Scales Tip Among Senate GOP for Balanced Budget Amendment

March 31, 2011

Today Senate Republicans unveiled legislation (S.J. Res 10) to adopt a balanced budget amendment to the U.S. Constitution that has the support of all 47 members of the conference. Republicans had been previously split between two competing versions (S.J. Res. 3 and S.J. Res. 5). The united group will now work on gaining Democratic support. Senate Minority Leader Mitch McConnell (R-KY) wants a vote on the proposal to accompany a vote to increase the debt limit.

Provisions of the new proposal include:

mandating that the president submit a balanced budget each fiscal year
federal spending each fiscal year is capped at 18 percent of GDP (a 2/3 majority vote of both houses is required to override this provision except in times of declared war, when a simple majority suffices, and a 3/5 vote is needed during certain military conflicts that are not officially wars)
a 2/3 vote of both houses is required to run a “specific deficit” in any given fiscal year (a simple majority is required during a declared war and a 3/5 vote during certain military conflicts that are not officially wars)
a 2/3 vote of both houses is required for any bill that “that imposes a new tax or increases the statutory rate of any tax or the aggregate amount of revenue”
a 3/5 vote is required to raise the debt limit except during declared war

Rep. Vern Buchanan (R-FL) introduced legislation identical to the new Senate measure in the House (H.J. Res. 52), but the House has yet to achieve the unity of the Senate, with several balanced budget amendment bills offered so far this year (see table below). The House bill with the most support is H.J. Res. 2 with 215 co-sponsors, including several Democrats. In addition, the bipartisan Balanced Budget Amendment Caucus in the House today announced its new members, bringing its membership to over 60 legislators.

