned about the form
such an amendment takes. The stakes are never higher, as we all
recognize, than when we consider amending our basic document of
Although I believe the amendment could be substantially
improved in form, and I attempted unsuccessfully to offer such
improvements in committee, I voted in favor of reporting the
amendment so that the Senate as a whole would have the
opportunity to consider and vote on this important issue. I
offer these additional views to summarize my specific concerns
about the form of this balanced budget amendment in advance of
floor consideration of S.J. Res. 1.
The form of the amendment raises the following questions:
Do we risk unsettling--permanently--the balance of powers
carefully struck by the framers of the Constitution?
Do we risk skewing--permanently--the budget process by
failing to recognize that long-term capital investment may best
be paid for by long-term borrowing, and that Social Security is
a unique institution with unique, and vast, demands and
Do we risk an economic catastrophe by setting a target date
for a balanced budget, without ensuring that we follow a
measured ``glide path'' to that goal that will avoid a sudden
one-year contraction of our entire economy?
Constitutional Concerns: Maintaining the Balance of Powers
My greatest concern is that this balanced budget amendment
will fundamentally shift the constitutional balance of powers
between Congress and president that has served us so well. The
remarkable resiliency of our Constitution is due to the
prudence of its authors, who restricted their prescriptions to
how decisions are made, and who crafted a self-regulating
balance of powers that has endured for two centuries.
We now consider a change in that Constitution. I am in full
agreement with my colleagues who--quite appropriately citing
Thomas Jefferson--conclude that the decision to pass debt on to
future generations is one worthy of constitutional treatment. I
am less certain that the vehicle we are considering today can
accomplish its goal without unintended consequences in other
areas of the Constitution.
The founders gave taxing and spending powers to Congress
because that is the branch of our system that is closest to the
people. Indeed, some delegates at the Constitutional Convention
favored restricting these powers to the House of
Representatives alone, because the Senate--at that time, to be
appointed by the state legislatures, not elected by the
people--was too distant from popular needs and desires. The
founders compromised by requiring that all revenue bills
originate in the House, and then pass on to the Senate. But the
principle was set--the people's representatives should hold the
The founders also intended the power of the purse to be one
of the legislative branch's strongest bulwarks against
incursions by the executive, and the key to maintaining an
enduring balance of powers. James Madison--truly named in the
main body of this report the ``Father of the Constitution''--
wrote in The Federalist Papers (No. 58) that this ``power over
the purse'' is
the most complete and effectual weapon with which any
constitution can arm the immediate representatives of
the people, for obtaining a redress of every grievance,
and for carrying into effect every just and salutary
It is my fear that S.J. Res. 1 may fundamentally rearrange
that allocation of powers by sharing that power of the purse
with the president. I agree with the many noted constitutional
scholars who argue that presidents will seize on the language
of the balanced budget amendment as a justification to impound
funds duly appropriated by Congress.
This power to impound would give the president an
unprecedented and powerful tool with which to oppose Congress.
With a stroke of his impoundment pen, the president could undo
spending decisions made by Congress, and in the process impose
his own political and policy biases--concluding that too much
is being spent on a particular program, or in a particular
region or state. The balance of power over spending will have
shifted dramatically away from the branch closest to the
people, where the framers wisely placed it.
Because of my substantial constitutional concerns, I
strongly supported Senator Kennedy's amendment in committee
that would have made it clear that ``[n]othing in this article
shall authorize the President to impound funds appropriated by
Congress by law,'' or to impose taxes, another fear expressed
by some constitutional scholars. This language, if added to the
balanced budget amendment, would permanently foreclose the
claim that the amendment gives the President substantial new
power, power that the Constitution gives to the Congress.
For these same reasons I supported a second amendment
offered by Senator Kennedy, to require Congress to pass
legislation now to clarify what the role of the President and
the courts should be in the enforcement of this balanced budget
amendment. That amendment, too, was defeated in committee.
The durable yet delicate balance of powers struck by our
founding fathers has served us well for over 200 years. I will
continue to work on the floor of the Senate to modify this
balanced budget amendment to make it clear that nothing in this
amendment should be construed to unsettle that delicate
Practical Concerns: Properly Accounting for the Long-Term Needs of the
I have two concerns about the way that S.J. Res. 1 will
work in practice. Both concerns arise from the fact that S.J.
Res. 1 sets a blanket rule--``Total outlays for any fiscal year
shall not exceed total receipts for that fiscal year''--without
properly accounting for the long-term needs of the nation.
My first practical concern is that S.J. Res. 1 fails to
provide for a capital budget for such items as roads, bridges,
buildings, and defense needs. My second practical concern is
that S.J. Res. 1 fails to properly account for the Social
Security Trust Fund.
Creating a Capital Investment Budget
My concern about the lack of a capital budget is shared by
one of the most respected conservative publications in the
nation. When I opened the Wall Street Journal following last
November's election and saw an editorial on the balanced budget
amendment to the Constitution, I was struck by the fact that it
cautioned that we not move precipitously on the balanced budget
Among its concerns, the Journal stressed that the proposed
amendment does not recognize the need for long-term investing
by the federal government. The Journal editorial says, ``To
understand the economics, start here: if all Americans were
required to balance their budgets every year, no one could ever
buy a house.'' The Journal continues: ``Of course, households
don't think about their budgets that way; they figure `balance'
means meeting their mortgage payments. Similarly, state and
local governments with `balanced budget' requirements can still
borrow money for capital improvements * * *.''
S.J. Res. 1 throws all manner of programs and
responsibilities and government functions into the same annual
budget, and does not provide for a capital budget. By failing
to do so, this balanced budget amendment will pit major
investments with long-term payoffs against programs with more
attractive short-term economic and political returns. The
result will be to put the future at a disadvantage compared to
the present--just the opposite of what our budget policy should
Long-term investments should not be counted the same way as
salaries for the FBI or purchases of office supplies. No
individual, no business, no state or local government--indeed,
no other industrial economy--keeps its books that way.
I do not believe we should keep our books that way either.
I proposed an amendment in committee to provide for an
investment budget in the balanced budget amendment that would
not be included in the ``total outlays'' of the federal budget.
This amendment, which was based on the experiences of the
states, including my own state of Delaware, was narrowly drawn.
It created a capital budget for ``major public physical capital
investments,'' limited that capital budget to 10 percent of
annual outlays (about what the federal government has been
spending on such major physical capital items in recent years),
and required a three-fifths vote of both houses to place an
item within the capital budget. I did not want to make it easy
to treat an item as a ``capital investment''--I wanted to make
it hard. But I wanted to create a mechanism for distinguishing
between long-term investment that merits long-term borrowing,
and short-term operating needs that should be balanced every
Although my amendment was defeated in committee, I will
work to include such a narrowly-drawn capital budget in S.J.
Res. 1 on the floor.
Properly Accounting for Social Security
A second practical concern--shared by many citizens in my
own state of Delaware--has to do with the treatment of the
Social Security Trust Fund. S.J. Res. 1 makes no special
provision for this unique institution, and instead includes the
Social Security Trust Fund in the revenues and expenditures of
the federal government.
I support Senator Feinstein's effort to keep the Social
Security Trust Fund where it is today, independent from the
calculations of the federal budget. If we throw it into the mix
with every other program, we will make it more difficult--and
thus, less likely--that we will undertake the reforms necessary
to keep the system healthy in the future.
With its sizeable surpluses in the near future--a hundred
billion dollars per year--and its impending deficits in the
next century, the Social Security System presents unique
problems. I fear that those problems will take a back seat to
annual budget pressures unless it is protected. I also fear
that if Social Security is not set apart, we will rely on its
substantial surpluses in the near future to mask substantial
deficits in the rest of the federal government.
For all these reasons, I supported Senator Feinstein's
amendment in committee, and will support efforts on the floor
of the Senate to extend to Social Security the protection it
A ``Glide Path'' to a Balanced Budget
In committee, I also supported an amendment offered by
Senator Feingold to require Congress to spell out how it will
achieve a balanced budget before sending it to the states for
ratification. I consider such disclosure important for two
reasons. First, the states should understand how a balanced
budget amendment will affect them.
Second, and more important, we need to ensure that we do
not arrive at the target date of 2002 without a measured plan
to reduce the annual deficit gradually. As the economics
experts who testified before the Judiciary Committee agreed, a
sudden one-year cut in the deficit as we reach 2002 could have
severe economic consequences for the nation. This balanced
budget amendment would be improved if it provided for such a
``glide path'' to a balanced budget.
These are my concerns, and I have long held them. I am
concerned as well, though, that after years of budget deficits
and trillions of dollars of growing debt, we must take
aggressive action towards fiscal responsibility. Despite my
doubts about potential side-effects of this proposed amendment,
I have no doubt that we must change the way we make budget
choices. In crafting the final form of the amendment, I hope we
will work to be as certain as possible that the change we adopt
will have the effects we desire, and that we understand what
those effects will be.
As I have in past years, I voted in committee to report
this amendment to the full Senate so that the important issues
it presents can receive the treatment they deserve. Once on the
floor, I will continue to support attempts to improve how the
amendment will work and to clarify what it will do.
XI. MINORITY VIEWS OF SENATORS KENNEDY, LEAHY, AND FEINGOLD
contents--introduction and summary
I. The Proposed Amendment Would Undermine the Separation of
Powers Under Our Constitution.
A. The Amendment Would Force the State and Federal
Courts to Resolve Budgetary Issues Appropriately Left
to the Elected Branches of Government.
B. The Amendment Would Give the President Broad
Powers to Impound Appropriated Funds.
C. The Proposed Amendment may also Confer upon the
President the Authority to Impose Taxes, Duties and
D. No Amendment Should be Proposed Before the
Enforcement Legislation Called for by Section 6 is
E. Proposing A Balanced Budget Constitutional
Amendment That Was Enforceable Only by Congress would
be a Serious Mistake.
II. Congress should Pass a Concurrent Resolution Spelling
Out How to Get to a Balanced Budget Before Any Amendment is
Sent to the States.
III. The Balanced Budget Amendment Would Shift Financial
Burdens to State and Local Governments.
A. Ratification of the Proposed Amendment Would
Result In the Imposition of Greater Financial Burdens
on State and Local Governments.
B. No Statutory Ban on Unfunded Mandates Can Bind
IV. The Proposed Constitutional Amendment is Unsound
A. The Proposed Amendment Would Hamper The
Government's Ability to Deal with Recessions and
B. The Proposed Constitutional Amendment Would
Undermine the Value of Treasury Bonds and Drive Up
Interest Costs Paid by the Federal Government.
C. The Experience of the States Does Not Support
Passage of the Proposed Constitutional Amendment.
V. The Proposed Constitutional Amendment Would Forbid
Placing Social Security Off Budget, and Would Prohibit
Establishing a Separate Capital Budget.
A. The Proposed Constitutional Amendment Would
Imperil Social Security.
B. The Proposed Constitutional Amendment Would
Prohibit Exempting Capital Expenditures from the
VI. The Balanced Budget Amendment Would Promote Gridlock
and Undermine Majority Rule.
Introduction and Summary
We agree with the Committee majority that the Federal
Government should maintain a balanced budget. Indeed, all of us
believe that the huge budget deficits run up during the 1980's
unfairly and irresponsibly saddled future generations with
burdensome debt; and all of us believe that Congress must take
dramatic action to reduce the deficit and place the Nation on a
course of sound fiscal management.
We part company with the Committee majority on but one
point: We believe that the so-called balanced budget
constitutional amendment is an unwise and unsound political
gimmick that will pose a threat to our economy and seriously
damage the separation of powers enshrined by the Framers of the
Constitution while doing nothing to reduce the deficit.
Congress does not have to amend the Constitution to balance
the budget. All we have to do is make the difficult decisions
on taxing and spending needed to achieve that goal.
The entire Federal deficit for the current fiscal year--
estimated at $176 billion--represents the interest owed on the
huge national debt--$2.462 trillion--run up in the twelve years
of the Reagan and Bush Administrations. The rest of the budget
is already balanced, and it didn't require a constitutional
amendment to do it.
The progress we have made in the past two years toward
reducing the deficit is the result of the success of President
Clinton's economic plan, which was approved by Congress in
1993, and which will achieve approximately $500 billion in
deficit reduction over the period 1994 to 1998. There is
nothing preventing Congress from continuing to reduce the
deficit. A constitutional amendment is not needed. If it is not
necessary to amend the Constitution, it is necessary not to
As we discuss below, the proposed constitutional amendment
would drastically alter the constitutional system of checks and
balances. It would give the President broad authority when an
unauthorized deficit arises to impound appropriated funds and
impose taxes, duties and fees. And it would give State and
Federal courts extraordinary power to curtail unauthorized
deficits by enjoining spending and ordering the imposition of
Supporters of the proposed amendment contend that Congress
could avoid these outcomes through the passage of the
enforcement legislation required by section 6 of the proposed
amendment. But those supporters have steadfastly refused to
provide anyone with that enforcement legislation; and both the
President and the judiciary have powers and duties under the
Constitution far beyond those that might be granted to them by
such a statute.
At the same time, by requiring supermajorities to authorize
a deficit or increase the debt ceiling, the amendment would
undermine majority rule--the core principle of our Democracy--
by giving a forty-percent-plus-one minority in one House of
Congress unprecedented power to dictate to the majority. In so
doing, it would constitutionalize the gridlock occasioned by
filibusters in the Senate, and extend it to the House of
Representatives as well.
When the economy is in a recession, revenues fall (due to
rising unemployment and falling profits) while expenditures
increase (because of increased demand for unemployment
benefits, food stamps, and other programs to assist the
unemployed). This ``countercylical'' spending helps to maintain
consumer demand and thereby reduce the length and seriousness
of the recession.
Because the proposed constitutional amendment requires a
balanced budget each fiscal year (rather than over the course
of the business cycle), it would prohibit the government from
engaging in this form of ``countercylical'' spending; in fact,
it would require the government to raise taxes and/or cut
spending during economic downturns. As a result, the amendment
could turn recessions into depressions, causing untold economic
misery for our citizens.
The amendment would also prohibit capital budgeting, a
practice used by 42 States and millions of American businesses
and households, under which expenditures for major assets with
long useful lives are paid for over the period when the asset
is in use. Any American who has taken out a mortgage to finance
the purchase of a home appreciates the need for capital
The amendment would also require that all revenues
received, and all expenditures made, by the Social Security
Trust Fund be included in the calculations made to determine
whether the budget is in balance. This requirement would
undermine the long-term security of Social Security by allowing
Congress to use the current surplus in the Trust Fund to avoid
making the difficult decisions necessary to achieve a balanced
overall budget in the near term. And it would encourage
Congress to refrain from addressing the long-term deficit that
Social Security will face in the next century.
