[House Report 104-3]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                      104-3
_______________________________________________________________________


 
                BALANCED BUDGET CONSTITUTIONAL AMENDMENT

                                _______


  January 18, 1995.--Referred to the House Calendar and ordered to be 
                                printed

_______________________________________________________________________


 Mr. Hyde, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                             together with

                    DISSENTING AND ADDITIONAL VIEWS

                       [To accompany H.J. Res. 1]

      [Including cost estimate of the Congressional Budget Office]
    The Committee on the Judiciary, to whom was referred the 
joint resolution (H.J. Res. 1) proposing a balanced budget 
amendment to the Constitution of the United States, having 
considered the same, report favorably thereon with an amendment 
and recommend that the joint resolution as amended do pass.
    The amendment is as follows:
    Strike out all after the resolving clause and insert in 
lieu thereof the following:


That the following article is proposed as an amendment to the 
Constitution of the United States, 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 for ratification:

                              ``Article --

    ``Section 1. Prior to each fiscal year, Congress shall, by law, 
adopt a statement of receipts and outlays for such fiscal year in which 
total outlays are not greater than total receipts. Congress may, by 
law, amend that statement provided revised outlays are not greater than 
revised receipts. Congress may provide in that statement for a specific 
excess of outlays over receipts by a vote directed solely to that 
subject in which three-fifths of the whole number of each House agree 
to such excess. Congress and the President shall ensure that actual 
outlays do not exceed the outlays set forth in such statement.
    ``Section 2. No bill to increase tax revenue shall become law 
unless approved by a three-fifths majority of the whole number of each 
House of Congress.
    ``Section 3. Prior to each fiscal year, the President shall 
transmit to Congress a proposed statement of receipts and outlays for 
such fiscal year consistent with the provisions of this Article.
    ``Section 4. 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 faces 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. Total receipts shall include all receipts of the 
United States except those derived from borrowing and total outlays 
shall include all outlays of the United States except those for the 
repayment of debt principal.
    ``Section 6. The amount of the debt of the United States held by 
the public as of the date this Article takes effect shall become a 
permanent limit on such debt and there shall be no increase in such 
amount unless three-fifths of the whole number of each House of 
Congress shall have passed a bill approving such increase and such bill 
has become law.
    ``Section 7. All votes taken by the House of Representatives or the 
Senate under this Article shall be rollcall votes.
    ``Section 8. Congress shall enforce and implement this Article by 
appropriate legislation.
    ``Section 9. This Article shall take effect for the fiscal year 
2002 or for the second fiscal year beginning after its ratification, 
whichever is later.''.
                        Explanation of Amendment

    Inasmuch as H.J. Res. 1 was ordered reported with a single 
amendment in the nature of a substitute, the contents of this 
report constitute an explanation of that amendment.

                          summary and purpose

    H.J. Res. 1, the proposed balanced budget amendment to the 
Constitution of the United States, is designed to discourage 
the federal government from engaging in deficit spending, 
increasing taxes, and raising the ceiling on debt held by the 
public. The amendment generally requires three-fifths votes of 
each House's total membership for laws providing for (1) an 
excess of outlays over receipts [section 1], (2) an increase in 
tax revenue [section 2], and (3) a higher debt limit [section 
6]. In addition, the President is required to submit balanced 
budgets to Congress [section 3]. Congress will be able to waive 
the Amendment's requirements based on a declaration of war; an 
alternative waiver mechanism requires a joint resolution (that 
is supported by a majority of the total membership in each 
House and becomes law) declaring ``an imminent and serious 
military threat to national security,'' [section 4]. The 
constitutional amendment takes effect ``for the fiscal year 
2002 or for the second fiscal year beginning after its 
ratification, whichever is later,'' [section 9].

                  constitutional amendment procedures

    Congress proposes constitutional amendments by two-thirds 
votes (of members voting) in both houses of Congress. The 
alternative constitutional procedure of Congress calling a 
convention for proposing amendments--on application of the 
legislatures of two-thirds of the states--is unused to date, 
although at one point 32 of the requisite 34 states called for 
a constitutional convention in response to the balanced budget 
issue. A constitutional amendment--whether proposed by two-
thirds votes in Congress or by a constitutional convention--
must be ratified by the legislatures or conventions in three-
fourths of the states in accordance with the mode of 
ratification proposed by Congress; the preamble to H.J. Res. 1 
proposes ratification by state legislature, the process 
generally prescribed.

                                hearings

    Representative Joe Barton, Chairman Henry J. Hyde, 
Representative Randy Tate and Representative Pete Geren 
introduced H.J. Res. 1 on January 4, 1995, the first day of the 
104th Congress. The Subcommittee on the Constitution held two 
days of hearings on the proposed Balanced Budget Amendment on 
Monday, January 9 and Tuesday, January 10, 1995. At its hearing 
on January 9, the Subcommittee heard testimony from the 
following witnesses: Representative Joe Barton, Representative 
Bob Franks, Representative Dan Schaefer, Representative Bill 
Archer, Honorable Alice M. Rivlin, Director, Office of 
Management and Budget, Honorable William P. Barr, former 
Attorney General, Dr. Martin Anderson, Senior Fellow, Hoover 
Institution (Stanford University), and Dr. William A. Niskanen, 
Chairman, CATO Institute. On January 10, the Subcommittee heard 
testimony from the following witnesses: Representative Richard 
Gephardt, Minority Leader of the House of Representatives, 
Representatives Charles Stenholm, Representative Robert Wise, 
Representative Karen McCarthy, Honorable Jeffrey N. Wennberg, 
Mayor of Rutland, Vermont, on behalf of the National League of 
Cities, Honorable John Hamre, Under Secretary of Defense, 
Robert Ball, former Commissioner, Social Security 
Administration, Dr. Robert Eisner, Professor of Economics 
Emeritus, Northwestern University, and Alan B. Morrison, Public 
Citizen.
    Balanced budget constitutional amendment related hearings 
had previously been held in the Committee on the Judiciary's 
Subcommittee on Monopolies and Commercial Law in 1979-1980, 
1981-1982, and 1987, and in the successor Subcommittee on 
Economic and Commercial Law in 1990.
    It is important to note and emphasize that until this year 
the full Committee on the Judiciary had never considered a 
balanced budget proposal in a markup session. Prior to this 
Congress, the Committee had never reported a balanced budget 
amendment to the whole House. Instead, such amendments were 
considered in the House of Representatives only after discharge 
petition efforts were successful.

                    Prior house floor consideration

    Balanced budget constitutional amendments have enjoyed 
strong support in Congress for many years. Lopsided majorities 
in the House of Representatives have voted in favor of such 
amendments, brought to the Floor through successful discharge 
petition efforts, on four occasions--236 yeas to 187 nays in 
1982, 279 yeas to 150 nays in 1990, 280 yeas to 153 nays in 
1992, and 271 yeas to 153 nays in 1994--but have fallen short 
on each occasion of the constitutionally required two-thirds 
vote. The Senate mustered the requisite two-thirds vote in 1982 
(69 yeas to 31 nays) but fell short in 1986 (66 yeas to 34 
nays) and 1994 (63 yeas to 37 nays).

         need for the balanced budget constitutional amendment

    The major impetus for the balanced budget constitutional 
amendment is the rapidly mounting federal debt and the impact 
of climbing interest payments on future generations of 
Americans. Legislative efforts to move in the direction of a 
balanced budget have not prevented unacceptable levels of 
deficit spending. Deficit targets in the Balanced Budget and 
Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings 
Act) have been relaxed periodically, and new budget control 
mechanisms have not offered a realistic long term prospect of 
continued deficit reduction.
    The current and projected figures relating to the federal 
government's fiscal situation are both inescapable and 
staggering. The federal debt tripled during the last ten fiscal 
years--approximately $4.7 trillion today. The federal deficit 
for fiscal year 1995 is projected at $176 billion. In fiscal 
year 1996, the deficit is expected to increase to $207 billion. 
The anticipated deficit will reach $284 billion in fiscal year 
2000--with projections for annual increases thereafter and a 
fiscal year 2005 deficit of $421 billion. The federal 
government has run budget deficits in 33 out of the last 34 
years.
    The net interest on the national debt for this fiscal year 
(FY 1995) is projected at $235 billion. Next fiscal year, the 
interest on the national debt is expected to increase to $260 
billion. By the year 2000, the current estimates are that the 
interest on the debt will reach $310 billion. Interest on the 
national debt is now the third largest single item in the 
federal budget, after social security and defense.
    In view of these statistics, the need for constitutional 
constraints is greater than ever. The amendment's effective 
date of FY 2002--or later depending on the timetable for state 
ratification--is designed to provide impetus for phased deficit 
reductions in intervening years, facilitating an orderly 
transition to a balanced budget.
    The adoption of the balanced budget constitutional 
amendment would be more than a mere symbolic act. It would have 
a powerful impact on federal fiscal policies by establishing a 
binding legal framework--a disciplined structure--requiring 
Congress to make tough decisions. A constitutional amendment is 
not a substitute for difficult legislative choices but rather a 
catalyst for congressional action.
    A Balanced Budget Constitutional Amendment is consistent 
with the nature of our Federal Constitution which already 
addresses economic issues in various contexts. Congressional 
powers delineated in the Constitution include laying and 
collecting taxes, imposing customs duties and tariffs, paying 
debts of the United States, borrowing money, regulating 
interstate commerce and commerce with foreign nations, and 
coining money. The fifth and fourteenth amendments include 
protections of property rights, and the sixteenth amendment 
authorizes the income tax. Because of the substantial attention 
the Constitution already gives to economics, arguments that 
fiscal policy does not belong in the Constitution are 
unconvincing.
    The Framers and leaders in government during most of our 
national history accepted balanced budget principles. For that 
reason, mandating a balanced budget would have been superfluous 
in earlier times. Today, in an era of deficit spending, the 
balanced budget constitutional amendment is needed to give 
expression to a practice accepted widely for so many years--
namely, spending within our means.
    New rules are essential to overcome the pro-spending 
institutional bias of Congress. This bias results from the 
interests of beneficiaries of various programs that are more 
focused than the general public interest in deficit reduction. 
Future generations that will bear the greatest costs of 
excessive spending are not formally represented in the 
political process--and for that reason need special 
protections.
    Governmental flexibility is not compromised by requiring 
supermajority votes to overcome balanced budget requirements. 
Three-fifths vote provisions (with war and national security 
related exceptions) do not preclude deficit spending, tax 
increases, and increases in the debt ceiling but rather 
discourage such action from being taken lightly.
    The three-fifths vote required for legislation to increase 
tax revenue is an important feature of this constitutional 
amendment. Parallelism among various voting requirements is 
necessary to discourage excessive reliance on tax increases 
rather than spending cuts to balance the budget.
    Congress today cannot reasonably be expected to spell out 
the details of spending cuts through Fiscal Year 2002. The 
anticipated implementation of the new fiscal rules contained in 
H.J. Res. 1 will facilitate consensus on deficit reductions--
consensus that history teaches us remains illusive in the 
absence of a constitutional framework for effectuating a 
balanced budget. A constitutional amendment, by giving 
expression to the inevitability of a new fiscal reality, will 
set the parameters for congressional budget deliberations.
    Predicting the details of economic developments years in 
advance is fraught with difficulties because the world 
changes--as events of recent years amply demonstrate. We can 
agree on the need to avoid saddling our children and 
grandchildren with a progressively greater debt burden without 
necessarily knowing today what the priorities will be among 
competing programs seven years hence. Submission of a balanced 
budget constitutional amendment to the states is an important 
first step that no longer can be delayed.
    Some state officials advocate the inclusion of a 
prohibition on new unfunded mandates in the Balanced Budget 
Constitutional Amendment. They are concerned that federal 
government cuts in expenditures and programs--to achieve a 
balanced budget--may be accompanied by the imposition through 
congressional enactments of new requirements on the states 
without providing the funds to carry them out. In that regard, 
the Committee is hopeful that the legislation (H.R. 5) on 
unfunded mandates currently pending in Congress will be 
responsive to state needs. The issue may have significant 
implications for the willingness of the legislatures of three-
fourths of the states to ratify a constitutional amendment.