Bill & Sponsor	Basic Provisions	Raising Debt Limit Requires:	Raising Taxes Requires:	Takes Effect	Other
H.J. Res. 1 Rep. Goodlatte (R-VA)	Spending cannot exceed revenue, unless approved by 3/5 majority President must submit balanced budget to Congress	3/5 majority	3/5 majority	2nd FY after ratification, or 1st FY after Dec 2016	Caps federal spending at 20% of GDP, unless approved by 2/3 majority Exemption for military conflicts
H.J. Res. 2 Rep. Goodlatte (R-VA)	Spending cannot exceed revenue, unless approved by 3/5 majority President must submit balanced budget to Congress	3/5 majority	Simple majority	2nd FY after ratification, or 1st FY after Dec 2016	Exemption for military conflicts
H.J. Res. 4 Rep. Buchanan (R-FL)	Spending cannot exceed revenue, unless approved by 3/5 majority President must submit a balanced budget to Congress	3/5 majority	Simple majority	2nd FY after ratification, or 1st FY after Dec 2016	Exemption for military conflicts and natural disasters
H.J. Res. 10 Rep. Cuellar (D-TX)	Spending cannot exceed revenue, unless approved by 3/5 majority President must submit a balanced budget to Congress	Not specified	Not specified	2nd FY after ratification, or 1st FY after Dec 2020	Balanced budget must be achieved without reducing disbursements from OASI or DI Trust Funds Exemption for military conflicts
H.J. Res. 11 Rep. Broun (R-GA)	Spending cannot exceed revenue, unless approved by 2/3 majority President must submit balanced budget to Congress	2/3 majority	2/3 majority	2nd FY after ratification	Total spending cannot exceed previous years' plus population growth and inflation Any surplus revenue must be returned to taxpayers Exemption for declarations of war
H.J. Res. 14 Rep. Emerson (R-MO)	Congress and President must agree on an estimate of total revenue through a joint resolution-Congress cannot spend more than this level, unless approved by 3/5 majority President must submit a balanced budget to Congress	3/5 majority	Simple majority	2nd FY after ratification	Budget deficits must be paid for the following fiscal year Exemption for declarations of war
H.J. Res. 18 Rep. Terry (R-NE)	Spending cannot exceed revenue, unless approved by 3/5 majority President must submit a balanced budget to Congress	3/5 majority	3/5 majority	2nd FY after ratification	Exemption for military conflicts
S.J. Res. 3 Sen. Hatch (R-UT) & Sen. Cornyn (R-TX)	Spending cannot exceed revenue, unless approved by 2/3 majority President must submit a balanced budget to Congress	Not specified	2/3 majority	4th FY after ratification	Caps federal spending at 20% of GDP, unless approved by 2/3 majority Exemption for military conflicts or upon 2/3 majority approval
S.J. Res. 5 Sen. Lee (R-UT) & Sen. Kyl (R-AZ)	Spending cannot exceed revenue, unless approved by 2/3 majority President must submit a balanced budget to Congress	2/3 majority	2/3 majority	2nd FY after ratification	Caps federal spending at 18% of GDP, unless approved by 2/3 majority
S.J. Res. 4 Sen. Udall (D-CO) & Sen. Shelby (R-AL)	Spending cannot exceed revenue, unless approved by 3/5 majority	Not specified	Not specified	1st FY after ratification	Caps federal spending at 20% of previous year's GNP, unless approved by 3/5 majority Exemption for declarations of war
H.J. Res. 52 Rep. Buchanan (R-FL)	Spending cannot exceed revenue, unless approved by 2/3 majority	3/5 majority	2/3 majority	5th FY after ratification	Caps spending at 18% of GDP unless approved by 2/3 majority Exemption for declaration of war *H.J. Res 52 is the House version of S.J. Res. 10
S.J. Res. 10	Spending cannot exceed revenue, unless approved by 2/3 majority	3/5 majority	2/3 majority	5th FY after ratification	Caps spending at 18% of GDP unless approved by 2/3 majority Exemption for declaration of war *S.J. Res. 10 is identical to H.J. Res. 52
H.J. Res. 23 Rep. Schweikert (R-AZ)	Spending cannot exceed revenue, unless approved by 2/3 majority	2/3 majority	2/3 majority	Not specified	Caps spending at 18% of GDP unless approved by 2/3 majority
H.J. Res. 41 Rep. DeFazio (D-OR)	Spending cannot exceed revenue, unless approved by 3/5 majority President must submit a balanced budget to Congress	Not specified	Simple majority (to reduce or increase revenue)	2nd FY after ratification, or 1st FY after Dec 2016	Exemption for declaration of war Social Security disbursements cannot be reduced to balance the budget
H.J. Res. 73	Spending limited to adjusted revenues from three prior years Allows deficits during recessions	Not specified	Not specified	Begins 10-year transition no sooner than 90 days after ratification	3/4 requirement to waive enforcement in an emergency
S.J. Res. 24 Sen. Mark Udall (D-CO)	Spending cannot exceed revenue, unless approved by 3/5 majority President must submit a balanced budget to Congress	Not specified	Not specified		Exemption for declaration of war Creates a Social Security lockbox that protects SS revenue and outlays from the balanced budget requirement Prohibits Congress from enacting tax breaks for those earning over $1 million a year unless the budget is in surplus

Achieving consensus on one approach is just the first of many obstacles facing a balanced budget amendment. Amending the Constitution requires a 2/3 majority vote in each house of Congress and then 3/4 of the states must ratify it.

The push for a balanced budget amendment has brought critical attention to the need for changes to the budget process. Though this approach has many merits, there are also some concerns that we raised in a previous blog. One of the points we brought up is that our deficit has grown so large and the projections for future deficits so bad that balancing the budget in the near future is currently an unrealistic goal. The new Senate bill appears to address this concern by making its effective date five years after ratification of the amendment.

The Peterson-Pew Commission on Budget Reform has offered budget process reform recommendations to promote the establishment and enforcement of aggressive, yet achievable, fiscal goals through targets, triggers and transparency. Most of all, it must be recognized that budget process reforms alone, though important, will not solve our fiscal problems. That is why a comprehensive, multiyear fiscal plan is so essential.