At the same time, the proposed constitutional amendment
will create a strong incentive for Congress to place additional
financial burdens on the States. These burdens are likely to
occur through the imposition by Congress of so-called
``unfunded mandates'' on the States; and no legislation
curtailing unfunded mandates passed by this Congress could stop
a subsequent Congress from waiving that legislation and
imposing new mandates on the States. In addition to unfunded
mandates, the proposed constitutional amendment is likely to
increase the financial burden on the States by prompting
Congress to cease Federal involvement in a host of activities
that would have to be undertaken by State and local
For these reasons, and many others, we strongly believe
that before any balanced budget constitutional amendment is
submitted to the States for ratification, Congress should pass
a concurrent resolution specifying in detail the nature of the
steps that will have to be taken over the next seven years to
achieve a balanced budget by 2002. Before they are called upon
to amend our Constitution, the American people, and their
representatives in the State Legislatures, have a right to know
the kinds of actions that will have to be taken to achieve a
Supporters of the proposed constitutional amendment argue
against giving the public this important information before the
amendment is submitted for ratification, contending that the
tough actions required to balance the budget will be so
unpopular with the electorate that State Legislatures will
recoil, and refuse to pass the amendment. If so, one might ask,
won't Congress refuse to take any tough action to balance the
budget until after an amendment is ratified? Won't passage of a
balanced budget constitutional amendment without this
information just give Congress an excuse not to act to cut the
deficit for years to come?
Supporters of the amendment also argue that if the
ratification process is delayed until Congress passes a
resolution spelling out how to balance the budget, the
amendment will never be submitted to the States for
ratification, because Congress will forever lack the nerve to
make the tough decisions necessary to balance the budget.
Congress does not lack the nerve to balance the budget;
some Members do. Not everyone voted for the irresponsible tax
cuts in 1981 that caused the deficit to balloon out of control;
not one of us did. In the past two years, with President
Clinton's leadership, Congress for the first time in more than
a decade has made impressive progress in shrinking the deficit.
Passage of his economic plan reduced by $500 billion for fiscal
years 1994-1998. For the first time since the Truman
Administration, deficits are projected to decline for three
years in a row. And the annual deficit has fallen from 4.9% of
gross domestic product to 2.4%.
Rather than tinkering with the Constitution that has served
Americans so well for over two hundred years, let us focus our
attention on reducing the deficit and building our economy to
enable our children and grandchildren to live in as prosperous
and secure a Nation as we inherited from our parents. Let us
put aside the balanced budget constitutional amendment as an
ineffective, ill-advised and pointless distraction from that
I. The Proposed Amendment Would Undermine the Separation of Powers
Under Our Constitution
As James Madison wrote in The Federalist No. 48, ``the
legislative department alone has access to the pockets of the
people.'' Our Constitution now gives Congress the primary
authority, and responsibility, with regard to the raising and
expenditure of outlays. Article I, section 7 stipulates that
``all Bills for raising Revenue'' must originate in the House
of Representatives; article I, section 8 grants Congress the
powers ``to lay and collect Taxes, Duties, Imposts and
Excises,'' and ``to borrow Money on the credit of the United
States; and article I, section 9 provides that ``[n]o Money
shall be drawn from the Treasury, but in Consequence of
Appropriations made by Law.''
The proposed amendment would dramatically alter the
allocation of powers set forth in the Constitution. It would
cast the State and Federal courts in the role of ``super Budget
Committees,'' deciding in myriad cases whether the Federal
budget is impermissibly out of balance, and where it is,
ordering spending cuts and revenue increases to remedy the
constitutional violation. And it would give the President broad
powers to impound appropriated funds or raise taxes.
A. The amendment would force the State and Federal courts to resolve
budgetary issues appropriately left to the elected branches of
In the memorable words of Chief Justice Marshall, ``[i]t
is, emphatically, the province and duty of the judicial
department, to say what the law is.'' Marbury v. Madison, 5
U.S. (1 Cranch) 137, 176 (1803). Since that historic decision,
the Supreme Court has had the preeminent role in defining the
scope and meaning of our Constitution.
If the proposed constitutional amendment were ratified, the
fulfillment of this role by the Supreme Court and the inferior
Federal and State courts would inevitably require them to
address complex budgetary issues that courts are singularly
ill-suited to resolve. As de Tocqueville wrote more than one
hundred forty-six years ago, ``Scarcely any political question
arises in the United States that is not resolved, sooner or
later, into a judicial question.'' \1\ If the proposed
constitutional amendment were ratified, several of its
provisions would give rise to cases and controversies that the
courts would be compelled to resolve.
\1\ Alexis de Tocqueville, Democracy in America, pt. I, ch. 16
Section 1 of the amendment contains a flat prohibition on
``total outlays'' exceeding ``total receipts'' in any fiscal
year by an amount greater than that specifically authorized by
a three-fifths vote of each House of Congress. What happens
when total outlays do exceed total receipts in a fiscal year,
and Congress fails to muster the votes, or the political will,
to authorize the excess?
Similarly, section 2 provides that ``[t]he 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.'' What happens when the government incurs obligations
that increase the debt, such as entering into loan guarantees,
or committing to clean up toxic waste sites, without the
requisite congressional supermajorities?
Disputes over these matters will inevitably wind up in the
State and Federal courts. Taxpayers will claim standing to sue
under Flast v. Cohen, 392 U.S. 83 (1968). There the Supreme
Court found that taxpayers had a standing to challenge
government spending that violated the Establishment Clause. It
ruled that taxpayer standing exists where the claim is that the
action in question ``exceeds specific constitutional
limitations imposed upon the exercise of the congressional
taxing and spending power and not simply that the enactment is
generally beyond the powers generally delegated to Congress by
Article I, section 8.'' Id. at 103 (emphasis added).
It may be argued that the proposed constitutional amendment
would impose exactly the kind of ``specific constitutional
limitations imposed upon the exercise of the congressional
taxing and spending power'' referred to in Flast. There is thus
a strong likelihood that a court would find that taxpayers have
standing to challenge alleged violations of the amendment.
In addition, the Houses of Congress, and individual members
of Congress will undoubtedly assert standing to challenge the
failure to obtain the requisite supermajorities. See, e.g.,
Burke v. Barnes, 479 U.S. 361 (1987); Kennedy v. Sampson, 511
F.2d 430 (D.C. Cir. 1974).
Even if courts were to reject taxpayer or congressional
standing, however, ample opportunities will exist for the
courts to resolve cases under the proposed constitutional
If a President impounds Social Security benefits to
avoid an unauthorized deficit, Social Security
recipients will surely have standing to sue.
If a President withholds a pay increase due Federal
workers in order to avoid an unauthorized deficit, the
workers will surely have standing to sue.
It total outlays exceed total receipts in a fiscal
year in an amount higher than that authorized by the
congressional supermajorities, then persons who suffer
injury by reason of those outlays will surely have
standing to sue.
These are but a few of the examples of disputes that will arise
in Federal courts around the United States if the proposed
constitutional amendment were adopted. Moreover, neither the
requirement of standing nor the political question doctrine
prevent state courts from resolving any of the myriad issues
that will be presented by the amendment.\2\
\2\ The political question doctrine will not prevent disputes under
the balanced budget constitutional amendment from reaching the courts
because none of the criteria laid down in Baker v. Carr, 369 U.S. 186
(1962), for determining whether a case presents a political question
are met. There is no textual commitment in the amendment to resolution
of disputes by the political branches; to the contrary, the amendment
is silent as to how it would be enforced.
Judicially manageable legal standards for resolving disputes are
not lacking.The amendment specifically prohibits ``total outlays'' from
exceeding ``total receipts'' in a fiscal year, except by an amount
specifically authorized by a three-fifths vote of each House of
Congress; and any increase in the debt limit must be authorized by a
There is no need for unquestioning adherence to a political
decision already made on the questions presented. Indeed, the very
reason why supporters of the proposal claim that a constitutional
amendment is needed is their view that the political branches cannot be
relied upon to balance the budget. Recent cases suggest a narrowing of
the political question doctrine. E.g., United States v. Munoz-Flores,
495 U.S. 385 (1990); Department of Commerce v. Montana, 112 S. Ct. 1415
For that reason, scholars as diverse in legal philosophy
and approach as Harvard University Law School Professor
Laurence H. Tribe and former Solicitor General and Federal
judge Robert Bork have opposed the balanced budget
constitutional amendment before us because it would embroil the
courts in endless lawsuits over its enforcement. As Judge Bork
The result * * * would likely be hundreds, if not
thousands, of lawsuits around the country, many of them
on inconsistent theories and providing inconsistent
results. By the time the Supreme Court straightened the
whole matter out, the budget in question would be at
least four years out of date, and lawsuits involving
the next three fiscal years would be slowly climbing
toward the Supreme Court.\3\
\3\ Robert H. Bork, ``On Constitutional Economics,'' AEI J. on
Gov't and Soc'y (Sept.-Oct. 1983), reprinted in ``Proposed Balance
Budget Constitutional Amendments: Hearings Before the Subcomm. on
Monopolies and Commercial Law of the House Comm. on the Judiciary,''
100th Cong., 1st Sess. 645, 649 (1987). See ``Constitutional Amendment
to Balance the Budget: Hearings Before the Comm. on the Budget,''
United States Senate, 102nd Cong., 2d Sess. 23-32 (1992) (hereafter
``1990 Budget Committee Hearings'') (statement of Professor Laurence H.
The questions that would be presented by the balanced
budget constitutional amendment litigation would inevitably be
complex, difficult, and expensive for the courts to address.
When a deficit is challenged as being greater than that
authorized by a congressional supermajority, a court would be
required to receive evidence on what constitutes an ``outlay,''
what constitutes a ``receipt,'' and on what amounts of each
were expended and received by the United States Government
during a particular fiscal year. The trial in each such case
could take years, years during which the status of the accounts
and obligations of the United States would be under a legal
In suits where a violation were found, courts would be
required to make remedial decisions that should properly be the
responsibility of the political branches. The authority of the
Federal courts to remedy constitutional violations is broad
indeed, as was demonstrated in Missouri v. Jenkins, 495 U.S. 33
(1990), where the Supreme Court upheld a court of appeals
decision setting forth the circumstances under which a Federal
district court could order a local jurisdiction to levy taxes
to pay for the cost of complying with an order remedying
unconstitutional school desegregation.
Should an across-the-board freeze on Federal spending be
ordered? Should spending cuts be targeted so as to minimize the
resulting harm? If so, which programs should be cut and by how
much? Should Congress be ordered to raise taxes to remedy the
constitutional violation? These are but few of the questions
that courts would be called upon to answer in proceedings to
establish the appropriate remedy for a violation of the
proposed constitutional amendment.
That the amendment is likely to be construed to authorize
courts to enjoin spending and order taxes to be raised is
confirmed by the omission from S.J. Res. 1 of the language of
the Danforth Amendment that was adopted as part of S.J. Res. 41
when the latter measure was before the Senate in the 103rd
Congress. That amendment added to section 6 of the proposal the
The power of any court to order relief pursuant to
any case or controversy arising under this Article
shall not extend to ordering any remedies other than a
declaratory judgment or such remedies as are
specifically authorized in implementing legislation
pursuant to this section.\4\
\4\ 140 Cong. Rec. S2089 (March 1, 1994).
The absence of such language in the pending proposal strongly
supports the view that S.J. Res. 1 would authorize the courts
to order cuts in spending and increases in taxes to remedy
In The Federalist No. 78, Alexander Hamilton described the
judiciary as ``the least dangerous branch'' because it ``has no
influence over either the sword or the purse, no direction
either of the strength or the wealth of the society.'' He then
qualified his description, quoting Montesquieu as warning
``that `there is no liberty, if the power of judging be not
separated from the legislative and executive powers.' ''
Adopting a balanced budget constitutional amendment would
create precisely the peril warned against by Hamilton, because
it would force unelected judges to decide policy questions of
this kind, and in so doing to exercise powers heretofore
largely reserved to the legislative and executive branches. It
would be a mistake of historic proportions to ignore Hamilton's
warnings and enact such a proposal.
The Committee majority suggests that problems raised by the
prospect of judicial enforcement could be addressed in the
enforcement legislation required by section 6, in which, they
assert, Congress could limit courts' role in the balanced
budget constitutional amendment cases. But as former Solicitor
General Fried has testified, if Congress attempted through
legislation passed pursuant to section 6 to eliminate Federal
court jurisdiction of questions arising under the balanced
budget constitutional amendment, ``that limitation itself might
very well be unconstitutional.'' ``Balanced Budget Amendment--
S.J. Res. 41: Hearings Before the Senate Comm. on
Appropriations,'' 103rd Cong., 2d Sess. 84 (1994) (hereinafter
``1994 Appropriations Committee Hearings'').
The majority's argument is also inconsistent with the
approach that the Federal courts have taken under other
constitutional amendments. When legislation enacted by Congress
did not provide an effective remedy for a constitutional
violation, the courts have found the existence of other,
judicial remedies. See, e.g., Bivens v. Six Unknown Named
Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971);
Davis v. Passman, 442 U.S. 228 (1979); Carlson v. Green, 446
U.S. 14 (1980). Thus, if Congress were to adopt enforcement
legislation that failed to provide an effective remedy for
violations of the amendment, there is every reason to believe
that the courts would permit a judicial remedy.
The Committee majority also asserts that the experience of
state courts in enforcing state constitutional balanced budget
requirements suggests that fears of excessive judicial
involvement in the enforcement of the Federal balanced budget
constitutional amendment are unwarranted. But as former
Solicitor General Charles Fried has testified, ``[t]he
experience of state court adjudication under state
constitutional provisions that require balanced budgets and
impose debt limitations shows that courts can get intimately
involved in the budget process and that they almost certainly
will.'' 1994 Appropriations Committee Hearings at 86. General
Fried went on to state that while ``the greatest part of
[state] litigation has dealt with the validity of debt
instruments issued to supplement budgets that would otherwise
have been out of balance, ``[t]here is no reason to believe
that litigation under a Federal balanced budget amendment would
be so confined.'' \5\
\5\ See also letter from Assistant Attorney General Walter
Dellinger to Chairman Orrin Hatch, January 9, 1995 (discussing state
court experience and reaching the same conclusion as General Fried).