    the balanced budget constitutional amendment and social security

    A continuation of deficit spending poses the greatest long 
term threat to the integrity of Social Security. This is true 
both because mushrooming interest payments on the national debt 
increase pressures to reduce expenditures for vital programs--
such as Social Security--and because an increasing national 
debt can erode the value of Social Security and other trust 
fund surpluses invested in Treasury securities by fueling the 
fires of inflation. The balanced budget constitutional 
amendment will enhance rather than detract from the protection 
Social Security enjoys in the years ahead.
    The Committee concluded that exempting Social Security from 
computations of receipts and outlays would not be helpful to 
Social Security beneficiaries. Although Social Security 
accounts are running a surplus at this time, the situation is 
expected to change in the future with a Social Security related 
deficit developing. If we exclude Social Security from balanced 
budget computations, Congress will not have to make adjustments 
elsewhere in the budget to compensate for this projected 
deficit. The Judiciary Committee changed H.J. Res. 1 as 
originally introduced in a way that protects Social Security--
by exempting trust fund investments from the strictures of 
Section 6--the debt ceiling provision.
    Social Security is a statutory program that is not referred 
to in the Constitution. Since Congress possesses the 
legislative authority to change the Social Security program, 
specifically referring to ``Social Security'' in the 
Constitution could create a giant loophole allowing Congress to 
call anything Social Security and thus evade balanced budget 
requirements.
    The Committee is confident the United States will not 
violate its commitment to older Americans. The Social Security 
program enjoys broad congressional support. If we need to 
engage in deficit spending to protect Social Security, a three-
fifths congressional vote can authorize it. The balanced budget 
constitutional amendment, by discouraging spending for less 
important purposes, enhances rather than detracts from the 
protection Social Security will enjoy in the years ahead.

                     enforcement and implementation

    The Committee expects that Congress and the President will 
fully comply with the terms and requirements of the Balanced 
Budget Constitutional Amendment. Those who challenge this 
assumption overlook both the regard the American people have 
for their Constitution and our national tradition of respect 
for the rule of law. Members of Congress and the President take 
an oath of office to uphold the Constitution. There is no 
reason to assume that they will disregard their obligation or 
violate their trust.
    The operational details for implementing the Amendment will 
be spelled out in legislation--as Section 8 explicitly 
contemplates--with limited judicial involvement as a last 
resort. In that regard, the Committee endorses former Attorney 
General William P. Barr's analysis of the constraints on an 
excessive judicial role. His testimony before the Subcommittee 
on the Constitution explains:

          I believe there are three basic constraints that will 
        tend to prevent the courts from becoming unduly 
        involved in the budgetary process: (1) the limitations 
        on the power of federal courts contained in Article III 
        of the Constitution--primarily the requirement of 
        standing; (2) the deference courts owe to Congress, 
        both under existing constitutional doctrines, and 
        particularly under section [8] of the Amendment itself, 
        which expressly confers enforcement responsibility on 
        Congress; and (3) the limits on judicial remedies 
        running against coordinate branches of government, both 
        that the courts have imposed upon themselves and that, 
        in appropriate circumstances, Congress may impose on 
        the courts.

    There are different dimensions to the standing requirement. 
A plaintiff must show ``injury in fact''--that he or she has 
suffered some concrete, particularized harm. In addition, a 
plaintiff must show that the specific injury was caused by and 
can be traced to the alleged illegal conduct. Third, a 
plaintiff must demonstrate that the relief sought is likely to 
redress the injury.
    A plaintiff cannot rely on generalized grievances and 
burdens shared by all citizens and taxpayers. Instead, a 
plaintiff must be able to show a specific injury that he/she 
has distinctively and uniquely sustained. Given the variety and 
complexity of the federal budget and budget legislation, 
private citizens generally are not going to be able to 
demonstrate the unique harm necessary to justify judicial 
intervention.
    Similarly, congressional standing has a very high 
threshold. Mr. Barr summarizes the current state of the law in 
his testimony:

          The Supreme Court has never recognized congressional 
        standing. * * * Those lower courts that have allowed 
        congressional standing have limited it in ways that 
        would greatly restrict its use in efforts to enforce 
        the Balanced Budget Amendment. First, Members must 
        demonstrate that they have suffered injury in fact by 
        dilution or nullification of their congressional voting 
        power. In addition, Members must still satisfy the 
        other requirements of Article III standing, including 
        the traceability and repressibility requirements. And 
        finally, under the doctrine of `equitable discretion,' 
        recognized by the D.C. Circuit, Members must show that 
        substantial relief could not otherwise be obtained from 
        fellow legislators through the enactment, repeal or 
        amendment of a statute.

    Section 8 of H.J. Res. 1 explicitly provides Congress with 
the authority to ``enforce and implement this Article by 
appropriate legislation.'' So, if the courts make a major 
revision in federal standing requirements in a balanced budget 
constitutional amendment related case--which appears unlikely--
Congress will be able to respond at the appropriate time. 
Alternatively, Congress can act in anticipation of that 
possibility. As Mr. Barr observes, ``One way to minimize the 
risk of such judicial activism is for Congress to take care in 
the wording of any particular statutes that are enacted in 
implementing the Amendment so as not to give rise to colorable 
claims of standing or private rights of action.'' Addressing 
standing in the body of the Amendment is unnecessary and 
inconsistent with historical experience in amending the 
Constitution.
    In those unusual situations where courts possibly reach the 
merits of cases involving the balanced budget constitutional 
amendment, judicial deference to congressional procedures and 
policy decisions generally can be anticipated. Courts, 
respectful of legislative prerogatives, are unlikely to 
overturn Congress' budgetary choices. If courts ever reach the 
point of finding a constitutional violation by Congress in the 
context of the balanced budget amendment, prudential 
considerations will inhibit intrusive remedial action. In any 
event, Congress can limit possible remedies in implementing 
legislation enacted pursuant to Section 8.

          explanation of changes in h.j. res. 1 as introduced

    The amendment incorporates three significant improvements 
in H.J. Res. 1 as introduced.
    First, the requirement of a three-fifths vote of the whole 
number of each House for legislation to increase ``receipts''--
in H.J. Res. 1 as introduced--now applies only to bills to 
increase ``tax revenue.'' The Committee narrowed the scope of 
section 2 because the word ``receipts'' is unnecessarily broad 
and over-inclusive. The change was needed to avoid triggering 
the three-fifths vote requirement when legislation provides for 
additional monies to go into the Treasury without proposing an 
actual increase in taxes or tax rates.
    There are a number of examples of such legislation. A debt 
collection bill could be designed to increase receipts. A bill 
imposing user fees undoubtedly would benefit the Treasury. 
Legislation strengthening the ability of the Internal Revenue 
Service to crack down on persons attempting to avoid their 
taxes could be expected to increase collections. No public 
policy justification exists, however, for making it more 
difficult to enact laws of this nature.
    None of these proposed changes in existing statutes impose 
new taxes or increase tax rates. A balanced budget 
constitutional amendment should discourage congressional 
attempts to increase the tax burden--not discourage better debt 
collection, the imposition of user fees, or more efficient 
steps to enforce compliance with existing tax law.
    Second, the description of debt for purposes of the 
permanent debt ceiling is changed by the Amendment from 
``Federal public debt'' to ``the debt of the United States held 
by the public.'' The change in terminology was needed to remove 
an apparently unintended obstacle to Social Security and other 
trust funds accumulating surpluses. Such surpluses, invested in 
Treasury securities, technically increase the public debt. An 
increase in the debt ceiling generally requires a three-fifths 
vote of each House's total membership.
    The objective of a supermajority vote requirement to 
increase the debt ceiling is to discourage government borrowing 
to pay for additional spending--not to discourage Social 
Security and other trust fund surpluses. Trust fund investments 
do not result in outlays exceeding receipts but rather 
represent transactions that are internal to the federal 
government. The change in terminology exempts trust fund 
investments from the strictures of Section 6--thus protecting 
Social Security.
    Third, the permanent debt limit may differ as a result of 
Full Committee action. Section 6 of H.J. Res. 1 as introduced 
fixes the permanent debt limit at the amount of debt on ``the 
first day of the second fiscal year beginning after the 
ratification of this Article. * * *'' If the states ratify the 
balanced budget constitutional amendment expeditiously, the 
permanent debt limit could be fixed at the level of debt long 
before the beginning of FY 2002.
    The general effective date provision (Section 9), however, 
specifies that the Article ``shall take effect for the fiscal 
year 2002 or for the second fiscal year beginning after its 
ratification, whichever is later.'' Under this section, the 
Article cannot take effect prior to Fiscal Year 2002--thus 
ensuring an appropriate and reasonable transition period during 
which the United States can implement phased deficit reductions 
to reach a balanced budget.
    Fixing the permanent debt ceiling at a lower level than the 
amount of debt at the time the Amendment takes effect places in 
doubt the validity of United States obligations. At the time 
the constitutional amendment takes effect and the requirement 
to balance the budget kicks in, we cannot find ourselves 
saddled with a debt ceiling that does not take account of 
amounts already owing. The change approved by the Committee on 
the Judiciary simply sets the debt ceiling at the amount of 
debt on the Article's effective date--which will be the first 
day of Fiscal Year 2002 or possibly later depending on the 
timetable for state ratification.

