January 1995 Home   Newsletters

February 1995

March 1995

President's Message: League Explores Social Issues (Suzanne Meisenzahl)
Congratulations, Meda!
League Faces Full Vote Count Schedule (Arlene Ellis)
Join the Phone Bank
Voter Service to Tackle Voters Guide for 1996 Election (Arlene Ellis)
Orientation Session Scheduled (Grace Furukawa)
UH Seeks Women for Health Study
City Council Observors Needed
Board Members Sought
League Responds to Contract with America
Analysis of the Proposed Balanced Budget Amendment
League Reacts to Proposed Job Creation Act
Tell it to Washington
Education Bill Analyzed (Marion Saunders)
League Positions Outlined
Congratulations, Arlene!
League Presents a Discussion on Violence
Letters to the Editor (Mildred Walston)
Good News and Bad News
Water Allocation Issues Studied (Carol Kleppin)

Analysis of the Proposed Balanced Budget Amendment

The League of Women Voters opposes any federal balanced budget constitutional amendment. A constitutional amendment would permanently put the federal budget and U.S. economic policy in an inflexible straitjacket controlled by a minority in Congress.

The League's position on the federal deficit, announced in 1986, explicitly rejects a federal balanced budget amendment as a means for achieving deficit reduction: "The League recognizes that deficit spending is sometimes appropriate and therefore opposes a constitutionally mandated balanced budget for the federal government.

The balanced budget amendment is an unsound public policy proposal with dangerous economic and governmental consequences. Passage and ratification of the amendment would:

  • Permanently put U.S. fiscal policy in a strait-jacket and seriously endanger the economy by making it virtually impossible for the federal government to stimulate the economy through deficit spending during serious recessions or coordinate U.S. fiscal policy with other nations to stabilize the global economy.

  • Seriously undermine majority rule in Congress by requiring a three-fifths majority for passage of any legislation designed to meet federal obligations that could produce a deficit, including natural disaster assistance and appropriations to cover major bank failures.

  • Inappropriately shift power from Congress to the President and the Courts. During the course of a fiscal year, what happens if Congress and the President fail to reach an agreement on eliminating a potentially illegal deficit? Would the Courts decide? How long would it take? Could the President make unilateral cuts? These crucial questions are not addressed.

  • Give rise to more "creative" and confusing accounting practices in Congress designed to get around the provisions of the amendment.

  • Require massive cutbacks in government programs with resulting economic dislocations and inequities in program cuts for the least powerful in our society.

  • Discourage the introduction of new proposals such as comprehensive health care reform. Financing of any new program would face a nearly insurmountable barrier. Any new tax increase would require a threefifths vote of Congress, regardless of the effect on the deficit.

  • The argument that "many states are required to balance their budgets so why not the feds?" is misleading. According to a 1993 General Accounting Office report on state balanced budget requirements:

    1. Many states are required to balance their operating budgets but not their capital budgets. The federal balanced budget proposal makes no distinction between operating and capital budgets.

    2. States may require the governor or state legislature to submit or enact a balanced budget but not require that a year-end balance be achieved. These states maintain the flexibility to deal with unexpected economic developments that can push a budget into deficit.

    3. Many states have "rainy day" reserves that they can draw on when their budgets are in deficit. No such funds would be possible under the federal balanced budget proposal.

The League shares public concern about the federal deficit but the solution to the deficit problem must not result in abdication of congressional responsibility. Current deficit reduction plans are on the right track. The five-year deficit reduction plan begun in 1993 is expected to reduce the deficit by two-thirds by the fiscal year 1999.

Consistent, gradual reductions in the deficit should accomplish the deficit reduction we seek without the damaging economic and governmental consequences inherent in a constitutional amendment requiring the federal budget to be in balance.

Constitutional amendments must pass Congress by an absolute two-thirds majority of each house, and then be ratified by three-fourths of the states. No Presidential signature is required. In the Senate, that means 67 votes, in the House, 290 votes. Thirty-eight states must ratify.

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