B. The amendment would give the President broad powers to impound
That the balanced budget constitutional amendment would
authorize the President to impound funds appropriated by
Congress is clear from the text of the Constitution and the
proposed amendment. Article II, section 3, obligates the
President to ``take care that the Laws be faithfully
executed,'' and article II, section 7, requires the President
to take an oath to ``preserve, protect and defend the
Section 1 of the proposed constitutional amendment provides
that ``[t]otal 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.'' The amendment thus would forbid outlays from exceeding
revenues by more than the amount specifically authorized by a
three-fifths supermajority of each House of Congress. In any
fiscal year in which it is clear that in the absence of
congressional action, ``total outlays'' will exceed ``total
receipts'' by a greater-than-authorized amount,\6\ the
President is bound by the Constitution and the oath of office
it prescribes to prevent the unauthorized deficit.
\6\ Such an excess can occur for a wide range of reasons: Congress
may lack the political will to cast a vote authorizing a deficit as
large as the one it actually anticipates; or unanticipated drops in
revenue or increases in expenditures may result from natural disasters
or the vagaries of the business cycle.
The powers and obligations conferred upon the President by
the Constitution and the proposed constitutional amendment
would clearly be read by the courts to include the power to
impound appropriated funds where the expenditure of those funds
would cause total outlays to exceed total receipts by an amount
greater than that authorized by the requisite congressional
This commonsense reading of the proposed constitutional
amendment is shared by a broad range of highly regarded legal
scholars. Assistant Attorney General Walter Dellinger, who as
head of the Office of Legal Counsel at the Department of
Justice is responsible for advising the President and the
Attorney General regarding the scope and limits on presidential
authority, testified before the Judiciary Committee that the
proposed constitutional amendment would authorize the President
to impound funds to insure that outlays do not exceed
receipts.\7\ Similarly, Harvard University Law School Professor
Charles Fried, who served as Solicitor General during the
Reagan Administration, testified that in a year when actual
revenues fell below projections and a bigger-than-authorized
deficit occurred, section 1 ``would offer a President ample
warrant to impound appropriated funds.'' \8\ Others who share
this view include former Attorney General Nicholas deB.
Katzenbach,\9\ Stanford University Law School Professor
Kathleen Sullivan,\10\ Yale University Law School Professor
Burke Marshall,\11\ and Harvard University Law School Professor
Laurence H. Tribe.\12\
\7\ 1995 Hearings at 99.
\8\ 1994 Appropriations Committee Hearings at 86.
\9\ 1994 Appropriations Committee Hearings at 166 (``the proposed
amendment provides a powerful constitutional argument for a
Presidential right to impound grounded in the language of section 1 * *
\10\ 1994 Appropriations Committee Hearings at 182.
\11\ 1994 Appropriations Committee Hearings at 204-05.
\12\ 1990 Budget Committee Hearings at 26-27.
The fact that the proposed constitutional amendment would
confer impoundment authority on the President is confirmed by
the actions of the Judiciary Committee this year. Supporters of
the amendment opposed and defeated an amendment offered by
Senator Kennedy before the Judiciary Committee that would have
added the following section to the proposed amendment:
Section . Nothing in this article shall authorize
the President to impound funds appropriated by Congress
by law, or to impose taxes, duties or fees.\13\
\13\ The amendment was tabled by a vote of 11-5, with Senators
Hatch, Thurmond, Simpson, Grassley, Brown, Thompson, Kyl, Abraham,
DeWine, Simon and Heflin voting in favor of tabling the amendment, and
Senators Biden, Kennedy, Leahy, Kohl, and Feingold voting against
If the supporters of the proposed constitutional amendment do
not intend to give impoundment authority to the President,
there is no legitimate explanation for their failure to include
the text of the Kennedy amendment in the proposed article.
The impoundment power that would be conferred on the
President by the proposed constitutional amendment is far
broader than any proposed presidential line-item veto authority
now under consideration by the Congress. The line-item veto
proposals would allow a President to refrain from spending
funds proposed to be spent by a particular item of
appropriation in a particular appropriations bill presented to
the President. As Assistant Attorney General Dellinger
testified, the impoundment authority conferred upon the
President by the proposed constitutional amendment would allow
a President to order across-the-board cuts in all Federal
programs, target specific programs for abolition, or target
expenditures intended for particular States or regions for
\14\ 1995 Judiciary Committee Hearings at 100.
The Committee majority makes two arguments to support its
assertion that the balanced budget constitutional amendment
does not give the President impoundment authority. Both are
The first is the suggestion that ``up to the end of the
fiscal year, the President has nothing to impound because
Congress in the amendment has the power to ratify or to specify
the amount of deficit spending that may occur in that fiscal
year.'' In essence, the majority asserts that there will never
be an unauthorized, and therefore unconstitutional, deficit,
because Congress will always step in at the end of the year and
ratify whatever deficit has occurred. If true, then the
balanced budget is a complete sham, because it would impose no
fiscal discipline whatsoever.
But if the majority is wrong in its prediction--that is, if
a Congress failed to act before the end of a fiscal year to
ratify a previously unauthorized deficit, all of the
expenditures undertaken by the Federal government throughout
the fiscal year would be unconstitutional and open to challenge
in the state and Federal courts (see part I.A, supra). It is
inconceivable that the President, sworn to preserve, protect
and defend the Constitution, would be found to be powerless to
prevent such a result.
Second, the majority argues that ``under section 6 of the
amendment, Congress can specify exactly what type of
enforcement mechanism it wants and the President, as Chief
Executive, is duty bound to enforce that particular
congressional scheme to the exclusion of impoundment.'' The
fact that Congress is required by section 6 of the proposed
amendment to enact enforcement legislation certainly does not
suggest that the amendment itself would not grant the president
authority to impound appropriated funds. Nothing in the
proposed article stipulates that the enforcement legislation
must be effective to prevent violations of the amendment.
Indeed, there is every reason to believe that no enforcement
legislation could prevent violations from occurring.\15\
\15\ Even when Congress authorizes a specific deficit in advance,
an unanticipated circumstance, such as a deterioration in economic
conditions or an earthquake or other natural catastrophe, may cause
revenues to drop below expectations while outlays increase. The result
would be a deficit larger than the one authorized by Congress. No
enforcement legislation enacted by Congress can eliminate the business
cycle or outlaw unanticipated events such as natural disasters, wars,
and other catastrophes.
The President's obligation to faithfully execute the laws
is independent of Congress's. That duty is not ``limited to the
enforcement of acts of Congress * * * according to their
express terms, * * * it include[s] the rights, duties and
obligations growing out of the Constitution itself, * * * and
all the protection implied by the nature of the government
under the Constitution[.]'' In re Neagle, 135 U.S. 1, 64
(1890). If an unconstitutional deficit were occurring, Congress
could not constitutionally stop the President from seeking to
\16\ See 1994 Appropriations Committee Hearings at 182 (testimony
of Professor Kathleen Sullivan) (``this amendment if enacted would, of
course, be constitutional law, fundamental law. It would trump [the
Impoundment Control Act of 1974] or any other statute designed to
umpire disputes between the President and Congress * * *'').
Kendall v. United States ex rel. Stokes, 37 U.S. (12 Pet.) 524
(1838), cited by the committee majority, actually supports the view
that the balanced budget constitutional amendment would grant
impoundment authority to the President. In that case, Congress had
ordered the Postmaster General to pay the claimant whatever sum an
outside arbitrator determined was the appropriate settlement. When the
Postmaster General paid a smaller amount that he deemed to be an
appropriate settlement, the Supreme Court held that the Postmaster
General could be ordered to comply with the congressional directive.
The Court ruled that the President, and those under his supervision,
did not possess inherent authority to impound funds that Congress had
ordered to be spent: ``To contend that the obligation imposed on the
President to see the laws faithfully executed, implies a power to
forbid their execution, is a novel construction of the constitution,
and entirely inadmissible.'' Id. at 611. But if the balanced budget
constitutional amendment were part of the constitution, the President's
obligation ``to see the laws faithfully executed'' would itself
authorize the President to take necessary acts, including impounding
appropriated funds, to ensure that the amendment's balanced-budget
requirement were obeyed.
C. The proposed amendment many also confer upon the President the
authority to impose taxes, duties and fees
As discussed above, when a greater-than-authorized deficit
occurs, the balanced budget constitutional amendment would
impose upon the President an obligation to stop it. While
greater attention has been paid to the prospect that the
amendment would grant the President authority to impound
appropriated funds, the amendment would enable future
Presidents to assert that they have the power unilaterally to
raise taxes, duties or fees in order to generate additional
revenue to avoid an unauthorized deficit. See Testimony of
Assistant Attorney General Walter Dellinger, 1995 Judiciary
Committee Hearings at 102.
This outcome would turn on its head the allocation of
powers envisioned by the Framers. No longer would ``the
legislative department alone ha[ve] access to the pockets of
the people'' as Madison promised in The Federalist No. 48.
Instead, intermixing of legislative and executive power in the
President's hands would constitute the ``source of danger''
against which Madison warned.
D. No amendment should be proposed before the enforcement legislation
called for by section 6 is considered
Despite the contention of the Committee majority that the
proposed constitutional amendment ``is self-enforcing,'' it is
clear that the amendment is anything but that. The amendment
sets forth no procedure for enforcing the balanced-budget
requirement in section 1. If ``total outlays'' exceed ``total
revenues'' in any fiscal year by an amount greater than that
specified by the requisite supermajority vote by each House of
Congress, what happens?
May the President impound funds appropriated by
Congress in order to avoid such a deficit?
Can a Social Security recipient whose check is
impounded file suit in State or Federal court to
challenge the impoundment?
Can the President refuse to pay interest on Treasury
bonds, because doing so would add to the deficit?
Can a bondholder file suit to recover?
Can a State or Federal court enjoin government
spending to eliminate the unauthorized deficit?
Can a State or Federal court order Congress to raise
taxes to eliminate the unauthorized deficit?
May the President raise taxes or fees in order to
eliminate an unauthorized deficit?
The balanced budget constitutional amendment itself contains no
answer to any of these questions.
The Committee majority responds by claiming that the
enforcement legislation required by section 6 will provide
answer to all questions about how the balanced budget
constitutional amendment would be enforced. But although
balanced budget constitutional amendments have been before the
Judiciary Committee and the Congress for the past fifteen
years, the supporters of an amendment have steadfastly declined
to make available proposed enforcement legislation.
For that reason, Senator Kennedy offered an amendment
before the Judiciary Committee providing that the proposed
constitutional amendment should not be submitted to the States
for ratification until ``the enactment of legislation
specifying the means for enforcing the provisions of the
amendment.'' The supporters of the balanced budget
constitutional amendment opposed the Kennedy amendment, and it
was tabled by a vote of 12-5.\17\
\17\ Senators Hatch, Thurmond, Simpson, Grassley, Brown, Thompson,
Kyl, DeWine, Abraham, Simon, Heflin and Kohl voted to table the Kennedy
amendment; Senators Biden, Kennedy, Leahy, Feinstein and Feingold voted
In the past decade, Congress has repeatedly enacted
legislation establishing binding procedures for limiting the
deficit. These include the so-called Gramm-Rudman-Hollings law
of 1986, as well as the 1990 and 1993 reconciliation laws.
There is thus absolutely no justification for the persistent
refusal of supporters of the proposed constitutional amendment
to offer enforcement legislation.\18\
\18\ There is solid precedent for passing enforcement legislation
before a constitutional amendment is ratified. When the Eighteenth
Amendment was pending, Congress passed the Volstead Act (to take effect
upon ratification of the Amendment).
E. Proposing a balanced budget constitutional amendment that was
enforceable only by Congress would be a serious mistake
When confronted with the above problems with the balanced
budget constitutional amendment, the measure's supporters
sometimes assert that Congress would or should be given
exclusive authority to enforce the amendment. But even if
Congress were given exclusive enforcement authority, and the
courts and the President were given absolutely no role, passage
of a constitutional amendment would be a serious mistake.
The central premise of the supporters' argument for a
constitutional amendment is that Congress cannot be trusted to
make the tough decisions necessary to balance the budget. By
their reasoning, giving Congress the exclusive power to
determine whether a violation of the balanced budget
constitutional amendment has occurred would thus be putting the
proverbial fox in charge of the chicken coop.
Supporters of the amendment respond that if a balanced
budget requirement were included in the Constitution, then
Congress would be more likely to obey it. But Congress has
certainly been known to violate the Constitution. Indeed, the
Supreme Court has found that Congress has violated the
Constitution in no fewer than 125 cases.\19\
\19\ ``The Constitution of the United States of America: Analysis
and Interpretation'' (J. Killian & G.A. Costello eds.) 1885-1912 and
1990 Supp. at 239-242.
In these circumstances, giving Congress exclusive authority
to enforce the balanced budget constitutional amendment would
be tantamount to enacting an unenforceable constitutional
amendment. When the American public learns that there is no
meaningful sanction for violating the constitutional
requirement, the result would be understandable cynicism about
the Constitution and the rule of law. Because so much of the
public's lack of faith in our governmental system already
results from the failure of many in Congress to confront the
deficit, it would be a tragic mistake to compound that loss of
faith by placing an unenforceable promise in the Constitution.
ii. congress should pass a concurrent resolution spelling out how to
get to a balanced budget before any amendment is sent to the states
The proposed constitutional amendment suffers an essential
defect: it does not balance the budget nor outline a single
spending cut or tax increase. As the distinguished economist
Herbert Stein, who was Chairman of the Council of Economic
Advisors during the Nixon Administration, noted in his
testimony before the Committee:
Objection to a balanced budget amendment is not an
objection to balancing the budget. It is, instead,
objection to using an appeal to a traditional symbol as
a smoke-screen behind which to hide unwillingness to
face our real problems.
The Constitution is our great national contract, intended
to bind our Nation now and for generations to come. Before the
people are asked to support a change in that contract, they are
entitled to read the fine print and to see a specific plan of
action. Professor Stein was right when he said:
I believe it is basically improper and unfair to
propose a balanced-budget amendment without revealing
how the balance would, or might, be achieved--by what
combination of expenditure cuts and tax increases. I do
not think the American people should be asked to commit
themselves to a Constitutional limit on their future
decisions without knowing what would be involved.
A specific plan of deficit reduction is the only way the
budget will be balanced, and conditioning the proposed
constitutional amendment on enactment of such a plan will do
what the supporters of the proposed constitutional amendment
state is their goal: force Congress to make the tough decisions
needed to eliminate the deficit.