                       Committee action and Vote

    On January 11, 1995 the committee met to consider H.J. Res. 
1. As described earlier, during its consideration the committee 
adopted two amendments offered by Chairman Hyde by voice vote. 
The first Hyde amendment substituted the term ``tax revenue'' 
for the word ``receipts'' in section 2 of the Article. The 
second Hyde amendment clarified the language in section 6 with 
regard to the effective date of the Article and substituted the 
``amount of the debt of the United States held by the public'' 
in lieu of ``amount of Federal public debt.''
    The committee then considered the following amendments, 
none of which was adopted.
    1. An amendment by Mr. Frank to exempt the Federal Old-Age 
and Survivors Insurance Trust Fund and the Federal Disability 
Insurance Trust Fund from total receipts and total outlays. The 
amendment was defeated by a 16-19 rollcall vote.
        YEAS                          NAYS
Mr. Conyers                         Mr. Hyde
Mrs. Schroeder                      Mr. Moorhead
Mr. Frank                           Mr. Sensenbrenner
Mr. Schumer                         Mr. Gekas
Mr. Berman                          Mr. Coble
Mr. Boucher                         Mr. Smith
Mr. Bryant of Texas                 Mr. Schiff
Mr. Reed                            Mr. Gallegly
Mr. Nadler                          Mr. Canady
Mr. Scott                           Mr. Inglis
Mr. Watt                            Mr. Goodlatte
Mr. Becerra                         Mr. Buyer
Mr. Serrano                         Mr. Hoke
Ms. Lofgren                         Mr. Bono
Ms. Jackson Lee                     Mr. Heineman
Mr. McCollum                        Mr. Bryant of Tennessee
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr

    2. An amendment by Mr. Scott to exempt payments and 
benefits earned as a result of service in the Armed Forces, 
under programs established prior to ratification. The amendment 
was defeated by a 12-22 rollcall vote.
        YEAS                          NAYS
Mr. Conyers                         Mr. Hyde
Mrs. Schroeder                      Mr. Moorhead
Mr. Frank                           Mr. Sensenbrenner
Mr. Schumer                         Mr. McCollum
Mr. Boucher                         Mr. Gekas
Mr. Bryant of Texas                 Mr. Coble
Mr. Reed                            Mr. Smith
Mr. Nadler                          Mr. Schiff
Mr. Scott                           Mr. Gallegly
Mr. Serrano                         Mr. Canady
Ms. Lofgren                         Mr. Inglis
Ms. Jackson Lee                     Mr. Goodlatte
                                    Mr. Buyer
                                    Mr. Hoke
                                    Mr. Bono
                                    Mr. Heineman
                                    Mr. Bryant of Tennessee
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr
                                    Mr. Berman
                                    Mr. Watt

    3. An amendment by Mr. Berman to suspend the provisions of 
the Article in any fiscal year in which a declaration of war is 
in effect or in which the President determines, after 
consultation with Congress, that the United States faces an 
``imminent and serious military threat to national security.'' 
The amendment was defeated by a 5-30 rollcall vote.
        YEAS                          NAYS
Mr. Conyers                         Mr. Hyde
Mr. Schumer                         Mr. Moorhead
Mr. Berman                          Mr. Sensenbrenner
Mr. Boucher                         Mr. McCollum
Mr. Bryant of Texas                 Mr. Gekas
                                    Mr. Coble
                                    Mr. Smith
                                    Mr. Schiff
                                    Mr. Gallegly
                                    Mr. Canady
                                    Mr. Inglis
                                    Mr. Goodlatte
                                    Mr. Buyer
                                    Mr. Hoke
                                    Mr. Bono
                                    Mr. Heineman
                                    Mr. Bryant of Tennessee
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr
                                    Mrs. Schroeder
                                    Mr. Frank
                                    Mr. Reed
                                    Mr. Nadler
                                    Mr. Scott
                                    Mr. Watt
                                    Mr. Becerra
                                    Mr. Serrano
                                    Ms. Lofgren
                                    Ms. Jackson Lee

    4. An amendment by Mr. Reed to bar implementing legislation 
from impairing veterans' disability and death benefits, under 
programs established prior to ratification, from the coverage 
of the Article. The Reed amendment was defeated by a 13-18 
rollcall vote.
        YEAS                          NAYS
Mr. Conyers                         Mr. Hyde
Mrs. Schroeder                      Mr. Moorhead
Mr. Frank                           Mr. Sensenbrenner
Mr. Schumer                         Mr. Coble
Mr. Boucher                         Mr. Smith
Mr. Bryant of Texas                 Mr. Schiff
Mr. Reed                            Mr. Gallegly
Mr. Nadler                          Mr. Canady
Mr. Scott                           Mr. Inglis
Mr. Watt                            Mr. Goodlatte
Mr. Serrano                         Mr. Buyer
Ms. Lofgren                         Mr. Hoke
Ms. Jackson Lee                     Mr. Bono
                                    Mr. Heineman
                                    Mr. Bryant of Tennessee
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr

    5. An amendment by Ms. Jackson Lee providing that Congress 
may waive the provisions of the Article in any fiscal year that 
the President, in consultation with the Joint Chiefs of Staff, 
determines that the ``military readiness requirements'' of the 
Defense Department ``are not being fully funded.'' The Jackson 
Lee amendment was defeated by a 4-31 rollcall vote.
        YEAS                          NAYS
Mr. Conyers                         Mr. Hyde
Mr. Berman                          Mr. Moorhead
Mr. Scott                           Mr. Sensenbrenner
Ms. Jackson Lee                     Mr. McCollum
                                    Mr. Gekas
                                    Mr. Coble
                                    Mr. Smith
                                    Mr. Schiff
                                    Mr. Gallegly
                                    Mr. Canady
                                    Mr. Inglis
                                    Mr. Goodlatte
                                    Mr. Buyer
                                    Mr. Hoke
                                    Mr. Bono
                                    Mr. Heineman
                                    Mr. Bryant of Tennessee
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr
                                    Mrs. Schroeder
                                    Mr. Frank
                                    Mr. Schumer
                                    Mr. Boucher
                                    Mr. Bryant of Texas
                                    Mr. Reed
                                    Mr. Nadler
                                    Mr. Watt
                                    Mr. Becerra
                                    Mr. Serrano
                                    Ms. Lofgren

    6. An amendment by Mr. Conyers providing that the Article 
shall not take effect unless Congress has adopted a concurrent 
resolution setting forth a plan to achieve a balanced budget. 
Such plan would include: aggregate levels of new budget 
authority; totals of new budget authority and outlays for each 
major functional category; new budget authority and outlays on 
an account-by-account basis; an allocation of Federal revenues 
among major sources of such revenues; and a detailed list and 
description of the changes in Federal law required to carry out 
the plan. The Conyers amendment was defeated by a 14-19 
rollcall vote.\1\
        YEAS                          NAYS
Mr. Conyers                         Mr. Hyde
Mrs. Schroeder                      Mr. Moorhead
Mr. Frank                           Mr. Sensenbrenner
Mr. Schumer                         Mr. McCollum
Mr. Berman                          Mr. Gekas
Mr. Boucher                         Mr. Coble
Mr. Bryant of Texas                 Mr. Smith
Mr. Reed                            Mr. Schiff
Mr. Nadler                          Mr. Gallegly
Mr. Scott                           Mr. Canady
Mr. Watt                            Mr. Inglis
Mr. Becerra                         Mr. Goodlatte
Mr. Serrano                         Mr. Buyer
Ms. Lofgren                         Mr. Hoke
Ms. Jackson Lee                     Mr. Bono
                                    Mr. Bryant of Tennessee
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr

    \1\ Mr. Heineman was present at the time the rollcall was taken but 
his vote was not recorded by the clerk. Mr. Heineman subsequently 
requested that the record be corrected to indicate he was present and 
that he voted in the negative.

    7. An amendment by Mr. Nadler to section 2 of Article, 
stating that a three-fifths majority vote in each House of 
Congress would not be required for bills ``providing for more 
effective measures to enforce the tax laws.'' The Nadler 
amendment was defeated by a 14-20 rollcall vote.
        YEAS                          NAYS
Mr. Conyers                         Mr. Hyde
Mrs. Schroeder                      Mr. Moorhead
Mr. Frank                           Mr. Sensenbrenner
Mr. Schumer                         Mr. McCollum
Mr. Boucher                         Mr. Coble
Mr. Bryant of Texas                 Mr. Smith
Mr. Reed                            Mr. Schiff
Mr. Nadler                          Mr. Gallegly
Mr. Scott                           Mr. Canady
Mr. Watt                            Mr. Inglis
Mr. Becerra                         Mr. Goodlatte
Mr. Serrano                         Mr. Buyer
Ms. Lofgren                         Mr. Hoke
Ms. Jackson Lee                     Mr. Bono
                                    Mr. Heineman
                                    Mr. Bryant of Tennessee
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr
                                    Mr. Berman

    8. An amendment by Mr. Becerra proposing to change the 
earliest effective date of the Article from fiscal year 2002 to 
fiscal year 2000. The Becerra amendment was defeated by a 7-28 
rollcall vote.
        YEAS                          NAYS
Mr. Conyers                         Mr. Hyde
Mrs. Schroeder                      Mr. Moorhead
Mr. Frank                           Mr. Sensenbrenner
Mr. Nadler                          Mr. McCollum
Mr. Scott                           Mr. Gekas
Mr. Becerra                         Mr. Coble
Ms. Jackson Lee                     Mr. Smith
                                    Mr. Schiff
                                    Mr. Gallegly
                                    Mr. Canady
                                    Mr. Inglis
                                    Mr. Goodlatte
                                    Mr. Buyer
                                    Mr. Hoke
                                    Mr. Bono
                                    Mr. Heineman
                                    Mr. Bryant of Tennessee
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr
                                    Mr. Schumer
                                    Mr. Berman
                                    Mr. Boucher
                                    Mr. Bryant of Texas
                                    Mr. Reed
                                    Mr. Watt
                                    Mr. Serrano
                                    Ms. Lofgren