During the Judiciary Committee's markup, Senator Feingold
offered an amendment to require a specific plan of action. The
Feingold amendment would have required that before a proposed
constitutional amendment is submitted to the States, Congress
must first adopt a concurrent resolution outlining a budget
plan for each of the fiscal years from fiscal year 1996 through
to the first fiscal year in which the proposed amendment would
take effect. That budget plan would have required a detailed
list, description, and effective date of the spending cuts or
revenue increases, and the resulting changes in Federal law
required to carry out the plan.
But the supporters of the amendment refused to require that
a specific plan be spelled out. The Feingold amendment was
rejected in Committee by a vote of 12 to 5.\20\
\20\ Senators Hatch, Thurmond, Simpson, Grassley, Brown, Thompson,
Kyl, DeWine, Abraham, Simon, Heflin and Kohl voted to table the
Feingold amendment; Senators Biden, Kennedy, Leahy, Feinstein and
Feingold voted against tabling.
Supporters of the proposed constitutional amendment assert
that a constitutional mandate is necessary to prod lawmakers
into doing what they are otherwise unwilling to do. According
to this logic, a constitutional requirements of a balanced
budget would give lawmakers the backbone to make the requisite
tough decisions because they will be able to tell angry
constituents: ``The Constitution made me do it.''
This flawed and cynical view of our political process
ignores its own logical conclusion: those who require the
political cover of a constitutional amendment to make the tough
decisions necessary to balance the budget are unlikely to make
those decisions until that constitutional amendment is in
force. This would mean that no specific deficit reduction plan
would be offered until after the States have ratified the
amendment, and the amendment were in effect, i.e., fiscal year
2002 at the earliest, or possibly not until 2004.
Indeed, under the supporters' reasoning, Congress would
have but two years to achieve a balanced budget if the
amendment were ratified any time after 1999. The so-called
glide path needed to balance the budget would turn into an
economic kamikaze dive.
Without a specific deficit reduction plan before us,
Congress could adopt the proposed amendment, declare victory,
and do nothing until 2002. Those same lawmakers who refuse to
propose a specific plan of action concurrent with a
constitutional amendment would declare victory in the war on
the deficit and hide behind a smokescreen, as professor Stein
suggested. Holding Congress' proverbial feet to the fire by
forcing formulation of a specific plan before the proposed
amendment is sent to the States would prevent delay and evasion
on balancing the budget.
Equally important, a specific deficit reduction plan would
provide the voters, local; government officials, and State
legislators with the minimum information they need before
considering whether to ratify this proposed amendment. They are
entitled to know what the supporters of the proposed
constitutional amendment intend to do to achieve a balanced
budget by 2002 before they modify the Constitution of the
United States to require that action.
Indeed, the effort to reduce the deficit could be severely
jeopardized without the broad-based support of the Nation. In
the end, without popular support, a plan that makes the
difficult decisions necessary to achieve a balance budget would
be rejected by the American people.
House Majority Leader Richard Armey, a strong supporter of
the proposed constitutional amendment, offered one explanation
for the supporters' refusal to offer a detailed budget
reduction plan, stating that if Members of Congress knew what
it took to comply with the proposal, ``their knees will
buckle.'' \21\ He also is reported to have said that ``putting
together a detailed list beforehand would make passing the
balanced budget amendment virtually impossible.'' \22\
\21\ CNN Late Edition, January 8, 1995.
\22\ Washington Times, January 7, 1995, at A1.
Treating the process by which we amend our Constitution as
a game, with the cards held close to the vest, does a
disservice to our Nation. Proponents of this amendment must
deal honestly and forthrightly with the American people if they
hope to persuade them that this amendment to our Constitution
A specific plan to reduce the deficit should be passed
before any constitutional amendment requiring a balanced budget
is forwarded to the states for ratification. Such a budget
reduction plan would not only serve as a safeguard against
later inaction, but also ensure that Congress deals with the
American people in a manner that does not invite additional
cynicism and frustration with their elected representatives.
iii. the balanced budget amendment will shift burdens to state and
The proposed constitutional amendment, in the form of S.J.
Res. 1, is a prescription for shifting of financial burdens to
State and local governments. Cost shifting to State and local
governments will be an irresistible impulse--the easy way out
of our Federal deficit. Consequently, State and local leaders
rightfully fear that ratification of the proposed
constitutional amendment would result in a massive shift of the
Federal Government's responsibilities and financial
requirements to the shoulders of State and local governments
and the pocketbooks of State and local taxpayers.
Governor Michael O. Leavitt, of Utah, testified that
consideration of the proposed amendment and of its likely
effect on the States are linked, that ``the two topics cannot
be separated.'' \23\ Nevertheless, the Committee majority
simply ignore this issue, apparently because addressing the two
issues together would, in the words of one supporter,
``needlessly complicate the debate.'' \24\
\23\ 1995 Judiciary Committee Hearings at 3 (statement of Honorable
Michael O. Leavitt).
\24\ Response of the U.S. Chamber of Commerce to written questions
propounded by Senator Leahy.
Complicated issues do not disappear, however, simply
because we ignore them. The impact of a constitutional
amendment on State and local governments would not go away, and
it must not be ignored. State and local governments should not
be left holding the bag and having to raise their taxes so that
the Federal government can appear to pare its deficit.
A. Ratification of the proposed amendment would result in the
imposition of greater financial burdens on State and local
In its January 19, 1995 letter to the Committee analyzing
the impact of the proposed constitutional amendment, the
Congressional Budget Office notes:
[S]teps to reduce the deficit so as to meet the
requirements of this amendment could include cuts in
Federal grants to states, a smaller Federal
contribution towards shared programs or projects, an
increased demand for state and local programs to
compensate for reductions in Federal programs, and/or
an increase in Federal mandates imposed on states or
Can anyone honestly deny that this balanced budget
amendment will likely shift burdens to State and local
government? We need only remember our recent history: In the
1980s, tax reductions for the wealthy and a bloated defense
budget resulted in burgeoning deficits and massive reductions
in the amounts of Federal grants and assistance to the States.
The Senate Committee on Governmental Affairs reports that
Federal aid to State and local governments fell sharply in the
1980s. Indeed, during those years, Federal funds went from
18.6% of State and local revenues to only 13.2%, a drop of
almost one-third. S. Rep. No. 104-1, 7-8. In order to meet the
critical needs that were left unmet by these Federal
reductions, local and State property and other taxes had to be
increased in many States across the country.
If the proposed constitutional amendment were ratified, we
would likely enter another period in which State and local
taxes were significantly increased to pay for the shifts in the
cost burdens and State and local government being left to catch
those who fall through a shredded Federal ``safety net'' of
nutrition, housing, education and medical care programs.
As Governor Roy Romer, of Colorado, cautioned in his
testimony before the Constitution Subcommittee earlier this
year: ``Before we take on that kind of burden [from the
balanced budget amendment], the people of Colorado need to
understand the impact such a burden will have on their daily
\25\ Hearings on Balanced Budget/Unfunded Mandates before the
Senate Judiciary Subcommittee on the Constitution, 103rd Cong., 2nd
Sess. (January 3, 1995) (Statement of Honorable Roy Romer at 2).
This is the ultimate budget gimmick--passing the buck to
the States. The U.S. Treasury Department recently released a
study of what may happen to State and local taxes under the
proposed constitutional amendment. Assuming that Social
Security and defense cuts were ``off the table,'' the Treasury
Department's analysis predicts cuts in Federal grants to States
of $71.3 billion and cuts of an additional $176.4 billion in
other Federal spending that directly benefits State residents
in such programs as Medicaid, highway funds, Aid To Families
With Dependent Children (AFDC), education, job training,
environment, housing and other areas.
The Treasury Department also estimated how much each
State's taxes would have to be raised if the State attempted to
offset the reduction in Federal grants necessitated by passage
of the proposed constitutional amendment.\26\ As the following
chart shows, the results are startling.
\26\ Letter from Joyce Carrier, Deputy Assistant Secretary for
Public Liaison, Department of Treasury to the Honorable Howard Dean,
Chairman, National Governor's Association (January 12, 1995).
Balanced budget amendment--Impact on States required State tax increases
State Required State tax increase in percent
New Jersey.................................................... 12.7
New Mexico.................................................... 12.9
New York...................................................... 17.4
N. Carolina................................................... 11.1
N. Dakota..................................................... 19.7
S. Carolina................................................... 14.3
S. Dakota..................................................... 24.7
W. Virginia................................................... 20.6
A February 1994 study by the Wharton Econometrics
Forecasting Associates likewise concludes that a balanced
budget amendment would devastate the States' economies. In
particular, the study found that such an amendment would cause
severe job losses--an average of 135,000 jobs lost per State by
2003--and a drastic cut in personal income--an average of 13.5%
Reduction of the Federal deficit should not be financed by
unfairly increasing the burdens or other jurisdictions and
requiring our partners in State and local government to pay for
the profligate budgetary practices of the Federal Government.
Most importantly, working people can afford tax increases no
more easily simply because they are imposed by State and local
authorities, rather than by the Federal government.
Governors, local authorities and the people of every State
are correctly concerned about the potential ``double whammy''
of S.J. Res. 1: increased shifting of responsibility from the
Federal Government to State and local governments, at the same
time that direct Federal assistance is being reduced or
terminated. Mayor Jeffrey N. Wennberg, of Rutland, Vermont,
testifying this month on behalf of the National League of
Cities, warned that ``[a]ny balanced budget amendment would
almost certainly increase unfunded mandates on cities and towns
as well as decrease what little Federal assistance currently
remains to fund existing mandates.''\27\
\27\ H.J. Res. 1: Hearings before the House Judiciary Subcommittee
on the Constitution, 104th Cong., 1st Sess. (1995) (statement of
Honorable Jeffrey N. Wennberg at 5) (hereinafter House Judiciary
B. No statutory ban on unfunded mandates can bind Congress
Legislation such as S.1, the so-called ``Unfunded Mandate
Reform Act of 1995,'' offers minimal protection from the likely
shift of burdens to State and local government. Even if
enacted, S. 1 would not become effective until 1996 and, by its
terms, applies only to legislation introduced on or after it
becomes effective. It would not apply to current legislation
and programs or to unmet needs that arise from cutbacks in
As Governor Roy Romer recently testified:
[T]he Governors are concerned that attempts to
balance the Federal budget will come at the cost of
states and localities. I appreciate that we may see a
Federal provision protecting state and local
governments from new unfunded mandates. But this will
not protect us from having to pickup the cost of
programs, such as child care, mass transit and
education, that were previously supported with Federal
\28\ Senate Judiciary Subcommittee Hearings (statement of Honorable
Roy Romer at 2).
Moreover, it is axiomatic that mere legislation restricting
unfunded Federal mandates cannot prevent Congress from waiving
or ignoring that legislation in order to comply with a
constitutional mandate for a balanced Federal budget. Governor
Michael O. Leavitt analogized unfunded mandates legislation to
a ``barrier of sand bags'' that will not hold up against a
balanced budget amendment, which is ``a structural barrier of
concrete and steel.''\29\
\29\ 1995 Judiciary Hearings (statement of Honorable Michael O.
Leavitt at 3).
Legislation by its nature is subject to modification or
waiver by passage of legislation by a simple majority in
Congress. It is not irrevocably binding on future Congresses.
Mayor Wennberg predicted that ``[t]he pressure to order state
and local spending will grow geometrically under a balanced
budget amendment unless an equally powerful restriction on
[unfunded Federal] mandates is enacted.''\30\In the absence of
constitutional protection against unfunded Federal mandates,
Governor Howard Dean of Vermont, the Chairman of the National
Governors Association, described ``a vote for such a balanced
budget amendment as a vote to raise state and local
\30\ House Judiciary Hearings, (statement of Honorable Jeffrey N.
Wennberg at 1).
\31\ Governor Howard Dean, ``Trickle-Down Tax Increase,''
Washington Post, January 19, 1995, at A25.
In light of these concerns, it would irresponsible for
Congress to propose a constitutional amendment before it has
determined how the requirements of the amendment will be
implemented, how the State will be affected, how our
partnership with State and local government will be altered,
and what kinds of additional responsibilities and financial
burdens State and local governments will be called upon to
meet. See part II, supra.
We ill serve our State and local governments, and
ultimately our constituents, by not considering and not
assembling the information necessary for them to consider the
likely impact at the State and local level of ratification of
the proposed constitutional amendment. Before they consider
such an amendment, they have a right to know how we in the
Congress intend to meet out obligations to eliminate Federal
deficits under this constitutional amendment, given that the
manner by which we do so will likely affect their
responsibilities and increase their burdens for many years to
come. And they have a right to know what additional
responsibilities ratification of this constitutional amendment
would likely impose on them.
iv. the proposed constitutional amendment is unsound economic policy
That a balanced budget amendment is unsound economic policy
is a view shared by a hundreds of the Nation's most respected
economists, including at least seven Nobel Laureates, as well
and present and former government officials, including the
former Chair of President Nixon's Council of Economic Advisors,
Herbert Stein, and the current Director of the Office of
Management and Business, Alice Rivlin.
A. The proposed amendment would hamper the government's ability to deal
with recessions and natural disasters
Tying the Nation's fiscal policy, and with it the economic
prosperity of its citizens, to the arbitrary political schedule
of Congress is both futile and reckless. The proposed
constitutional amendment can no more prevent a recession than
it can an earthquake, but it can restrict our ability to deal
with the effects of both. The constitutional straitjacket in
which the advocates for the proposed amendment would put our
national economic policy could well be disastrous.
In a March 1993 report, the General Accounting Office
detailed the dire implications for our Nation's economy if the
balanced budget amendment were ratified:
The Federal budget's unique macroeconomic role could
be compromised by a strict balanced budget mandate. For
example, the federal budget acts as an automatic
stabilizer during economic downturns primarily because
spending is maintained as revenue declines, but also
because spending for unemployment assistance and other
forms of aid rises. However, it could be turned into a
destabilizing influence if the mandated response to a
recession were an automatic spending cut or tax
increase that could only be overridden by a three-
fifths majority vote, as proposed in recent amendments.
Although the Committee majority outlines the dangers of a
budget deficit, their report fails to address how the proposed
amendment will affect the Federal Government's ability to
stabilize our economy during times of economic stress. It
ignores the testimony of OMB Director Rivlin at this year's
[E]nforcing a rule that we must balance the budget
every year, regardless of the state of the economy,
would be a big economic mistake. Now one can think
that, and still think that budget deficits ought to be
much smaller than they are now, and I do believe that.
But if we were living in a world in which the budget
had to be balanced every year, when a recession
threatened--and we have not repealed the business cycle
and I do not know how one would do that--when a
recession threatened, and people were laid off, they
would naturally be paying less taxes.
So there would be an automatic deficit in the Federal
budget. Now, if the Congress were then required to
rectify that by either cutting spending, or raising
taxes, the recession would be worse. People would have
less income. More people would be laid off. The
Congress might have to cut back on unemployment
benefits, and things like that.
So you would have exactly the wrong kind of fiscal
policy in a recession. Now, you might say three-fifths
of the Congress could be wise enough to foresee that,
and do something about it, even if the amendment were
But forecasting is very uncertain. Even people who do
it professionally, full time, are not very good at it,
and the Congress of the United States is unlikely to be
very good at it.
So I think we would have worse recessions, and it
would just exaggerate the boom/bust cycle if we had to
balance every year.\32\
\32\ 1995 Judiciary Committee Hearings at 97-98 (emphasis added).
Similarly, a natural disaster, such as a large-scale flood,
earthquake or fire, could require the Federal government to
expend large sums to assist the victims and begin to rebuild
the ravaged area. The proposed constitutional amendment would
make these kinds of sudden emergency expenditures difficult, if
not impossible, because they would cause an unauthorized
increase in the deficit. Humanitarian efforts could and would
be held hostage while the requisite supermajorities were
rounded up in each House of Congress; and a minority in either
House could block such efforts altogether or extort other
benefits from the majority.
B. The proposed constitutional amendment would undermine the value of
treasury bonds and drive up interest costs paid by the federal
Section 2 of the proposed constitutional amendment provides
that ``[t]he 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 rollcall vote.'' As Deputy Secretary of the Treasury Frank
Newman explains in a letter to Senator Sarbanes, this
supermajority requirement will hamper the ability of the
Federal government to finance the debt and increase the
interest costs paid by the government, and the taxpayers.
First, the proposed Amendment's requirement for a
three-fifths majority of each House to raise the debt
limit raises significant problems for the stability and
cost of Treasury financing because a minority in either
House could hold our Government's finances hostage.
The Treasury sells over $2 trillion of debt each
year, mainly to refinance maturing debt issues, as well
as to finance the deficit and other cash needs.
Increasing market uncertainty about our ability to sell
debt would increase Treasury's interest rates and
thereby increase the interest expense for taxpayers.
Interruptions in our legal ability to sell debt could
risk default on the Government's financial and
programmatic obligations, with negative financial,
economic, legal, and human consequences.
Second, even if the budget is fully balanced, the
proposed debt limit provision of the Amendment would be
virtually unworkable. There are legitimate reasons for
the debt to increase even with a balanced budget, and a
constitutionally constrained limit could create
significant problems in financing Congressionally
mandated programs even after these programs have been
fully authorized, appropriated and accounted for in the
balanced budget. Cash requirements, and the
corresponding debt issuance, can vary from year to year
due to timing mismatches in outlays and receipts and
the vagaries of the calendar. * * *
Third, cash requirements can vary from one fiscal
year to the next. In the area of federal deposit
insurance, for example, it is difficult to estimate the
timing and cost of bank and thrift failures. Also,
resolving bank or thrift failures requires the deposit
insurer to have working capital funds in order to hold
assets in some years until they can be sold to recover
the Government's funds in subsequent years. These
potentially large and unpredictable changes would
affect outlays and debt subject to limit and would
complicate efforts to balance the budget each year. * *
Finally, the Amendment's provisions would make it
harder to pass programs with least-cost financing and
easier to pass programs in forms which can cost the
taxpayers real money. For example, because of our lower
cost of financing compared with other borrowers,
purchasing essential capital assets is usually cheaper
for the Government than leasing over several years, but
a purchase would have a bigger one-time impact on the
budget, as well as on the debt limit. Additionally,
more costly off-budget mechanisms, such as Refcorp,
could be exempt from the three-fifths requirement.\33\
\33\ Letter from Deputy Secretary of the Treasury Frank N. Newman
to Senator Paul Sarbanes, January 20, 1995.
It is thus ironic, but true, that because of the
supermajority requirement for increasing the debt limit, the
proposed constitutional amendment could significantly increase
the cost of refinancing the debt, and thereby exacerbate the
C. The experience of the atates does not support passage of the
proposed constitutional amendment
The Committee majority ignores the inevitable negative
consequences of the proposed constitutional amendment. It
points instead to the experience of the forty-eight States that
have balanced budget requirements. But for the reasons stated
below, using the States as models for the impact of the
proposed constitutional amendment is inappropriate, however.
The States do not have the critical role in forming
national economic policy and in stabilizing our economy that
the Federal government has, nor are they responsible for
overseeing a foreign policy or our national defense.
Moreover, the States are hardly the model of responsible
budgeting that advocates for the proposed constitutional
amendment suggest they are. Mr. Edward V. Regan, who was New
York State Comptroller from 1979 through 1993, told the
Committee that state balanced-budget requirements ``have tended
to push public officials into manipulative actions and outright
\34\ Statement of Edward V. Regan, 1995 Judiciary Committee
Hearings at 1.
Mr. Regan and other experts have noted that states engage
in a variety of dubious practices to disguise actual deficits.
These include shifting expenditures off budget; manipulating
receipt and payment activities; accelerating tax revenues;
postponing expenditures; delaying refunds to taxpayers and
salaries to employees into a following fiscal year; delaying
vendor payments, especially medical payments, to mask deficits
in one year; reducing contributions to pensions funds by
forcing changed actuarial assumptions; and, borrowing
repeatedly against the same assets by refinancing them after
the original debt has been mostly repaid.
If these budgeting practices are what we can expect under
the proposed constitutional amendment, then the provision will
do little more than degrade the Constitution.
Furthermore, more than forty States and virtually all
cities except from their balanced budget requirements capital,
enterprise or trust funds that are financed primarily by
borrowing rather than by current revenue. State and local
governments, as well as major corporations, spread the cost of
long-term capital investments over time--often over the useful
life of the investment. By contrast, the proposed
constitutional amendment provides no such leeway. See part V,
v. The Proposed Constitutional Amendment Would Forbid Placing Social
Security Off Budget, and Would Prohibit Establishing a Separate Capital
A. The proposed constitutional amendment imperils social security
Social Security is unique in our history as an economic
safety net for retirees, and as a political covenant with the
American people. Unlike other Federal programs, which no matter
how worthy, are competitors for a common pool of resources,
Social Security is self-sustaining. Social Security currently
operates with a surplus that masks the true size of our budget
problem, and will do so into the next century. Without explicit
exclusion from the balanced budget requirement in the proposed
constitutional amendment, the Social Security surplus will
prove to be a tempting target for a Congress seeking to balance
Refusing to exempt Social Security from the proposed
constitutional amendment would risk the integrity of the Social
Security system and obscure the very problem that the
amendment's proponent seek to address--reducing the Federal
At the Judiciary Committee's consideration of the proposed
constitutional amendment, supporters of the amendment suggested
that Social Security would be protected as part of the
implementing legislation. They asserted that including special
provisions in the Constitution to exempt the Social Security
Trust Fund would only allow Congress to avoid the provisions of
the proposed constitutional amendment by including other
programs in the Trust Fund.
But this argument has a critical problem. Section 7 of the
proposed constitutional amendment would prohibit Congress from
exempting the Social Security Trust Fund from the balanced-
budget calculation. It states that ``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. (emphasis added)''
While Congress undoubtedly has some leeway in interpreting
a constitutional amendment, ``all'' means ``all.'' Section 7
would thus require that all contributions made by Americans to
the Social Security Trust Fund be included in the calculation
required by Section 1 to determine whether the budget is in
To avoid this outcome, Senator Feinstein offered an
amendment during the Judiciary Committee's deliberations to
exempt Social Security. But supporters of the proposed
constitutional amendment opposed the Feinstein amendment, which
was defeated by a 10 to 8 vote.\35\
\35\ Senators Hatch, Thurmond, Simpson, Grassley, Brown, Thompson,
Kyl, DeWine, Abraham, and Simon voted to table the Feinstein amendment;
Senators Biden, Kennedy, Leahy, Kohl, Heflin, Feinstein, Feingold and
Specter voted against tabling.
Enactment of the proposed constitutional amendment thus
would essentially force Congress to include the Social Security
Trust fund in its balanced-budget calculations. As a result, a
historic covenant between the American people and their
government would be threatened.
B. The proposed constitutional amendment would prohibit exempting
capital expenditures from the balanced-budget calculations
Forty-two States and most cities except from their
balanced-budget requirements capital, enterprise or trust funds
that are financed primarily by borrowing rather than by current
revenue. Like American families when they borrow to purchase a
home, State and local governments and most businesses spread
the cost of long-term capital investments over time--generally
over the useful life of the investment. By contrast, the
proposed constitutional amendment prohibits this kind of
Some supporters of the proposed constitutional amendment
suggest that while a separate capital budget is a good idea, it
should be included in implementing legislation, not in the
proposed amendment itself. They maintain that constitutional
recognition of a capital budget would be a loophole Congress
could use to avoid their budgeting responsibilities.
As wasrue with regard to the Social Security Trust fund,
however, section 7 of the proposed constitutional amendment
would prohibit excluding capital expenditures from the
balanced-budget requirement. For that reason, Senator Biden
offered an amendment during the Committee's deliberations to
exclude ``major public physical capital investments'' from the
balanced budget requirement, limit such capital investments to
10 percent of total outlays each fiscal year, and require a
three-fifths vote for passage of the capital budget. By a 12 to
5 vote, however, supporters of the proposed amendment defeated
the Biden amendment.\36\
\36\ Senators Hatch, Thurmond, Simpson, Grassley, Brown, Thompson,
Kyl, DeWine, Abraham, Simon, Heflin and Kohl voted to table the Biden
amendment; Senators Biden, Kennedy, Leahy, Feinstein and Feingold voted
The failure to permit a capital budget may have severe
consequences by discouraging long-term investment. Just as a
budget deficit unfairly harms future generations, so too does
the failure to differentiate capital expenditures from
consumption expenditures, because the inevitable result will be
more current consumption and less investment in our country's
VI. The Proposed Constitutional Amendment Would Promote Gridlock and
Undermine Majority Rule
The proposed constitutional amendment would require three-
fifths supermajorities in each House of Congress to designate
specific amounts by which ``total outlays'' could ``exceed
total receipts'' in any fiscal year and like supermajorities to
increase ``the limit on the debt of the United States held by
the public.'' Supporters of the proposal rely on these
supermajority vote requirements as the proposed constitutional
amendment's ``primary enforcement mechanism'' to make ``Federal
deficit spending significantly more difficult.'' See Committee
majority report at 3.
These supermajority voting requirements are inconsistent
with the principle of majority rule upon which our
constitutional democracy rests. Requiring a supermajority to
enact ordinary legislation is unprecedented, dangerous and in
the words of former Solicitor General Fried, ``profoundly
\37\ Appropriations Committee Hearings at 85.
In essence, we are being asked to subject our ability to
govern ourselves as a Nation to the tyranny of a minority on
economic matters. Rather than setting the stage for the
consensus and cooperation we need to confront our fiscal
problems, the proposed amendment would direct us toward
institutional gridlock and increased opportunities for
brinkmanship. Empowering a minority to override the will of the
majority is, as Yale University Law School Professor Burke
Marshall noted, an ``invitation to gridlock'' \38\ and would
undercut congress' ability to address national problems.
\38\ Appropriations Committee Hearings at 201.
Alexander Hamilton painted an alarming picture in The
Federalist No. 22 of the destructive consequences of these
supermajority voting requirements:
[W]hat at first sight may seem a remedy, is in
reality a poison. To give a minority a negative upon
the majority (which is always the case where more than
a majority is requisite to a decision) is, in its
tendency, to subject the sense of the greater number to
that of the lesser number * * * This is one of those
refinements which, in practice, has an effect the
reverse of what is expected from it in theory. The
necessity of unanimity in public bodies, or of
something approaching towards it, has been founded upon
a supposition that it would contribute to security. But
its real operation is to embarrass the administration,
to destroy the energy of the government, and to
substitute the pleasure, caprice, or artifices of an
insignificant, turbulent, or corrupt junto to the
regular deliberations and decisions of a respectable
majority. In those emergencies of a nation in which the
goodness or badness, the weakness or strength, of its
government is of the greatest importance, there is
commonly a necessity for action. The public business
must in some way or other go forward. If a pertinacious
minority can control the opinion of a majority,
respecting the best mode of conducting it, the majority
in order that something may be done must conform to the
views of the minority; and thus the sense of the
smaller number will overrule that of the greater and
give a tone to the national proceedings. Hence, tedious
delays; continual negotiation and intrigue;
contemptible compromises of the public good. And yet,
in such a system it is even happy when such compromises
can take place: for upon some occasions things will not
admit of accommodation; and then the measures of
government must be injuriously suspended, or fatally
defeated. It is often by the impracticability of
obtaining the concurrence of the necessary number of
votes kept in a state of inaction. Its situation must
always savor of weakness, sometimes border upon
We should heed Hamilton's warning. The supermajority
requirements in the proposed constitutional amendment are
intended permanently to fix the congressional scales in favor
of those who oppose spending, deficit budgets, or tax increases
by requiring more than a majority to take action raising the
debt limit or allowing a fiscal year deficit. As Hamilton
recognized, however, adding these supermajority requirements to
the Constitution may lead to the opposite result. Professor
Fried cautioned that these requirements would give each
recalcitrant member on Congress a potent lever to extract
advantages from the majority, with the perverse result that
spending, and perhaps deficits, would be increased rather than
decreased.\39\ Assistant Attorney General Walter Dellinger, as
well as other eminent constitutional scholars, have concurred
in this assessment.\40\
\39\ Appropriations Committee Hearings at 85, 88.
\40\ Id. at 134.
Nicholas Katzenbach, Attorney General in the Johnson
Administration, testified, for example:
If, due to the size of the existing deficient or poor
economic conditions, a balance cannot be achieved
without serious damage to other national objectives, a
minority, even a shifting minority, is in a stronger
position than it would be today to insist that its
sacred cow not be the one to be gored. Thus, in
reality, the effect of requiring a three-fifth vote to
have any deficit may well lead to a far greater deficit
than would otherwise occur.\41\
\41\ Appropriations Committee Hearings at 165.