    9. An amendment by Mr. Frank stating that ``Congress shall 
not implement this Article in a manner that increases financial 
burdens on States and local governments.'' The Frank amendment 
was defeated by a 15-20 rollcall vote.
        YEAS                          NAYS
Mr. Conyers                         Mr. Hyde
Mrs. Schroeder                      Mr. Moorhead
Mr. Frank                           Mr. Sensenbrenner
Mr. Schumer                         Mr. McCollum
Mr. Berman                          Mr. Gekas
Mr. Boucher                         Mr. Coble
Mr. Bryant of Texas                 Mr. Smith
Mr. Reed                            Mr. Schiff
Mr. Nadler                          Mr. Gallegly
Mr. Scott                           Mr. Canady
Mr. Watt                            Mr. Inglis
Mr. Becerra                         Mr. Goodlatte
Mr. Serrano                         Mr. Buyer
Ms. Lofgren                         Mr. Hoke
Ms. Jackson Lee                     Mr. Bono
                                    Mr. Heineman
                                    Mr. Bryant of Tennessee
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr

    10. An amendment by Mr. Watt to remove the requirement in 
section 6 of the Article for a three-fifths vote to raise the 
limit on federal debt held by the public. The Watt amendment 
was defeated by a 13-19 rollcall vote.
        YEAS                          NAYS
Mr. Conyers                         Mr. Hyde
Mrs. Schroeder                      Mr. Sensenbrenner
Mr. Frank                           Mr. McCollum
Mr. Schumer                         Mr. Coble
Mr. Boucher                         Mr. Smith
Mr. Reed                            Mr. Schiff
Mr. Nadler                          Mr. Gallegly
Mr. Scott                           Mr. Canady
Mr. Watt                            Mr. Inglis
Mr. Becerra                         Mr. Goodlatte
Mr. Serrano                         Mr. Buyer
Ms. Lofgren                         Mr. Hoke
Ms. Jackson Lee                     Mr. Bono
                                    Mr. Heineman
                                    Mr. Bryant of Tennessee
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr
                                    Mr. Bryant of Texas

    11. Mr. Boucher offered an amendment in the nature of a 
substitute. The Boucher substitute proposed to permit Congress, 
by majority vote, to waive the balanced budget requirements if 
``real economic growth has been or will be negative for two 
consecutive quarters.'' In addition, the substitute proposed 
that outlays for capital expenditures not be subject to 
balanced budget requirements. The amendment also provided that 
receipts and outlays of the Federal Old-Age and Survivors 
Insurance Trust Fund and the Federal Disability Insurance Trust 
Fund ``shall not be counted as receipts or outlays for purposes 
of this article.'' No three-fifths vote requirements were 
contained in the Boucher substitute. The Boucher substitute 
amendment was defeated by a 14-20 rollcall vote.
        YEAS                          NAYS
Mr. Conyers                         Mr. Hyde
Mrs. Schroeder                      Mr. Moorhead
Mr. Frank                           Mr. Sensenbrenner
Mr. Schumer                         Mr. McCollum
Mr. Berman                          Mr. Coble
Mr. Boucher                         Mr. Smith
Mr. Bryant of Texas                 Mr. Schiff
Mr. Reed                            Mr. Gallegly
Mr. Nadler                          Mr. Canady
Mr. Scott                           Mr. Inglis
Mr. Watt                            Mr. Goodlatte
Ms. Becerra                         Mr. Buyer
Ms. Lofgren                         Mr. Hoke
Ms. Jackson Lee                     Mr. Bono
                                    Mr. Heineman
                                    Mr. Bryant of Tennessee
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr
                                    Mr. Serrano

    12. Mr. Bryant offered an amendment in the nature of a 
substitute, providing that bills to increase revenue may be 
approved by a majority of the whole number of each House 
(instead of three-fifths). The Bryant substitute was defeated 
by a 4-30 rollcall vote.
        YEAS                          NAYS
Mr. Conyers                         Mr. Hyde
Mr. Bryant of Texas                 Mr. Moorhead
Mr. Scott                           Mr. Sensenbrenner
Ms. Jackson Lee                     Mr. McCollum
                                    Mr. Gekas
                                    Mr. Coble
                                    Mr. Smith
                                    Mr. Schiff
                                    Mr. Gallegly
                                    Mr. Canady
                                    Mr. Inglis
                                    Mr. Goodlatte
                                    Mr. Buyer
                                    Mr. Hoke
                                    Mr. Bono
                                    Mr. Heineman
                                    Mr. Bryant of Tennessee
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr
                                    Mrs. Schroeder
                                    Mr. Schumer
                                    Mr. Berman
                                    Mr. Boucher
                                    Mr. Reed
                                    Mr. Nadler
                                    Mr. Watt
                                    Mr. Becerra
                                    Mr. Serrano
                                    Ms. Lofgren

    13. Mr. Berman offered an amendment to section 4, providing 
that Congress may waive the balanced budget requirements in any 
fiscal year in which the President determines that Federal 
assistance under the Disaster Relief and Emergency Assistance 
Act is warranted. The Berman amendment was defeated by a 12-22 
rollcall vote.
        YEAS                          NAYS
Mr. Conyers                         Mr. Hyde
Mrs. Schroeder                      Mr. Moorhead
Mr. Berman                          Mr. Sensenbrenner
Mr. Boucher                         Mr. McCollum
Mr. Bryant of Texas                 Mr. Gekas
Mr. Reed                            Mr. Coble
Mr. Scott                           Mr. Smith
Mr. Watt                            Mr. Schiff
Mr. Becerra                         Mr. Gallegly
Mr. Serrano                         Mr. Canady
Ms. Lofgren                         Mr. Inglis
Ms. Jackson Lee                     Mr. Goodlatte
                                    Mr. Buyer
                                    Mr. Hoke
                                    Mr. Bono
                                    Mr. Heineman
                                    Mr. Bryant of Tennessee
                                    Mr. Chabot
                                    Mr. Flanagan
                                    Mr. Barr
                                    Mr. Schumer
                                    Mr. Nadler

    The committee then considered a motion ordering the 
previous question, a motion ordering H.J. Res. 1 favorably 
reported to the whole House, and three unanimous consent 
requests. Rollcall votes were ordered on each matter.
    14. Mr. Moorhead offered a motion on ordering the previous 
question. The previous question was ordered on a 20-14 rollcall 
vote.
        YEAS                          NAYS
Mr. Hyde                            Mr. Conyers
Mr. Moorhead                        Mrs. Schroeder
Mr. Sensenbrenner                   Mr. Schumer
Mr. McCollum                        Mr. Berman
Mr. Gekas                           Mr. Boucher
Mr. Coble                           Mr. Bryant of Texas
Mr. Smith                           Mr. Reed
Mr. Schiff                          Mr. Nadler
Mr. Gallegly                        Mr. Scott
Mr. Canady                          Mr. Watt
Mr. Inglis                          Mr. Becerra
Mr. Goodlatte                       Mr. Serrano
Mr. Buyer                           Ms. Lofgren
Mr. Hoke                            Ms. Jackson Lee
Mr. Bono
Mr. Heineman
Mr. Bryant of Tennessee
Mr. Chabot
Mr. Flanagan
Mr. Barr

    15. Final passage. Mr. Hyde moved to report H.J. Res. 1, as 
amended, favorably to the whole House. The resolution was 
ordered favorably reported by a rollcall vote of 20-13, with 
one Member (Ms. Jackson Lee) voting ``present.''
        YEAS                          NAYS
Mr. Hyde                            Mr. Conyers
Mr. Moorhead                        Mrs. Schroeder
Mr. Sensenbrenner                   Mr. Schumer
Mr. McCollum                        Mr. Berman
Mr. Gekas                           Mr. Boucher
Mr. Coble                           Mr. Bryant of Texas
Mr. Smith                           Mr. Reed
Mr. Schiff                          Mr. Nadler
Mr. Gallegly                        Mr. Scott
Mr. Canady                          Mr. Watt
Mr. Inglis                          Mr. Becerra
Mr. Goodlatte                       Mr. Serrano
Mr. Buyer                           Ms. Lofgren
Mr. Hoke
Mr. Bono
Mr. Heineman
Mr. Bryant of Tennessee
Mr. Chabot
Mr. Flanagan
Mr. Barr

    16. Mr. Sensenbrenner moved that the resolution be reported 
favorably to the House in the form of a single amendment in the 
nature of a substitute, incorporating the amendments adopted 
during committee consideration. The motion was approved by a 
rollcall vote of 17-14.
        YEAS                          NAYS
Mr. Hyde                            Mr. Conyers
Mr. Moorhead                        Mrs. Schroeder
Mr. Sensenbrenner                   Mr. Schumer
Mr. McCollum                        Mr. Berman
Mr. Gekas                           Mr. Boucher
Mr. Smith                           Mr. Bryant of Texas
Mr. Schiff                          Mr. Reed
Mr. Canady                          Mr. Nadler
Mr. Inglis                          Mr. Scott
Mr. Goodlatte                       Mr. Watt
Mr. Hoke                            Mr. Becerra
Mr. Bono                            Mr. Serrano
Mr. Heineman                        Ms. Lofgren
Mr. Bryant of Tennessee             Ms. Jackson Lee
Mr. Chabot
Mr. Flanagan
Mr. Barr

    17. Mr. Sensenbrenner moved that the staff be directed to 
make any technical and conforming changes. The motion was 
approved by a rollcall vote of 18-13.
        YEAS                          NAYS
Mr. Hyde                            Mr. Conyers
Mr. Moorhead                        Mrs. Schroeder
Mr. Sensenbrenner                   Mr. Schumer
Mr. McCollum                        Mr. Berman
Mr. Gekas                           Mr. Boucher
Mr. Smith                           Mr. Bryant of Texas
Mr. Schiff                          Mr. Reed
Mr. Canady                          Mr. Nadler
Mr. Inglis                          Mr. Scott
Mr. Goodlatte                       Mr. Becerra
Mr. Hoke                            Mr. Serrano
Mr. Bono                            Ms. Lofgren
Mr. Heineman                        Ms. Jackson Lee
Mr. Bryant of Tennessee
Mr. Chabot
Mr. Flanagan
Mr. Barr
Mr. Watt