Professor Kathleen Sullivan of Stanford University also
testified about the risks of supermajority voting requirements
in the balanced budget amendment. She explained:
[S]upermajority requirements in the context of
legislative, substantive policymaking enable a minority
of each House to hold the legislative agenda hostage,
blocking majority choices until the minority factions
can exact the policy concessions that they want from
the majority as the price of their acquiescence to a
supermajority vote. * * * It might be a particularly
acute problem of minority veto in this context, because
permitting minority vetoes here might permit people to
have their favorite spending program be the ticket to
their vote in a request for deficit spending by the
majority--which would, of course, be counterproductive
in the end. It would increase spending, rather than
rein it in.\42\
\42\ Appropriations Committee Hearings at 179-80.
Not only do the supermajority requirements risk increasing
the deficits, they also tempt Congress to engage in more budget
gimmickry. Inaccurate and unrealistic budget estimates could be
used to avoid triggering the supermajority requirements and
empowering a parochial minority faction.\43\
\43\ Appropriations Committee Hearings at 165 (testimony of
For small States, the supermajority voting requirements in
the balanced budget amendment could be particularly
devastating. In the House, only 175 votes would be necessary to
defeat any appropriations bill that might result in a fiscal
year deficit. This means that concerted action by the
representatives of as few as six States--California, New York,
Texas, Florida, Illinois and Pennsylvania, with a total of 177
representatives--could thwart the requirement of a three-fifths
vote to waive the requirement of a balanced budget or increase
the debt ceiling. This results in a virtual veto power to a
very small number of populous States.\44\
\44\ Appropriations Committee Hearings at 101 (testimony of
Professor Burke Marshall, Yale University).
What could this mean for small states? We need look no
further than last year's crime bill to see the possible ill
effects of a supermajority voting requirement. In authorizing
funds for community policing, corrections programs and crime
victims assistance, each State received a minimum allocation.
Under the proposed constitutional amendment, the most populous
states could forestall any deficit spending until such formulas
were modified to be based solely on population.
We should not hold our policymaking hostage to House or
Senate minorities.\45\ Instead of hamstringing Congress with
supermajority requirements, we should be seeking ways to
increase our ability to take action to reduce the deficit and
to deal with a fast-changing and increasingly global economy.
To require economic policymaking to be subject to minority rule
pursuant to constitutional mandate is to proceed in precisely
the wrong direction.
\45\ Alternatively, in the Senate the combination of
representatives from 21 of the smallest States representing
approximately only 11.2% of the nation's population could block any
action. Thus, it would encourage unholy alliances and splintering
regional combination in order to exact tribute on parochial matters.
Our Founding Fathers wisely rejected requiring
supermajorities to enact legislation. The constitutional
exceptions to majority rule can be counted on one hand. Each is
justified by the need to protect our Democracy, not to weaken
\46\ The exceptions, each of which requires a two-thirds vote are
to override a Presidential veto (Art. I, sect. 3); impeach a federal
officeholder (Art. I, sect. 3); approve treaties made by the President
(Art. II, sect 2); expel a Member from either House (Art. I, sect. 5);
and amend the Constitution. Only the first and last require a two-
thirds vote of each House.
In matters of substantive policymaking within the
jurisdiction of Congress, our constitutional democracy has from
its inception been predicated upon the concept of majority
rule. Federal legislative power is nowhere in the Constitution
subjected to a supermajority requirement.
As Professor Sullivan pointed out:
In Federalist 58 * * * James Madison argued that if
`more than a majority' were required for legislative
decision, then `in all cases where justice or the
general good might require new laws to be passed, or
active measures to be pursued, the fundamental
principles of free government would be reversed. It
would be no longer the majority that would rule: the
power would be transferred to the minority.' In other
words, according to Madison, requiring a supermajority
to pass ordinary legislation turns democracy on its
\47\ Appropriations Committee Hearings at 184-85 (emphasis added).
Former Solicitor General Fried testified with considerable
reluctance in opposition to this proposed amendment. He
recognized, however, that the proposed supermajority
requirements are ``against the spirit and genius of our
Constitution, which is a charter for democracy; that is, for
majority rule.'' \48\ His comments are worth quoting at length:
\48\ Appropriations Committee Hearings at 84.
So I am brought to why a balanced budget amendment in
any form, even if workable, is a bad idea. The reason
quite simply is that the political judgments underlying
the amendment--sound and important though they are--are
just that: political judgments, and as such they should
not be withdrawn from the vicissitudes of ordinary
majoritarian politics that the Constitution establishes
as the general rule for our public life as a nation. I
am not entitled to have my bias against government
spending enshrined in the Constitution, to frustrate
the will of my fellow citizens expressed by a majority
of our representatives.
Majority rule is so basic a principle of our
Constitution that it is nowhere state explicitly, but
pervades the whole document. It is striking that in
Article I the Constitution nowhere states that the
ordinary action of the two Houses shall be by majority
vote of a quorum. The Constitution speaks only of a
bill `passed' by a House. Details about the type of
majority contemplated come up only in the five
instances in which a vote greater than a simple
majority is required: veto override, ratification of
treaties, the proposal of constitutional amendments to
the states, convictions of impeachments and expulsion
of members of either House. In none of these instances
does the Constitution specify a particular subject
matter, as would the balanced budget amendment. Rather,
in the first two instances the Constitution seeks to
maintain the balance between the two branches. * * * In
short, the constitutional norm is that the elected
bodies act by majority rule.
* * * My point is that majority rule--imperfect as
it is--is the rule that best expresses democracy. * * *
To put this all more practically, the balanced budget
amendment would just make it that much harder to
govern, giving those who want to put obstacles in the
way of government new opportunities for obstruction. *
People choose a President and Congress to govern. If
they govern badly they should be thrown out, not
provided with excuses. It is simple enough, and this is
what majority rule is about.\49\
\49\ Appropriations Committee Hearings at 87-88.
Professor Sullivan recognized another important respect in
which the proposed amendment undermines our Democracy. It
reflects a profound lack of faith in the ability of voters to
hold responsible those Members of Congress who irresponsibly
drive up the deficit.
What this amendment is saying to the coal miner, the
domestic worker, the office worker, the person on the
street is we do not trust you enough to impose fiscal
responsibility on your elected officials at the ballot
box. * * *
We do not trust you to be as prudent with respect to
your children and the deficit burdens that you might
impose on them. We think that you are likely to support
all this taxing and spending, taxing and spending, and
we do not trust politics to cure that.
Now, I think the American people are a good deal
smarter than that and capable of taking serious
consideration of the issues posed by the deficit,
debating them in the crucible of politics, which is the
normal forum for fiscal debates to take place, and to
fight the tendencies to leave to tomorrow burdens of
debt because everyone can understand that concept. * *
\50\ Appropriations Committee Hearings at 187-88.
Nowhere in this year's proceedings, in the Judiciary
Committee's hearing, its deliberations, or the Committee
majority's report do the supporters of the amendment
satisfactorily explain this unprecedented departure from the
underlying principle of our constitutional democracy. Nowhere
does the Committee majority acknowledge the radical damage this
proposal will do to the fundamental principles of our
democratic form of government.
This proposal for constitutional supermajority requirements
has already spawned a series of look-alikes proposals for
constitutional amendments addressing revenue measures and so-
called unfunded mandates. There will undoubtedly be more.
We should not proceed down the road to constitutionally-
mandated minority rule. Rather, let us have ``faith in
ourselves to act responsibly, and in the people to discipline
[us] if [we] do not.'' \51\
\51\ Appropriations Committee Hearings at 85 (testimony of
Majority rule, in Congress and at the ballot box, has been
the central rule of our representative democracy for over two
centuries. It should not be tossed aside because some Members
of Congress lack the will to make the tough decisions and cast
the tough votes needed to balance the budget.
The fault is not in the Constitution. Let us rededicate
ourselves to achieving lasting economic prosperity for the
Nation in ways that count, and spend no more time debating
gimmicks that have no place in the Constitution.
XII. SUPPLEMENTAL MINORITY VIEWS OF MR. LEAHY
During the course of the last 15 years, the Senate
Judiciary Committee has considered at least 11 resolutions
calling for a constitutional amendment purporting to require a
balanced budget. Once again, I have voted against it. While I
share the anger, frustration and impatience of those who want
greater deficit reduction, I am convinced that a constitutional
amendment is not the way to achieve that goal.
The current version of such a constitutional amendment,
S.J. Res. 1, is not only unnecessary, it is dangerous. It would
demean our Constitution, endanger our economy and destabilize
the balance of power among our three branches of government
that provide us our greatest protection. It would head us down
the road to minority rule and undermine our constitutional
democracy. It would likely result in a shifting of burdens,
responsibilities and costs to Vermont's State and local
governments that they are ill-equipped to assume.
Both because of what it would do and what it would not
accomplish, I oppose passage of S.J. Res. 1 as the 28th
amendment to the Constitution.
I endorse the Minority Views in opposition to S.J. Res. 1.
In addition, I submit the following supplemental views:
1. S.J. Res. 1 does not reduce the debt or the deficit
The proposed constitutional amendment will not cut a single
penny from the federal budget or deficit this year, next year
or any year. By its terms, S.J. Res. 1 cannot, even if passed
and ratified, become effective before 2002, seven years and
three federal election cycles from now. It is a cop-out.
There are only two responsible ways to reduce our budget
deficit--cut spending or raise taxes. The majority report
acknowledges that Congress already has all the constitutional
power necessary to take these steps. Indeed, in exhorting a
balanced budget, Congress is merely being called upon to
exercise its currently existing authority.
Proceeding with further consideration of the proposed
amendment serves to delay us from making progress against the
deficit. In addition, I fear that its passage will be used by
some as an excuse to delay further deficit reduction far into
the future as they await congressional consideration of the
amendment, then the lengthy ratification process in the states,
then the consideration of implementing legislation, and then
the consideration of budgets consistent with such implementing
legislation, which is where the necessary cuts will finally
have to be specified.
It makes more sense to cast votes that will cut the deficit
now and not wait until the next century. I want to continue to
lower the deficit now, not wait until sometime after the year
2002. We showed in the last Congress that we can make progress
on undoing the mistakes of the deficit-building decade of the
1980's without this proposed amendment to the Constitution. The
past Congress cut the deficit by 40 percent. As a share of our
gross domestic product, the deficit has been cut in half, from
4.9 percent in fiscal year 1992 to a projected 2.4 percent in
fiscal year 1995. For the first time since Harry Truman was
President, the deficit is projected to decline for three years
in a row.
As part of our efforts, we passed legislation that has cut
tens of billions of dollars of taxpayer-financed government
programs. For example, Senator Lugar and I sponsored
legislation that reorganized the U.S. Department of Agriculture
to become a more efficient and effective agency. The Leahy-
Lugar bill passed Congress at the end of last year and will
result in saving over $3 billion and closing about 1,200 USDA
field offices--including eight offices in my home State of
This proposed constitutional amendment is a ``feel good''
vote that does nothing now to balance the federal budget or
address the federal debt. Many of the same people who so
eagerly support S.J. Res. 1 are responsible for the huge and
unprecedented budget deficits of the Reagan and Bush years. I
am one of seven remaining Senators, who voted against the 1981
Reagan budget package that increased defense spending while
cutting taxes--causing our debt to explode. Twelve years of
Republican administrations left us with over $2.6 trillion in
This proposed constitutional amendment remains now what it
was then--political cover for those failed policies of the
1980's and their tragic legacy. Those mistakes continue to cost
our country almost half a billion dollars every workday in
interest on the deficits rung up during the last two Republican
administrations. Indeed, were it not for the interest on this
Republican debt, we would have had a balanced budget last year.
Of course, this year there is additional irony in that the
Republican Party has assumed majority status in both the House
and Senate. As such it can likely pass any budget it wants.
That only requires a majority vote. If they want to balance the
budget, eliminate the deficit, pay off the debt--they can do
all that by a simple majority vote in both Houses. They do not
need a constitutional amendment to do any of this, and to do it
now. Yet in the opening days of the resumption of Republican
control of Congress they are proceeding not toward building
consensus of a deficit reduction package but, instead,
insisting on consideration of a constitutional amendment whose
justification is a lack of political will and political courage
by the legislative majority in each House. Instead, we should
heed the advice of our former Republican colleague Lowell
Weicker, to quit looking for an automatic pilot to make the
hard choices and do it ourselves.
2. S.J. Res. 1 will shift burdens to state and local governments
The proposed amendment contains no protection against the
Federal Government seeking to balance its budget by shifting
costs and burdens to the States. If it were to be passed,
ratified and effective, it would be a prescription for a
disaster for small States that are ill-equipped to handle the
Can anyone honestly deny that any impact from a balanced
budget amendment would likely be to shift burdens to State and
local government? Can anyone deny that we will be sending less
assistance to State and local government? As the Minority Views
note, during the 1980's Federal contributions to State and
local governments fell sharply--a drop of almost one-third.
During that same decade, Vermont was forced to make up the
difference and had to raise its State income tax rate from 23
percent to 28 percent. In addition, State and local property
taxes and taxes of all kinds had to be increased.
That is not the way to cut the Federal deficit--shifting
burdens to State and local government and requiring them to
raise the revenues necessary to take up the slack. As we state
in our Minority Views: ``Working people cannot afford tax
increases any more easily because they are imposed by State and
local authorities.'' This is the ultimate budget gimmick--pass
the buck to the States. I know that the Governor, local
authorities and people of my State are vitally concerned about
Recently, in response to a request from Governor Dean, the
Treasury Department made a study of what can happen to State
and local taxes under the balanced budget amendment and the
Federal tax reductions of the so-called ``Contract with
America.'' Assuming that Social Security and Defense cuts were
``off the table,'' the Treasury analysis predicts cuts in
Federal grants and other Federal spending that directly
benefits State residents. Treasury estimates that Vermont would
loose over $200 million in Federal assistance and over $400
million in other Federal spending in Vermont. To try to offset
these losses, Vermont would have to increase State taxes by
23.9 percent across the board.
These Treasury Department numbers are not the only ones to
forecast hardship for the States under a balanced budget
amendment. A study released in February 1994 by the Wharton
Econometrics Forecasting Associates concluded that a balanced
budget amendment would devastate the State's economy. In
particular, the study found that such an amendment would cause
severe job losses and a drastic cut in personal income. For
Vermont, this study predicted a loss of personal income of $1.2
billion, an average of 5.4 percent, and 3,900 lost jobs,
resulting in a .5 percent rise in Vermont's unemployment rate.
As I prepare these additional views, the Senate is
currently debating how exactly to define ``unfunded mandates''.
My concerns extend beyond what the lawyers would determine were
``legally binding obligations'' to those programs that respond
to basic needs of individuals. Human needs are no less real
because they are not set forth in a Federal statute. Hunger and
illness do not need statutory definition to cause suffering. If
we try to balance the Federal budget by scaling back essential
services, we will just as surely be shifting these costs and
burdens on State and local governments.
I know that the people of Vermont are not going to let
their neighbors go hungry or without medical care and I expect
people elsewhere will not either. As much as our churches,
synagogues, charities and volunteers will contribute, a large
part of the problem and a large share of the costs will fall to
State and local governments.
Representative Richard Armey, the new House Republican
Majority Leader said a few days ago that he did not want to
spell out the effects of this constitutional amendment before
it was passed because he was afraid that Congress would not
vote to pass it if we knew what it would do. He later
reinforced his remark by warning supporters not to reveal where
the necessary cuts would be made because ``knees would
Thus, we are deliberately being asked to buy a pig in a
poke or, as I believe it should be renamed, a ``STEALTH''
amendment. I call it ``STEALTH'' because we do not know and are
not supposed to investigate and consider the likely impact,
such as the likely burdens that will be shifted to State and
local governments. ``STEALTH'', because that is an acronym for
what the amendment will likely become: ``The State Tax
Enhancement and Local Tax Heightening'' amendment.
This vagueness of the terms in the proposed constitutional
amendment and the manner in which we are proceeding does not
allow us to consider its likely consequences. No record of
likely impacts on each State were presented at the Committee
hearings. On the contrary, I asked the question of a number of
witnesses and none could give a definitive answer.\1\ Where is
the testimony of the state legislatures and local governments?
Where is the careful study of likely impact?
\1\ Senator Leahy asked in written questions: ``What is your
estimate of the effect on each State's economy and, in particular, on
personal income levels and job losses in each State, of requiring a
balanced budget?'' In response, the American Farm Bureau Federation
bluntly stated, ``Not known,'' and the U.S. Chamber of Commerce
explained, ``The complexity of discerning reliable answers is further
heightened by the uncertainty over which programs Congress will decide
to cut as it moves to a balanced budget.'' Former Attorneys General
Griffin Bell and William Barr indicated that they had no information on
which to answer the question.
I believe that before we are called upon to consider S.J.
Res. 1, we need to know what its impact is likely to be.
Certainly before any State is called upon to consider
ratification of such a constitutional amendment, it should be
advised of the likely effects on its economy and, in
particular, on personal income levels and jobs losses in the
State. Let us get some answers and know where we are headed.
3. S.J. Res. 1 will encourage budget gimmickry
This proposed constitutional amendment would invite the
worst kind of cynical evasion and budget gimmickry. The
experience of States with balance budget requirements only
bears this out.
Indeed, the majority report describes the State experience
as ``instructive''. I agree, but for different reasons. While
the majority report cites the States' experience with balanced
budget requirements as proof that the proposed constitutional
amendment will work, the testimony presented at the Committee
hearing demonstrates the contrary.
The former chief financial officer of New York State,
Edward Regan, presented startling testimony that many States
with a balanced budget requirement achieve compliance only with
``dubious practices and financial gimmicks.'' These gimmicks
include shifting expenditures to off-budget accounts or the
financing of certain functions to so-called independent
agencies or authorities. States have engaged in a number of
other ploys as well to help the bottom line and avoid
developing red ink, including accelerating revenue receipts
such as tax payments, postponing payments to localities and
school district suppliers, delaying refunds to taxpayers and
salary and expense payments to employees until the next fiscal
year, deferring contributions to pension funds or forcing
changes in actuarial assumptions, and selling State assets.
The proposed balanced budget amendment does not prohibit
the Federal Government from using these same ``dubious
practices and gimmicks.'' With Congress facing a constitutional
mandate, the overwhelming temptation will be to exaggerate
estimates of economic growth and tax receipts, underestimate
spending and engage in all kinds of accounting tricks, as was
done before the ``honest budgeting'' effort of 1993. The result
will be that those who do business with the Government may
never be certain in what fiscal year the Government will choose
to pay up or deliver and those who rely on tax refunds can
expect extended delays from the IRS.
Passing a constitutional directive that will inevitably
encourage evasion, will invite public cynicism and scorn not
only toward Congress, but toward the Constitution itself. Let
us not debase our national charter in a misguided, political
attempt to curry favor with the American people by this
declaration against budget deficits. Let us not make the
mistake of other countries and turn our Constitution into a
series of hollow promises.
4. S.J. Res. 1 is loaded with loopholes
The loopholes in S.J. Res. 1 already abound. One need only
consult the language of the proposed amendment and the majority
report for the first sets of exceptions and creative
interpretations that will allow Congress to reduce the deficit
only so far as Members choose to cast responsible votes.
Of course, the proposed amendment itself includes a number
of escape hatches, like the three-fifths majority provision of
section 1, the waiver provisions of section 5 and the reliance
on estimates in section 6.
The majority report chooses to add additional
``flexibility''. For example, although the proponents of the
constitutional amendment have made clear their intention to
include the Social Security trust funds, the highway trust
funds, the crime trust fund and other self-sustaining funds and
programs in their calculations of outlays and receipts, they
expressly exempt the Tennessee Valley Authority as ``[a]mong
the Federal programs that would not be covered by S.J. Res.
1.'' What other exemptions are contemplated or will be granted?
What is the basis or principled distinction for such off-budget
matters as Social Security? Why are the user-fee funded
operations of the Patent and Trademark Office not exempt? When
the Post Office is fully spun off, will its operations and
funding be included? What about the FDIC, the RTC, OPIC, loan
guarantee programs, and obligations backed by the full faith
and credit of the United States but not directly from the
Government? What else will be off-budget for purposes of the
Further, the majority report ultimately recognizes the
arbitrary and artificial nature of the ``fiscal year'' as a
basis for measuring budget balance. The proponents of this
constitutional amendment seek in their report to ameliorate the
express language of the proposed amendment by according the
seemingly straightforward concept ``fiscal year'' with a
flexible definition. According to the majority report ``fiscal
year'' is not subject to ``constitutional standing,'' ``does
not require an immutable definition,'' and ``other fiscal years
could be defined without necessarily straining the intent of
the amendment.'' What this all means is that ``fiscal year''
can mean whatever a majority in Congress wants it to mean. It
may mean one thing this year and another the next. It can be
shifted around the calendar as Congress deems appropriate.
Watch out for the shifting of ``fiscal years'' in order to
juggle accounts when elections are approaching.
The majority report also explains that in relying on
estimates to measure the budget, they need only be
``reasonable'' and ``appropriate''. Indeed, the majority report
describes bust how much discretion Congress will have in
exercising the ``appropriate degree of flexibility'' when it
Congress could decide that a deficit caused by a
temporary, self-correcting drop in receipts or increase
in outlays during the fiscal year would not violate the
Article. Similarly, Congress could state that very
small or negligible deviations from a balanced budget
would not represent a violation of Section 1. If an
excess of outlays over receipts were to occur, Congress
can require that any shortfall must be made up during
the following fiscal year.
Just think about those loopholes.
Congress could decide that it is not violating the proposed
amendment because it deems the deficit ``a temporary, self-
correcting drop in receipts'' or ``a temporary self-correcting
* * * increase in outlays.'' My guess is that unless it becomes
a political bone of contention between political parties as we
approach an election, we could go a long time without Congress
declaring itself in violation of this proposed amendment.
Congress could state that ``very small'' or ``negligible''
violations are not violations of the express directive of the
proposed amendment. What is ``small'', what is ``negligible''?
To paraphrase the words of Everett Dirksen: ``A billion here, a
billion there, after a while it does not add up.'' Does a
congressional statement of a de minimis shortfall require a
vote, a recorded roll call vote, a simple majority, a so-called
``constitutional'' majority, a three-fifths majority? Is a
congressional declaration of ``no violation'' binding on the
President or the courts?
Under what circumstances is ``an excess of outlays over
receipts'' not a deficit? Under what circumstances are deficits
carried forward into other years? Is such a carry forward
limited to the next fiscal year or can it be rolled over again
and again? Over what period of time may such a carry forward be
effectuated. If we can have deficits carried forward, can they
also be carried back? Can past successes be netted against
future failure? Can surpluses be carried forward, as well? The
accountants and tax lawyers are going to have a field day with
5. S.J. Res. 1 may harm the economy
This proposed constitutional amendment could be
economically ruinous. During recessions, deficits rise because
tax receipts go down and various Government payments, like
unemployment insurance go up. By contrast, S.J. Res. 1 would
demand that taxes be raised and spending be cut during a
recession or depression. As Herbert Hoover taught us in the
1930's, that is precisely the wrong medicine at the wrong time.
Of course, a supermajority of both Houses of Congress could
waive the balanced budget requirements, but why should we hold
economic policy hostage to House or Senate minorities?
Economic policy must be flexible enough to deal with a
changing and increasingly global economy. Yet, the requirements
of S.J. Res. 1 will tie Congress' hands to address national
problems that may necessitate deficit spending. Alexander
Hamilton, this Nation's first Secretary of Treasury, vigorously
defended Congress' broad powers over the purse and warned
against limits on those powers. In words that we should heed
today, Hamilton wrote in Federalist Paper No. 36:
I acknowledge my aversion to every project that is
calculated to disarm the government of a single weapon,
which in any possible contingency might be usefully
employed for the general defense and security.
We should not hamstring the legislative power expressly
authorized in Article I, section 8 of the Constitution. Let us
not undo that which our Founding Fathers wisely provided--
flexibility. Let us not limit choices and accountability.
Instead, let us exercise our constitutional responsibilities in
the best interests of the American people.
6. S.J. Res. 1 invites constitutional clashes with the executive
This proposed constitutional amendment risks seriously
undercutting the protection of our constitutional separation of
powers. No one has yet convincingly explained how the proposed
amendment will work and what roles the President and the courts
are to play in its implementation and enforcement. The majority
report concedes that the amendment is ``silent about judicial
review,'' but asserts that this provides ``the flexibility that
an amendment to the Constitution must have.''
Notwithstanding this ominous silence, even the proponents
of this proposed amendment concede that the President would
have a constitutional duty to uphold and enforce it. They fail
to reconcile this presidential duty with the purportedly
``self- enforcing'' nature of this proposed amendment, however.
A balanced budget amendment is not merely an open invitation to
the President to control federal spending, it would mandate the
President's involvement in achieving a balanced budget.
Suppose, for example, that estimated receipts and outlays
proved wrong and that, nine months into a fiscal year, it
became clear that outlays would exceed receipts. This is hardly
a fanciful notion--OMB just forecast an increase of almost $25
billion in the deficit for fiscal year 1995 over its previous
In such a situation, arguments would be heard that S.J.
Res. 1 allowed the President to exercise power to impound
funds--not just a line-item veto, but the unfettered authority
to control all spending and all cuts through the rest of the
fiscal year. In the absence of implementing legislation or
prompt congressional action, the President would likely argue
that the Executive was ensuring that the Constitution was being
``faithfully executed,'' as is its duty. Not since the dark
days of Watergate and the Nixon impoundments have we faced such
a constitutional crisis, but S.J. Res. 1 invites it.
Instead of creating future constitutional crises, let us do
the job we were elected to do. Let us make the tough choices
and cast the difficult votes and make progress toward a
7. S.J. Res. 1 will shift power to unelected judges
Constitutionalizing the budget and economic policy would
inevitably throw the nation's fiscal policy into the courts,
the last place issues of taxing and spending should be decided.
This proposed constitutional amendment flatly states:
``[T]otal outlays for any fiscal year shall not exceed total
receipts for that fiscal year.'' But who, after all, is going
to determine what is an ``outlay'' and what is a ``receipt''?
What happens if estimates and projections are off and during
the course of a year, at its end or thereafter, there is reason
to believe that ``total outlays'' do exceed ``total receipts''?
Does the President then have the unilateral authority to cut
programs to ensure compliance? Do the courts? Can program
beneficiaries or taxpayers who rush to court first, frame the
court's decision regarding which spending to enjoin? Can the
courts be called upon to require increased revenue--that is
higher taxes--to comply with the constitutional imperative of
Robert Bork, among others, points out that once fiscal
policy is made a matter of constitutional law the courts could
be called upon to interpret and enforce it. Former Attorney
General Barr raised concerns during Committee hearings that
state courts might involve themselves, as well.
The effect of the proposed amendment could be to toss
important issues of spending priorities and funding levels to
thousands of lawyers, hundreds of lawsuits and dozens of
federal and state courts. If approved, S.J. Res. 1 would have
let Congress off the hook by kicking massive responsibility for
how tax dollars are spent to unelected judges. Constitutional
scholars may not agree on many things, but one thing they do
agree on is that the judiciary will be called upon to decide
important matters of compliance with S.J. Res. 1.
8. S.J. Res. 1 erodes the fundamental principle of majority rule
Our Founding Fathers rejected requirements of
supermajorities. We should look to their sound reasons for
rejecting supermajority requirements before we impose on our
citizens a three-fifths supermajority vote to adopt certain
Alexander Hamilton painted an alarming picture in
Federalist Paper No. 22 of the consequences of the ``poison''
of supermajority requirements that serve ``to destroy the
energy of the government, and to substitute the pleasure,
caprice, or artifices of an insignificant, turbulent, or
corrupt junto to the regular deliberations and decisions of a
respectable majority.'' These supermajority requirements are a
recipe for increased gridlock not more efficient action. As
Hamilton noted long ago: ``Hence, tedious delays; continual
negotiation and intrigue; contemptible compromises of the
Such supermajority requirements reflect a basic distrust
not just of Congress, but of the electorate itself. I reject
that notion and am prepared to keep faith with and in the
9. S.J. Res. 1 will result in distressing surprises
There is much truth to the axiom that the ``devil is in the
details.'' We do not have the details for the proposed
constitutional amendment, S.J. Res. 1. Indeed, the majority
report admits that the proposed amendment ``does not specify
the process that Congress must follow in order to achieve a
balanced budget.'' The proposed constitutional amendment uses
such general terms that even its sponsors and proponents
concede that implementing legislation will be necessary to
clarify how it will work.
What are the issues that proponents seek to defer to
implementing legislation? Definitions of the programs that will
be off-budget, explanation of the roles of the courts and the
President in executing and enforcing the amendment, directions
on what will be considered ``compliance'' with the amendment,
guidance on how much of a deficit may be financed and carried
over to the next year, and other core matters that are critical
to our understanding of what this amendment means.