    18. Mr. Sensenbrenner moved that the Chairman be authorized 
to go to conference on H.J. Res. 1, pursuant to House Rule XX. 
The motion was approved by a rollcall vote of 17-14.
        YEAS                          NAYS
Mr. Hyde                            Mr. Conyers
Mr. Moorhead                        Mrs. Schroeder
Mr. Sensenbrenner                   Mr. Schumer
Mr. McCollum                        Mr. Berman
Mr. Gekas                           Mr. Boucher
Mr. Smith                           Mr. Bryant of Texas
Mr. Schiff                          Mr. Reed
Mr. Canady                          Mr. Nadler
Mr. Inglis                          Mr. Scott
Mr. Goodlatte                       Mr. Watt
Mr. Hoke                            Mr. Becerra
Mr. Bono                            Mr. Serrano
Mr. Heineman                        Ms. Lofgren
Mr. Bryant of Tennessee             Ms. Jackson Lee
Mr. Chabot
Mr. Flanagan
Mr. Barr

                      section-by-section analysis

Section 1

    This section requires Congress, before the beginning of a 
fiscal year, to adopt a balanced budget--``a statement of 
receipts and outlays for such fiscal year in which total 
outlays are not greater than total receipts.'' The annual 
adoption of such a statement by law will prevent Congress from 
continuing to plan on deficit spending--as it has for so many 
years. Instead, Congress will commit itself each year to the 
details of implementing the balanced budget principle.
    In recognition of the fact that circumstances can change 
after the fiscal year begins, Congress is accorded flexibility 
to modify the details consistent with the balanced budget 
requirement. Thus, Congress would possess the authority to 
amend, by law, the statement of receipts and outlays ``provided 
revised outlays are not greater than revised receipts.''
    The Committee expects Congress generally to provide for 
balanced budgets but recognizes the need for congressional 
flexibility to respond appropriately to exigent circumstances. 
The national interest might require deficit spending, for 
example, in response to a natural disaster. During a period of 
recession, efforts to balance the budget might exacerbate the 
economic downturn. Section 1 takes such possibilities into 
account by permitting a statement of receipts and outlays to 
provide for ``a specific excess of outlays over receipts'' 
pursuant to a vote of three-fifths of the total membership of 
each House. In this context, a special voting requirement is 
essential to ensuring that Congress does not abuse its power to 
deviate from the new norm of a balanced budget.
    Finally, Section 1 clarifies the binding nature of 
expenditure limitations by requiring Congress and the President 
to ``ensure that actual outlays do not exceed'' statement 
outlays.

Section 2

    This section imposes a special voting requirement to 
increase taxes that is similar to the special voting 
requirement in Section 1 for adopting a statement delineating 
deficit spending. A bill increasing the tax burden must have 
the support of three-fifths of each House's total membership. 
The objective is to discourage excessive reliance on tax 
increases--rather than spending cuts--to achieve a balanced 
budget. Tax increases can depress economic activity and prove 
counterproductive to deficit reduction efforts.
    The Committee intends that legislation be viewed as a whole 
to determine whether the net effect is a tax increase. A bill 
designed in part to plug tax loopholes, for example, will not 
require a three-fifths vote under the mandate of Section 2 if 
the legislation also incorporates fully offsetting tax 
reductions. Congress retains the flexibility to modernize tax 
law provided the overall design does not make federal taxation 
more burdensome. In addition, legislation to enhance tax 
collections by improving efficiency or augmenting enforcement 
efforts is not a bill ``to increase tax revenue'' within the 
meaning of this section.

Section 3

    This section essentially requires the President to transmit 
a balanced budget to Congress prior to each fiscal year. It 
imposes a responsibility on the Executive Branch to make 
difficult choices among competing national priorities rather 
than permitting the President to distance himself (or herself) 
from the hard work of proposing spending cuts. Such a role for 
the Executive Branch will make it politically more difficult 
for Congress to disregard balanced budget principles.
    The goal of bringing outlays into line with receipts is 
important enough to provide roles for both the Executive and 
Legislative Branches. The submission of budgets is a familiar 
Executive Branch function that should be guided by a balanced 
budget requirement. This does not undercut in any way the 
President's authority to suggest an additional alternative 
budget for a given year. That is, the President may propose an 
additional budget that is out of balance if the President 
believes the national needs require it and is prepared to 
recommend to Congress that it should exercise its prerogative 
under Section 1 to provide--by a three-fifths vote--for a 
specific excess of outlays over receipts.

Section 4

    This section delineates circumstances that permit a waiver 
of the Balanced Budget Constitutional Amendment's provisions. 
Congressional authority to exercise a waiver ``for any fiscal 
year in which a declaration of war is in effect'' provides a 
very limited remedy because declarations of war are 
anachronistic in modern times. United States military actions 
since World War II have not involved declarations of war--which 
themselves can precipitate wider conflicts because of alliances 
among nations. The waiver based on an ``imminent and serious 
military threat to national security'' is more likely to be 
utilized. Under the language of Section 4, Congress may declare 
such a threat by a joint resolution--supported by a majority of 
each House's total membership--that becomes law. The need for 
congressional action on a joint resolution and presidential 
assent (or a veto override) helps to ensure that this waiver 
mechanism will not be abused. Although Section 4 does not 
delineate all circumstances that may justify deviating from the 
norms of this constitutional amendment, the three-fifths vote 
thresholds in other sections give Congress the necessary 
flexibility to respond to appropriate situations.
Section 5

    This section helps to define ``total outlays'' and ``total 
receipts''--terms that appear in Section 1. All monies received 
by the Treasury except borrowed funds are embraced by the term 
``total receipts,'' and all disbursements from the Treasury 
except funds for repurchase or retirement of federal debt are 
embraced by the term ``total outlays.''

Section 6

    This section sets the permanent limit on debt held by the 
public at the amount of debt on the effective date of the 
Article. Under the terms of Section 9, discussed later, that 
date cannot precede the first day of Fiscal Year 2002. 
Legislation to increase the permanent limit on debt held by the 
public requires approval of three-fifths of the whole number of 
each House--the same supermajority vote requirement applicable 
to approving a statement providing for an excess of outlays 
over receipts [Section 1] or approving a tax increase [Section 
2].
    Section 6 is designed to ensure that increases in the 
ceiling on debt held by the public require greater consensus 
than ordinary legislation. Such a requirement reflects 
sensitivity to the impact debt increases have on the interest 
burden imposed on future generations.
    The need for Section 6 relates in part to the fact that the 
national debt can increase--in spite of the mandate of Section 
1--if receipts for a given year fall short of anticipated 
receipts. Congress, in good faith, may adopt a statement of 
receipts and outlays providing for a balanced budget, but 
economic circumstances may prevent receipts from reaching their 
anticipated level. Congress and the President, under the terms 
of Section 1, are required to ``ensure that actual outlays do 
not exceed the outlays set forth in such statement'' but are 
not required to ensure that receipts equal the level delineated 
in the statement.
    Imposing such a requirement relating to receipts might 
prove counterproductive because initiatives during a year to 
increase receipts--perhaps in the form of a tax increase--to 
make up for a shortfall might exacerbate an economic downturn. 
A limit on the national debt, however, is needed both to ensure 
that Congress acts in good faith in estimating receipts and to 
ensure that Congress makes adjustments for shortfalls by 
authorizing surpluses in good years. Without a debt ceiling 
Congress would not have the necessary incentive to compensate 
for deficit spending.

Section 7

    This section requires that House and Senate votes under the 
Balanced Budget Constitutional Amendment be by rollcall. Such a 
provision fosters congressional accountability for decisions to 
approve deficit spending, increase taxes, or raise the debt 
limit.

Section 8

    This section provides for Congress to ``enforce and 
implement this article by appropriate legislation.'' This 
mandate for continued congressional involvement gives 
expression to a recognition that the broad language of the 
constitutional amendment cannot be effectuated without an 
active congressional role in delineating the details of 
implementation.

Section 9

    This section delineates the effective date of the 
constitutional amendment. It will take effect at the beginning 
of Fiscal Year 2002 or on the first day of the ``second fiscal 
year beginning after its ratification, whichever is later.'' 
Since the Article's preamble requires ratification by three-
fourths of the states ``within seven years after the date of 
its submission for ratification,'' Section 9's effective date 
provision is not open-ended. If Congress submits the Balanced 
Budget Constitutional Amendment to the states for ratification 
this year, the seven year deadline will expire in the year 
2002--and the amendment will take effect--if at all--not later 
than the beginning of Fiscal Year 2004.
    Section 9 contemplates a transition period of sufficient 
duration to permit the United States to move from deficit 
spending to a balanced budget without major economic 
dislocation. Although substantial spending cuts will require 
many adjustments, an implementation date of approximately six 
and half years or longer in the future will facilitate an 
orderly transition.

                      committee oversight findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.
         committee on government reform and oversight findings

    No findings or recommendations of the Committee on 
government Reform and Oversight were received as referred to in 
clause 2(l)(3)(D) of rule XI of the Rules of the House of 
Representatives.

               new budget authority and tax expenditures

    Clause 2(l)(3)(B) of House Rule XI is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               congressional budget office cost estimate

    In compliance with clause 2(l)(C)(3) of rule XI of the 
Rules of the House of Representatives, the Committee sets 
forth, with respect to the resolution, H.J. Res. 1, the 
following estimate and comparison prepared by the Director of 
the Congressional Budget Office under section 403 of the 
Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, January 13, 1995.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.J. Res. 1, a joint resolution proposing a balanced 
budget amendment to the Constitution of the United States, as 
ordered reported by the House Committee on the Judiciary on 
January 11, 1995.
    H.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 or to increase tax 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 
conflict that causes an imminent and serious military threat to 
national security. The amendment would have to be 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 attached table). 
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 
rates.
    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 of localities.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are James 
Horney, who can be reached at 226-2880, and Mark Grabowicz, who 
can be reached at 226-2860.
            Sincerely,
                                    Robert D. Reischauer, Director.

                                       ILLUSTRATIVE DEFICIT REDUCTION PATH                                      
                                    [By fiscal years, 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        -996
                             ===================================================================================
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 1996. 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 1996. 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.                                                                                     
                                                                                                                
                                                                                                                
Note.--NA = Not applicable.                                                                                     
                                                                                                                
                                                                                                                
Source: Congressional Budget Office.                                                                            

                     inflationary impact statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that H.J. 
Res. 1 will have no significant inflationary impact on prices 
and costs in the national economy.
                            DISSENTING VIEWS

    We reject this most recent effort of the new Republican 
majority to ``commercialize'' the Constitution by inserting 
into its sacred text an ill-defined, electoral ``promise'' to 
balance the budget that more aptly finds its home in the pages 
of the publication where it first appeared: TV Guide. If the 
political ploy behind this transparent effort is to play to a 
populist yearning, then it severely underestimates the wisdom 
and real desire of the American people to see their government 
take responsibility for balancing the budget--rather than 
simply taking credit for promising to do so after two more 
Presidential elections have languidly passed into history by 
the year 2002.
    All of the undersigned believe that the crushing federal 
deficit threatens the personal liberty and quality of life of 
every American and must be continually reduced until real 
balance is achieved. Some of us believe that such an effort can 
be properly conceived and drafted to qualify for consideration 
by the States as an amendment to the Constitution. But none of 
us can subscribe to simply enshrining a ``new promise'' by 
government that could only be honored by vitiating existing 
promises in areas of social security and veterans benefits--or 
by creative financing which would shift the real economic 
burdens for cutting the federal deficit onto the backs of the 
States, counties, cities, towns, and school districts; only 
then to be shifted to the American taxpayer. While we reject 
the Republican demand to impose a three-fifths supermajority on 
Congress to pass new tax increases, we find it the height of 
disingenuousness for them to make such a demand with the secret 
knowledge that, if accepted, the hapless States would have no 
recourse but to raise revenues because of unfunded federal 
mandates--which the same Republicans refused to prohibit in the 
text of H.J. Res. 1. In its financial evasion and duplicity, 
H.J. Res. 1 is the legislative equivalent of a constitutional 
``junk bond''--so enticing to speculators and quick-fixers, but 
ultimately lacking the full faith and credit of the United 
States.
    In the end, the fatal flaw of the proposed constitutional 
amendment is its failure to respect the American people by 
avoiding the real work and hard decisions necessarily entailed 
in truth-in-budgeting. Offered in the place of laying out 
precisely the path and procedure for eliminating the federal 
deficit is the gleaming promise to make the hard budget 
decisions somehow, somewhere and at some later time--but, in 
any event, not here, and not now, and surely not in relevant 
detail.
    As members of the Judiciary Committee, we have a particular 
duty to look critically and specifically at all possible 
consequences, both intended and unintended, of a proposed 
amendment to the United States Constitution. The potential 
consequences of this amendment include substantial budget cuts, 
and significant changes in the budgetary process itself, the 
role and powers of the Congress, the President, and the courts 
in that process, and the division of financial burdens, 
responsibilities, and control among federal, State and local 
governments.
    Given the magnitude of these consequences, it is imperative 
that our consideration of a balanced budget amendment include 
the clearest possible answers to these questions. It is 
particularly disheartening that Committee Members were denied 
the full opportunity to offer amendments and debate the merits 
of H.J. Res. 1 (as described in the attached letter from all of 
the Committee Democrats to Chairman Hyde).
    This effort is not serious, and by its snake-oil promises, 
does not augur well for the needed accountability we all must 
share if we are to safeguard and ensure the American way of 
life into the 21st century.

  I. The Republicans Refuse to Disclose How They Plan to Balance the 
                                 Budget

    H.J. Res. 1 represents for the Republicans, the ``heart'' 
of their purported ``Contract with America.'' In making their 
pledge to the American people, the Contract states solemnly:

          [I]n an era of official evasion and posturing, we 
        offer instead a detailed agenda for national renewal * 
        * *.

    Thus, the Contract with America promises a detailed agenda 
instead of official evasion and posturing. But in rushing the 
budget amendment through the Judiciary Committee in a period of 
scrutiny spanning a mere five days, the legislation stands as a 
product of the very evasion and posturing that is the target of 
the new agenda. Omitted in the proposed amendment is just how 
the legislation will work, and the ``detailed'' discussion of 
precisely what cuts will be necessitated.
    Let us be clear: cutting the deficit is important work, and 
Congress and the Administration took significant and painful 
action over the last two years to bring about $500 billion in 
deficit reduction. It needs to continue unabated. We are 
convinced that the American people want action, not talk; and 
they want Congress to deal with them openly and honestly. The 
message sent by the Republican Members of the Judiciary 
Committee is that the American people must trust them on the 
details, because they are intent on passing a balanced budget 
amendment without disclosing any of the details that allow the 
American people to evaluate whether the Constitution should be 
amended in this way.
    Truth in budgeting means communicating to the American 
people exactly what programs would be cut--and by what order of 
magnitude--to achieve a balanced budget. Given what is at stake 
in the policy choices affecting our domestic economy and our 
military preparedness, it is inconceivable that we would 
consider and vote on a Constitutional amendment without even 
discussing the foreseeable outcomes of that amendment in terms 
of the budget cuts that will ensue. But that is exactly what 
this Committee has done in stifling debate and foreclosing the 
offering of amendments. Just before we began consideration of 
this amendment there were intimations of such a foreclosed 
process: In the past week, the Republican Majority Leader, Dick 
Armey (R-TX) unabashedly stated: ``I am profoundly convinced 
that putting out the details would make passage of an amendment 
virtually impossible. The details will not come out before 
passage.'' He further asserted that ``knees would buckle'' if 
the specifics were known. We were under the belief that 
``openness'' in government--and certainly not ``paternalism''--
was to be the hallmark of the ``new beginning.'' We 
respectfully submit that in an ``open'' democracy, the people 
are entitled to know the likely consequences of an action 
before it is enacted into law--no more so than when we are 
talking about amending our Constitution.
    It is also worth noting that the support of the American 
people for a balanced budget amendment varies widely depending 
on what specific cuts would be made to balance the budget. The 
Republican majority frequently cites national surveys finding 
that some 80% of Americans support a Constitutional amendment, 
but not the more detailed findings of polls that show that 
support for the amendment drops to some 37% if it means cuts in 
federal spending on education, and to some 34% if it means cuts 
in Social Security. So the details do matter. Members of this 
Committee were entitled to know those details before being 
required to vote on the amendment; Members of the House of 
Representatives are entitled to know those details before this 
matter is brought to the Floor; Members of State legislatures 
are entitled to know those details before the amendment is sent 
to the States for ratification. Most important, the American 
people are entitled to know those details, and they are 
entitled to know them now as the process begins.
    To address the obfuscation of the details of the budget 
process contemplated, Ranking Member Conyers offered a ``truth 
in budgeting'' amendment during committee markup of H.J. Res. 
1, mandating that before a balanced budget amendment can be 
sent to the States for debate on ratification, the Congress 
would be required to adopt a plan showing precisely how it 
would propose to achieve a balanced budget. This amendment 
failed by a 15-19 vote, with every Republican Member voting 
against it. The message is unmistakable: the Majority appears 
intent on fulfilling a rhetorical pledge at the price of 
denying any information about what in the budget will be cut.
  II. The Balanced Budget Amendment Will Place Social Security at Risk

    The Social Security system is the most successful social 
insurance program in the Nation's history. Forty-two million 
Americans currently receive Social Security benefits \1\ and 
another 134 million citizens are working and building credits 
for future benefits.\2\ In addition to providing a cushion from 
poverty for the Nation's elderly and disabled, Social Security 
represents the Nation's most important life insurance program 
(worth $12.1 trillion in 1993, $1.3 trillion more than all 
private life insurance combined \3\). From 1937 to 1993, Social 
Security collected $4.3 trillion and paid out $3.9 trillion in 
benefits, leaving approximately $400 billion in trust fund 
assets.\4\ And according to present calculations, these 
surpluses are expected to grow to $3 trillion by the year 
2020.\5\
    \1\ See H.J. Res. 1: Hearings before the House Judiciary 
Subcommittee on the Constitution, 104th Cong., 1st Sess. (1995) 
(Statement of Robert M. Ball at 15) [hereinafter, 1995 House Judiciary 
Committee Hearings].
    \2\ Id.
    \3\ Id.
    \4\ Id.
    \5\ 1994 Annual Report of the Board of Trustees of the Federal Old 
Age and Survivors Insurance and Disability Insurance Trust Funds (April 
11, 1994).
---------------------------------------------------------------------------
    Because of the public's concerns that the Social Security 
surplus not be used to pay for other government programs, there 
has been a long-standing consensus that it should be taken 
``off-budget.'' The concept of a Social Security ``trust fund'' 
thus insures that the surplus will be available in the next 
century when needed to pay retirement benefits to the ``baby 
boomers'' generation and beyond. This is not a historical 
vestige from the 1930's and 1940's; it was reaffirmed in a 
unanimous 1994 vote implementing the Budget Enforcement Act of 
1990 determination to exclude Social Security receipts and 
outlays from traditional budget calculations.\6\
    \6\ The text of the provision is as follows: Notwithstanding any 
other provision of law, the receipts and disbursements of the Federal 
Old Age and Survivors Insurance Trust Fund and the Federal Disability 
Insurance Fund shall not be counted as new budget authority, outlays, 
receipts or deficit or surpluses for purposes of, one, the Budget of 
the United States Government, as submitted by the President; two, the 
Congressional Budget; or three, the Balanced Budget and Emergency 
Deficit Control Act of 1985.
    In order to carry-over these previously agreed upon budget 
protections for Social Security into H.J. Res. 1, at the 
markup, Rep. Frank offered an amendment to remove Social 
Security receipts and outlays from balanced budget 
calculations.\7\ However, the amendment was defeated in a 16-19 
near absolute party line vote, with all of the Republicans but 
Mr. McCollum voting to include Social Security surpluses in 
balanced budget calculations.
    \7\ Mr. Frank's amendment would have added the following language 
to section 5: Total receipts shall not include receipts (including 
attributable interest) of the Federal Old-Age and Survivors Insurance 
Trust Fund and the Federal Disability Insurance Trust Fund, or any 
successor funds, and total outlays shall not include outlays for 
disbursements of the Federal Old-Age and Survivors Insurance Trust Fund 
and the Federal Disability Insurance Trust Fund, or any successor 
funds.
---------------------------------------------------------------------------
    In the debate, Chairman Hyde indicated his strong 
opposition to the Frank amendment, and acknowledged that the 
Republican Congress would not be able to balance the budget 
without using retiree funds in the Social Security trust fund:

          If you exclude receipts, the revenues that are 
        received by the Social Security System from computing 
        the total revenues of the government, if you will take 
        that out of the equation, then the cuts that are 
        necessary to reach a balanced budget become draconian. 
        They become 22 to 30 percent. And you know that we 
        cannot and will not cut programs that we want to 
        subsist and continue by 22 to 30 percent * * * [Y]ou 
        have to compute Social Security receipts in determining 
        the income of this government so that the cuts you make 
        to balance the budget are livable and not 
        impossible.\8\
    \8\Markup of H.J. Res. 1, House Judiciary Comm. (tr. at 66-67).