I do not think that Congress should be asked to amend the
Constitution by signing what amounts to a blank check. Nor
should any State be asked to ratify a pig in a poke. In the
interests of fair disclosure, Congress should first determine
the substance of any implementing legislation, as it did in
connection with the 18th Amendment, the other attempt to draft
a substantive behavioral policy in to the Constitution.
Proper consideration of how the amendment would be
implemented before having to vote on it need not affect the
measure's distant effective date. Let us get the horse in front
of the cart and not seek to evade accountability. This proposed
constitutional amendment is hardly the work of an ``accountable
deliberative legislative assembly,'' as the majority report
contends. Rather, its proponents seek to delay until after its
approval any attempt to specify how the proposed amendment
would work and how it would be implemented. For my colleagues
who are enamored of popular polling, I note that current polls
demonstrate that over 75 percent of the American people are
sensible enough to believe that we should specify how we intend
to cut the deficit before we vote on S.J. Res. 1.
10. S.J. Res. 1 is not constitutionally necessary
Amending the Constitution of the United States should not
be a matter undertaken lightly, but only after careful
deliberation. Instead of a sloganeering amendment, what we need
is the wisdom to ask what programs we must cut and how much we
need to raise revenues, and the courage to explain to the
American people that there is no procedural gimmick that can
cut the deficit or the debt. Let us not proceed with a view to
short-run popularity, but with vision of our responsibilities
to our constituents and the nation in accordance with our
Last year, our distinguished colleague from West Virginia,
Senator Robert C. Byrd, conducted a series of extraordinary
hearings before the Appropriations Committee on this subject. I
urge all of my Senate colleagues to review those comprehensive
hearings and not merely to rely on the slender reed of our
Judiciary hearing on the second date of this Congress.
I am confident that upon serious reflection the Senate
should collectively determine that S.J. Res. 1 does not meet
the requirements of Article V of the Constitution for proposal
to the States--it is not constitutionally ``necessary''.
I look forward to our discussion and debate. I hope that we
will use this opportunity to try to learn more about how the
proposed amendment would work, how we might reach a balanced
budget, what cuts will be needed, how we intend to protect
against the temptation to shift burdens onto local and State
governments, how we will ensure that the safety net is not
shredded, how the proposal would be implemented and enforced,
what effects it will have on our basic constitutional
protection of separation of powers and what consequences it
would have for our democratic form of government.
XI. ADDITIONAL VIEWS OF MR. HEFLIN
I believe that the opportunity to adopt a constitutional
amendment requiring a balanced federal budget and submitting it
to the states for ratification may now be at hand, and I look
forward to help guiding its passage on the floor of the U.S.
Senate. I have introduced such a proposal at the beginning of
each Congress, and the proposal I introduced this year, S.J.
Res. 13, is identical to measure, S.J. Res. 1, which I have
cosponsored and which the Judiciary Committee has just
considered and approved by a vote of 15-3. S.J. Res. 1 will now
go to the floor for debate and a vote by the entire body, and I
expect it will receive the necessary two-thirds vote of the
entire membership of the Senate.
I congratulate Chairman Hatch on the way and manner in
which he expeditiously conducted the committee hearing and
mark-up. I and a number of Senators were allowed to testify at
the hearing on January 5, 1995, and a wide cross section of
additional witnesses were heard at the committee hearing.
Further, a number of amendments were offered, debated, and
voted upon publicly at the committee executive meetings which
were held on January 17 and 18, 1995. This is American
democracy at work and, in my judgement, at its best--there was
no effort to stifle debate nor prevent votes on any amendments.
I want to reiterate a couple of points that I made in my
floor speech when I introduced identical legislation on this
issue. First, it is particularly important that the Senate and
House of Representatives go ahead and act now. Interest rates
are going up * * * how far we do not yet know. A major portion
of our nation's operating budget--$295 billion in fiscal year
1995--deals with debt service. Interest payments are the second
largest expenditure of the federal budget--interest payments
are greater than defense spending.
It does not take a rocket scientist to see how this cancer
is eating up resources which are badly needed in other areas
such as infrastructure repair, the battle against cancer, the
war on drugs and crime, and health care. If interest rates were
to double from current rates, and they well could, one can
plainly see that the amount of money needed to service the
federal debt would immediately soar also further eroding our
nation's ability to carry out its constitutional
I want to emphasize several matters of particular interest
to me. First, Section 5 contains a provision allowing a waiver
of the amendment in the time of war or where the United States
finds itself engaged in military conflict which causes an
imminent and serious threat to national security. That
provision reads as follows:
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 5 maintains the traditional approach that Congress
has given throughout our nation's history towards national
defense: when the Congress and the President have formally
declared war, financing the war effort should have priority
with regard to our nation's budget. The waiver mentioned in the
first sentence of Section 5 would require a concurrent
resolution of Congress, but it would not have to be submitted
to the President for approval. The waiver mentioned in sentence
two of Section 5, however, requires a joint resolution of
Congress, which would have to be submitted to the President for
Earlier versions contained only the first sentence of
Section 5 relating to a ``declared'' war. In 1982, I offered an
amendment on the floor of the Senate, which failed to carry by
a few votes, which would have contained a provision also
allowing for a waiver of the amendment where the United States
found itself in a serious military conflict, yet short of an
outright formally declared war. Working with my colleagues, we
were successful subsequently in including such a provision
which is now sentence two of Section 5 of S.J. Res. 1.
This particular provision of Section 5 goes to the problem
of national security in as much as this nation has fought
relatively few declared wars as compared to the vast number of
``conflicts'' or undeclared wars. The Korean Conflict, the
Vietnam War, and Gulf War were all undeclared wars which have
occurred within the last fifty years of our nation's history.
I firmly believe that Congress should have the option to
waive the requirement for a balanced budget in cases of less
than an outright declaration of war. Looking back over the
history of our nation, we find that we have had only five
declared wars: the War of 1812, the Mexican War, the Spanish-
American War, the First World War, and the Second World War.
While the United States has engaged in only five declared
wars, it has engaged in hostilities abroad which required no
less commitment of human lives or American resources than
declared wars. In fact, our nation has been involved in
approximately 200 instances in which the United States has used
military forces abroad in situations of conflict.
The most recent encounters of the United States in armed
conflict with enemies have been undeclared wars. We fought the
Gulf War without a declaration of war. In addition, we fought
both the Vietnam War and the Korean Conflict without formal
declarations of war.
In other instances, American troops have been sent to
foreign countries in times of crisis--Lebanon in 1958, and the
Dominican Republic in 1965. Other critical situations,
including the confrontation in the Formosa Straits in 1955, the
Cuban Missile Crisis in 1962, the seizure of the Mayaquez in
1975, have been met by the use of American military forces.
There are other instances in which our nation has been
involved in conflicts, short of a formally declared war, but
which have been of a serious nature. During 1914 to 1917, a
time of revolution in Mexico, there were at least two major
armed actions by U.S. forces in Mexico. The hostilities
included the capture of Vera Cruz and Pershing's subsequent
expedition into northern Mexico.
In June and July of 1918, marines landed at Vladivostok to
protect the American consulate. The United States landed 7,000
troops which remained until January 29, 1919, as part of an
allied occupation force. In September of 1918, American troops
joined the allied intervention force at Archangel and suffered
some 500 casualties.
In 1927, fighting at Shanghai caused American naval forces
and marine forces to be increased in the area. In March of
1927, a naval guard was stationed at the American consulate at
Nanking after Nationalist forces captured the city. A United
States and British warship fired on Chinese soldiers to protect
the escape of Americans and other foreigners. By the end of
1927, the U.S. had 44 naval vessels in Chinese waters, and
5,670 men ashore.
Thirty-one years later when a pro-Nasser coup took place in
Iraq in January of 1958, the President of Lebanon sent an
urgent plea for assistance to President Eisenhower, saying
Lebanon was threatened by both internal rebellion and indirect
aggression. President Eisenhower responded by sending 5,000
marines to Beirut to protect American lives and help the
Lebanese maintain their independence. This force was gradually
increased to 14,000 soldiers and marines who occupied strategic
positions throughout the country.
This country can be faced with military emergencies which
threaten our national security, without a formal declaration of
war being in effect. The most recent circumstance occurred on
January 12, 1991, when the Senate, agreeing with the House of
Representatives, voted by a slim margin of 52-47 to approve the
use of force to stop Iraqi aggression against the state of
Kuwait. This slim margin illustrates how difficult it would be
without my provision, to achieve the needed sixty votes to take
the budget into a deficit posture in order to finance the Gulf
War. Thus, circumstances may arise in which Congress may need
to spend significant amounts on national defense without a
declaration of war. Congress and the President must be given
the necessary flexibility to respond rapidly when a military
I also support Senator Feinstein's amendment to exempt
Social Security from the balanced budget calculation. In the
Budget Enforcement Act of 1990, Congress clearly declared that
the Social Security trust fund is off-budget. In the past, the
surplus which is accumulating in the trust fund has been used
to mask the true size of the federal budget deficit.
Social Security is a self financing, contributory
retirement program--workers must contribute 6.2 percent of
their salaries to the program and employers are required to
match that amount. These funds, by law, are held in a trust,
and the American people have a right to expect that Congress
will maintain the integrity of that fund.
The funds are now in surplus and this is expected to
continue until the year 2012, when the baby boom age begins to
dramatically draw these funds down as they reach retirement
age. Thus, failure to exempt the Social Security trust funds
from the balanced budget calculation will surely place the
trust fund in jeopardy.
Finally, some of the criticism that has been raised centers
on the concerns that such an amendment places fiscal policy in
a straitjacket and upsets the balance within Congress, and
between the executive and judicial branches of Government.
These two issues are legitimate points of discussion; however,
the real point to be remembered is that the nation's budget
deficits are simply out of control, and a drastic dose of
constitutional medicine is required and must be taken in order
to restore this nation's health.
XIV. MINORITY VIEW OF MR. FEINGOLD
During the Committee's consideration of S.J. Res. 1, I
proposed but did not press for a vote on a Sense of the Senate
Resolution focused upon the fact that proposals being advanced
in the 104th Congress to enact middle class and other general
tax cuts are inconsistent with the goal of reducing the federal
deficit and achieving a balanced budget. I intend to raise this
issue at an appropriate point on the Senate floor and take this
opportunity to address this conflict.
I strongly believe that deficit reduction should be our
highest economic priority although I oppose the proposed
constitutional amendment because I do not believe that it is an
effective mechanism for bringing about real deficit reduction.
Indeed, I believe that the proposed constitutional amendment
will only make deficit reduction and a balanced budget more
difficult to achieve.
But irrespective of one's views of the efficacy of the
proposed constitutional amendment as a tool for deficit
reduction, it is essential to recognize that we simply cannot
cut taxes and sufficiently reduce the federal deficit at the
It is truly ironic that just as the 104th Congress begins
its deliberations over the balanced budget amendment to the
Constitution, a bidding war appears to be starting over
proposed tax cuts. Some proponents of such cuts have not even
identified any areas for spending reductions to offset the
costs of these tax cuts. The Administration has been far more
responsible in identifying specific areas for spending
reductions to pay for proposed tax cuts. Yet, those spending
reductions would be better used to continue to reduce the
federal deficit and move us towards a balanced budget.
The way to reduce the federal deficit is to enact specific
spending cuts. Enacting those spending cuts is a difficult and
painful process, as we have learned in the last two years.
Every federal program which is cut has a constituency that
struggles to maintain its funding, and many Americans, from
veterans to farmers, have made real sacrifices in the past two
years as the federal government has reduced spending in
specific areas in order to achieve deficit reduction. The
savings produced by the additional spending cuts under
consideration should be used to reduce the federal deficit, not
offset new tax cuts.
During the 103rd Congress, we made a good start on reducing
the federal deficit created in large part by the irresponsible
budget policies of the 1980's. President Clinton's 1993 deficit
reduction package was a critical turning point in our fight to
reduce the deficit. We are now in the third straight year of
progressively lower deficits, something that has not happened
since Harry Truman was President.
But there is still a great deal to be done, and there are
signs that the progress that we have made is at considerable
risk. The new tax cut fever is the most recent example of how
far we seem to be straying from the path toward economic
It is interesting to note that some of the most vocal
supporters of the proposed constitutional amendment are also
leading the stampede to cut taxes. That should serve as a
warning to anyone who believes that the proposed change to our
Constitution will do anything to actually lower our budget
Though obviously contradictory economic policy goals, the
balanced budget amendment and various tax cut proposals do
share one common theme--they are both politically appealing
proposals that involve no tough or painful choices.
Indeed, those who advocate both the balanced budget
amendment and new tax cuts also refuse to reconcile the
inconsistencies of the two proposals by offering a specific
plan to balance the budget while cutting taxes.
Yet, contrary to the conventional and cynical wisdom that
produces both the proposed constitutional amendment and the new
tax cut proposals, many taxpayers recognize that these tax cut
proposals, however appealing, are poor public policy. They
recognize the importance of reducing the federal budget
deficit, and getting our nation's fiscal house in order.
In just the last few weeks, phone calls and letters to my
office have been running about 10 to 1 in favor of reducing the
deficit over cutting taxes.
A gentleman from Birnamwood, Wisconsin, wrote to me:
By all means, cut government spending. But use that
savings to eliminate the deficit and pay down the debt
that threatens to overwhelm us. That is the only
responsible thing to do.
A woman from Cornucopia, Wisconsin, wrote:
* * * I can't figure out why this is happening--this
race to cut taxes--when the majority of people,
according to all I've seen, heard, and read, don't
care. We want the deficit cut, and we want our money
spent more wisely * * *
And a gentleman from Waupaca, Wisconsin, wrote this to me:
I want you to know that I strongly support your
position against the proposed tax cuts. With an income
of $50,000 I guess I would benefit from most of the tax
cut plans, but I feel the benefit would be short lived
and would clearly be detrimental to the country. I hope
that you will continue to oppose these tax cut plans
that are clearly nothing more than attempts to buy
These views are widely shared outside Wisconsin as well. A
USA Today/CNN poll published on December 20 found that 70 of
those polled said if Congress is able to cut spending, then
reducing the deficit is a higher priority than new tax cuts.
It is frustrating to hear constituents, who could certainly
use the money, urge Congress to make deficit reduction a higher
priority than tax cuts, and then watch the rush to see who can
propose the biggest tax cut.
With or without a balanced budget amendment, we will not
make any progress on reducing the federal deficit if we get
into another bidding war on tax cuts.
XV. Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the committee finds no changes in
existing law caused by passage of Senate Joint Resolution 1.