    In effect, Mr. Hyde admitted the Republicans had no plans 
to balance the budget under the bipartisan budget rules 
accepted--that is without using the Social Security surplus. 
This is indeed a shocking admission coming from the Chairman of 
the Committee whose job is to rush along the ``Contract'' by 
foreclosing adequate deliberations or improvements to the base 
text. The devastating corollary to Mr. Hyde's unvarnished 
acknowledgement is that Social Security benefits will indeed be 
on the ``chopping block''.

  III. The Balanced Budget Amendment May Jeopardize Other Fundamental 
          Elements of the Nation's Obligation to Its Citizens

    Democrats on the Committee offered a narrow set of 
additional amendments in an effort to safeguard from the 
politics of the budget process certain additional commitments 
made to the American people. Each of these amendments was 
summarily rejected by the Republican majority on the Committee.
    Mr. Scott and Mr. Reed offered amendments to honor military 
\9\ and veteran's benefits\10\ and not cast them up as a target 
for balanced budget politics. The amendments were designed to 
protect the benefits of men and women either in or retired from 
our Armed Forces, including benefits paid to veterans for 
disabilities incurred or benefits paid to survivors for their 
death. The amendments, predicated on a belief that there are 
certain commitments that our Nation has made that cannot and 
should not be renounced, were designed to protect any benefit 
earned and promised to people who risked or gave their lines 
for our Constitution and our very security.
    \9\ Mr. Scott's amendment would have added the following language 
to section 8: However, no legislation to enforce or implement this 
Article may impair any payment or other benefit earned through service 
in the Armed Forces if such payment or other benefit was earned under a 
program established before the ratification of this Article.
    \10\ Mr. Reed's amendment would have added the following language 
to section 8: However, no legislation to enforce or implement this 
Article may impair any payment or other benefit based upon a death or 
disability incurred in, or aggravated by, service in the Armed Forces 
if such payment or other benefit was earned under a program established 
before the ratification of this Article.
    Next, Ms. Jackson Lee \11\ sought to safeguard the Nation's 
military preparedness from the impending budget cuts. Without 
such a clear statement, the Department of Defense projects that 
budget cuts for it could range up to $520 billion by fiscal 
year 2002.\12\ Such cuts, the Department noted ``would 
fundamentally change the character of America's military 
posture, make our new strategy insupportable, call into 
question our ability to fulfill U.S. commitments to our allies 
and to protect our interests worldwide, and undermine America's 
global leadership.''\13\ Summary dismissal of personnel (it 
takes 16 years of schooling and proper assignments to prepare a 
battalion commander to lead troops into combat), cancellation 
of equipment purchases (the average major weapons procurement 
program requires 8 years of development and testing) the 
inability to buy repair parts (which require 3 years lead 
time), and research and development cuts are possibilities that 
the Nation's defense cannot afford to risk. These are precisely 
the same areas about which our Republican colleagues have 
railed in recent months as being subject to too much 
retrenchment in the post-Cold War period. Obviously, their 
defense position on the merits was vacated in the rush to push 
word-for-word the language of the proposal dictated by the 
Contract's sloganeering. The defeat of the Jackson Lee 
amendment means that these possibilities may well come to pass.
    \11\ Ms. Jackson Lee's amendment would have added the following 
language to section 4: Congress may waive the provisions of this 
Article for any fiscal year in which the President, in consultation 
with the Joint Chiefs of Staff, determines that military readiness 
requirements of the Department of Defense are not being fully funded.
    \12\ See 1995 House Judiciary Hearings, supra note 1 (statement of 
Undersecretary of Defense John J. Hamre).
    \13\ Id.
---------------------------------------------------------------------------

 IV. The Balanced Budget Amendment Places State and Local Taxpayers at 
                                  Risk

    As currently drafted, H.J. Res. 1 places an inordinate risk 
that State and local governments will be forced to bear the 
brunt of the costs of balancing the Nation's budget through a 
variety of unfunded mandates. These mandates could take the 
form of increasing the States' share of programs such as 
Medicaid and Aid to Families to Dependent Children. The private 
sector could also face significant increases in regulations and 
mandates imposed on it as part of a budget balancing 
imperative.
    It is because of these concerns that the National League of 
Cities testified in opposition to H.J. Res. 1. Rutland, Vermont 
Mayor Jeffrey N. Wennberg warned that ``any 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.'' He 
noted that the ``pressure to order state and local spending 
will grow geometrically under a balanced budget amendment 
unless an equally powerful restriction on [unfunded] mandates 
is enacted.''\14\ Mayor Wennberg's concerns were echoed by Rep. 
Karen McCarthy, past President of the National Conference of 
State Legislatures\15\ and Vermont Governor Howard Dean, 
Chairman of the National Governor's Association.\16\
    \14\ 1995 House Judiciary Hearings, supra note 1 (statement of the 
Honorable Jeffrey N. Wennberg).
    \15\ Id. (statement of Representative Karen McCarthy).
    \16\ See Richard Willing ``Amendment Would Cost Michigan,'' The 
Detroit News, Jan. 13, 1995, at 5A.
    The projected impact of the balanced budget amendment on 
the States in indeed staggering. A recent Treasury Department 
study concludes that in order to balance the budget by the year 
2002, ``federal grants to states would be cut by a total of 
$97.8 billion in fiscal 2002.'' Other federal spending that 
directly benefits state residents would be cut by $242.2 
billion in fiscal year 2002.\17\ The projected State tax 
increases needed to offset these cuts would be significant--as 
high as 21.4% in Rhode Island and 27.8% in Louisiana.\18\
    \17\ 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).
    \18\ Id. (Table 1).
---------------------------------------------------------------------------
    The only way to protect the State and local governments 
from the threat of increased unfunded mandates would have been 
to include a Constitutional prohibition in the text of H.J. 
Res. 1. Rep. Frank sought to do precisely this at the Committee 
markup; but his first proposal was ruled non-germane by 
Chairman Hyde, and his second proposal was defeated by a 15 to 
20 party-line vote.\19\
    \19\ While some have sought to alleviate the concerns of the States 
by adopting a statute relating to unfunded mandates, this would 
ultimately not offer the protection the States need since any 
legislation would not be binding on a future Congress.
---------------------------------------------------------------------------

     V. The Manner in Which the Balanced Budget Amendment Is To Be 
                  Implemented Is Disturbingly Unclear

    Another significant problem posed by H.J. Res. 1 concerns 
the uncertainty that will inevitably be spawned concerning its 
implementation and enforcement. This concern was raised but was 
dismissed by the Republican majority as a minor point, not 
worthy of consideration. A wide range of noted Constitutional 
scholars agree that problems in the balanced budget amendment's 
implementation could lead to its undoing. In testimony 
concerning balanced budget proposals last Congress, one of the 
Nation's preeminent constitutional scholars, Harvard Professor 
Laurence H. Tribe, warned:

          [A] balanced budget amendment, if adopted as part of 
        the Constitution, would pose severe and probably 
        intractable challenges of implementation and 
        enforcement that would be more likely to unbalance the 
        Constitution than to balance the budget.\20\
    \20\ Constitutional Amendment to Balance the Budget: Hearings 
Before the Senate Comm. on the Budget, 102nd Cong. 2d Sess. (1992) 
(statement of Laurence H. Tribe at 13) [hereinafter, 1992 Senate Budget 
Committee Hearings].

    Moreover, Solicitor General and conservative Constitutional 
---------------------------------------------------------------------------
scholar Robert Bork envisioned the following scenario:

          Scores or hundreds of suits might be filed in federal 
        district courts around the country. Many of these suits 
        would be founded on different theories of how the 
        amendment had been violated. The confusion, not to 
        mention the burden on the court system, would be 
        enormous. Nothing would be settled, moreover, until one 
        or more of such actions finally reached the Supreme 
        Court. That means we could expect a decision [about a 
        given fiscal year five years after it has passed]. Nor 
        is it at all clear what could be done if the Court 
        found that the amendment had been violated five years 
        earlier.\21\
    \21\ Letter from Robert H. Bork to Thomas F. Foley (July 10, 1990), 
reprinted in Robert H. Bork, ``A Seasoned Argument,'' Washington Post, 
June 10, 1992, at A23.
---------------------------------------------------------------------------

                         Use of Undefined Terms

    Section 1 of H.J. Res. 1 lays out the core operative 
requirements of the balanced budget amendment by requiring that 
the President and Congress agree to a budget by which 
``outlays'' do not exceed ``receipts.'' (Section 5 provides 
that the reference to outlays and receipts is intended to refer 
to outlays and receipts of the ``United States.'') 
Unfortunately, the meaning of these crucial terms is not 
clearly articulated in H.J. Res. 1.
    For example, a number of ambiguities exist with regard to 
the term ``outlays.'' Would it include amounts lent by the 
government under federal loan programs? \22\ And how would 
federally guaranteed loans be treated--Would the entire amount 
of the loan be considered an outlay? Or just the expected cost 
of the guarantee? Or would nothing be considered an outlay 
unless and until a default occurred? \23\ And how would long-
term leases and purchase contracts be treated? Would the entire 
amount due be treated as an outlay in the year the lease is 
signed? Or would outlays only be recorded as payments are 
actually made? \24\
    \22\ Prior to 1990, net lending was considered to be an outlay. 
Under current budget practice, only the estimated subsidy value of the 
federal loans is scored as an outlay. See Sec. 13201 of the Omnibus 
Budget Reconciliation Act of 1990 (Pub. L. 101-508).
    \23\ Until 1990, the practice was to not consider a loan guarantee 
as an outlay until a default occurred, but in 1990 the practice was 
changed to treat the expected cost of the guarantee to be an outlay. 
The meaning of this term would have a significant effect on the 
government's ability to respond to financial calamities through federal 
loan guarantees, such as the potential bankruptcy of Chrysler in the 
1970's and the recent financial crisis in Mexico. See Sec. 13201 of the 
Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508).
    \24\ Until 1990, outlays were only recorded as lease payments were 
made, since then the entire amount due has been treated as an outlay in 
the year the lease is signed. If the pre-1990 interpretation is 
accepted, even if leasing is not economically sound. See Budget 
Scorekeeping Rule No. 11 to the Statement of Managers to the Omnibus 
Budget Reconciliation Act of 1990 at 1174 (H. Rept. No. 101-964).
    Determining which outlays are outlays of the ``United 
States'' presents a number of additional problems in 
definition. For example, how would the expenditures of 
congressionally-created corporations--such as the Federal 
Deposit Insurance Corporation, the United States Uranium 
Enrichment Corporation, Fannie Mae and the Federal Agricultural 
Mortgage Corporation be treated? \25\ And what about outlays of 
the Postal Service and Federal Reserve? \26\ The fact that 
Congress has been able to develop rules for dealing with many 
of these questions for budgetary purposes would not necessarily 
govern the Constitutional treatment of these terms.\27\
    \25\ Under current practice only the outlays of the FDIC and the 
Uranium Enrichment Corporation are included in the federal budget. See 
Budget of the United States Government for Fiscal Year 1995 at App. pg. 
1029.
    \26\ Currently, Postal Service and Federal Reserve outlays are 
generally not included in the budget. See Budget of the United States 
Government for Fiscal Year 1995 at App. pg. 952 and 1043.
    \27\ See Balanced Budget Amendment--S.J. Res. 41: Hearings before 
the Senate Comm. on Appropriations, 103d Cong., 2d Sess. (1993) 
(statement of Yale Law Professor Burke Marshall) [hereinafter, 1993 
Senate Appropriations Committee Hearings].
---------------------------------------------------------------------------
    Even more problematic is section 2's requirement that no 
bill to increase ``tax revenues'' become law unless approved by 
a three-fifths majority. For example, it is unclear how a bill 
to require certain additional kinds of record-keeping designed 
to improve tax compliance would be treated. And what about a 
bill that is estimated to increase tax receipts in the first 
two years after its enactment, but reduce receipts in the next 
three years? Or a bill which increased taxes on upper-income 
taxpayers but reduced them for middle-class taxpayers? 
Similarly, how would bills to eliminate tax loopholes or extend 
taxes that are currently in effect be treated under H.J. Res. 
1? And would a bill which reduced capital gains rates but 
increased tax receipts be subject to the three-fifths vote 
requirement? By elevating the role of revenue estimates to a 
Constitutional level, H.J. Res. 1 could retroactively 
invalidate all sorts of tax legislation and create the 
potential for confusion and interbranch gridlock while these 
matters are resolved.
    A further serious problem is raised by the drafting of the 
section 4 waiver authority. Litigation arising under the War 
Powers Act has often been dismissed from the Federal courts 
because it presents a ``political question''. But the courts 
are not so likely to turn away when asked to interpret a 
constitutional amendment. Do we want the courts to determine 
whether a particular event poses an ``imminent and serious 
military threat to national security''? Indeed, past military 
actions undertaken by the U.S. might not meet the waiver 
standard.
                            judicial review

    Moreover, H.J. Res. 1, as currently drafted, is totally 
silent on the issue of judicial review. Although legal scholars 
agree that the absence of a clear statement would permit some 
form of judicial review,\28\ the lack of specificity as to the 
manner of the review denies crucial information to those 
legislators who may be called upon to vote on the resolution's 
adoption.\29\
    \28\ In recent hearings before the House Judiciary Subcommittee on 
the Constitution, William J. Barr, while strongly supporting H.J. Res. 
1 and generally minimizing the likelihood of pervasive judicial 
activity concerning the balanced budget amendment, acknowledged that 
the ``courts will [not] ignore clear instances of abuse.'' See 1995 
House Judiciary Hearings, supra note 1 (statement of William P. Barr at 
15).
    \29\ In addition, failure to specifically address the issue of 
judicial review is inconsistent with the legislative checklist included 
in the Republican's own ``Contract with America.'' See Contract with 
America, House Republican Conference Legislative Digest at 39 
(September 27, 1994).
---------------------------------------------------------------------------
    One potential uncertainty concerns the applicability of the 
``political question doctrine,'' which is designed to restrain 
the Judiciary from inappropriate interference in the business 
of other branches of the government.\30\ Although former 
Attorney General Barr has testified that the courts are 
``likely to accord the utmost deference to the choices made by 
Congress in carrying out its responsibilities under the 
amendment,'' \31\ the majority of scholars, relying in part on 
recent judicial cases in which the judiciary has elected to 
review issues implicating the other branches of government,\32\ 
have indicated the doctrine is unlikely to limit judicial 
intervention in the present case.
    \30\ See Baker v. Carr, 369 U.S. 186, 217 (1962).
    \31\ 1995 House Judiciary Hearings, supra note 1 (statement of 
William P. Barr at 13).
    \32\ Department of Commerce v. Montana, 112 S. Ct. 1415 (1992) 
(congressional apportionment); United States v. Munoz-Flores, 495 U.S. 
385, 394 (1990) (Constitutional requirement that tax bills originate in 
the House of Representatives).
    An additional area of confusion relates to judicial 
limitations concerning ``standing.'' Article III of the 
Constitution limits the jurisdiction of Federal courts to 
``cases'' of ``controversies,'' which has evolved into a 
requirement that plaintiffs show sufficient injury in the form 
of ``standing'' before being able to seek judicial relief.\33\ 
While it is unclear whether a taxpayer would be able to show 
sufficient injury to have standing to bring suit in federal 
court challenging any Congressional failure to comply with the 
balanced budget amendment,\34\ standing is likely to be more 
compelling if sought by a Member of Congress,\35\ an entire 
House of Congress,\36\ or an entitlement recipient who has been 
denied benefits as a result of a questionable impoundment or 
sequestration of funds.\37\ And there appears to be a general 
consensus among the commentators that State courts, which are 
generally available to hear constitutional challenges, are not 
subject to any federal standing requirements.\38\ Although, as 
noted above, there is some disagreement over the range of cases 
the courts will entertain in reviewing the balanced budget 
amendment, there is widespread agreement that they will play 
some role.\39\ Unfortunately, the remedies available to a court 
which chooses to intervene are also not spelled out with any 
particularity. A range of possible remedies are theoretically 
available to the courts, ranging from tax increases and 
spending cuts to declaratory judgments as to the meaning of the 
Amendment's terms. The most frightening scenario to many 
taxpayers is court-ordered tax increases.\40\ And the specter 
of court-ordered budget cuts or automatic sequestrations of 
funds in the middle of a fiscal year is no less likely, or 
disturbing.
    \33\ See, e.g. Lujan v. Defenders of Wildlife, 1125 S.Ct. 2130 
(1992).
    \34\ In Flast v. Cohen, 392 U.S. 83 (1968), the Supreme Court 
opened the door to a potentially vast array of court challenges to 
federal budgeting decisions when it permitted a taxpayer to challenge 
federal aid to parochial schools as being in violation of the First 
Amendment Establishment Clause. However, some have asserted that Flast 
should be limited to cases challenging congressional action taken under 
its taxing-and-spending power, rather than its borrowing power. See 
1995 House Judiciary Hearings, supra note -- (statement of William P. 
Barr at 9); but see also 1992 Senate Budget Committee Hearings, supra 
note 20 (statement of Laurence H. Tribe at 31, n. 5) (``Although the 
Court has limited Flast to instances where Congress exercises its 
taxing and spending authority * * * that limitation would not preclude 
taxpayer standing in cases involving the balanced budget amendment--
which assuredly does relate to congressional taxing spending 
authority.'')
    \35\ See, e.g., Coleman v, Miller, 307 U.S. 433, 438 (1939) (Kansas 
state senators had standing to protest lack of effect of votes for 
ratification of Child Labor Amendment, which ratification has been 
rescinded by subsequent act of the legislature); Kennedy v. Sampson, 
511 F.2d 430 (D.C. Cir. 1974) (legislators have standing to challenge 
constitutionality of pocket veto). But see Harrington v. Bush, 553 F.2d 
190 (D.C. Cir. 1977).
    \36\ See Burke v. Barnes,  479 U.S. 361, 364 n.* (1987) (``a House 
of Congress suffers a judicially cognizable injury when the votes it 
has cast to pass an otherwise live statute have been nullified by 
action on the part of the Executive Branch'').
    \37\ See 1994 Senate Appropriations Committee Hearings, supra note 
27 at 82 (testimony of Charles Fried) (under the amendment, ``a 
beneficiary of impounded funds surely could * * * enlist the aid of the 
courts''); Balanced Budget Amendment: S.J. Res. 1: Hearings before the 
Senate Comm. on the Judiciary, 104th Cong., 1st Sess. (1995) (statement 
of University of Chicago Law Professor David Strauss at 6).
    \38\ See Asarco, Inc. v. Kadish, 490 U.S. 605, 617 (1989). See 
also, 1995 House Judiciary Hearings, supra note 1 (statement of William 
P. Barr at --).
    \39\ See earlier discussion.
    \40\ Support for such judicial authority exists by virtue of 
Missouri v. Jenkins, 495 U.S. 33 (1990), in which the Supreme Court 
held that a federal district court could mandate a State tax increase 
in order to fund a school desegregation program. While some 
commentators believe the case should be limited to its facts (see 1995 
House Judiciary Hearings, supra note 1, statement of William P. Barr at 
17-19), former Reagan Administration Solicitor General Charles Fried 
has expressed concern that with the passage of a balanced budget 
amendment, under Jenkins, court intervention could ``extend to ordering 
or imposing taxes.'' See 1994 Senate Appropriations Committee Hearings, 
supra note 20 at 86 (statement of Charles Fried).
    H.J. Res. 1 would also seem to raise the possibility that 
the President could choose to respond to the likelihood of an 
unbalanced budget by unilaterally impounding funds. Section 1 
seems to give the President authority to make sure the budget 
stays in balance, and the Department of Justice has testified 
that this may well permit the President to unilaterally cut 
programs.\41\ However, the terms of the Amendment are again 
deficient in that they fail to describe how the President is to 
achieve this balance. Proponents of H.J. Res. 1 have asserted 
that its deficiencies can be cured through so-called 
``implementing legislation.'' \42\ However, given the lack of 
consensus concerning budgeting matters during the last several 
years, there is no guarantee that Congress would be able to 
muster the necessary majorities in both houses to obtain the 
President's signature for any such legislation. Even if 
legislation is adopted, it would not necessarily conform to 
Constitutional constraints.\43\
    \41\ See 1995 House Judiciary Committee Hearings, supra note 1 
(statement of Assistant Attorney General Walter Dellinger at 5) 
(Constitutional impoundment authority ``must take precedence over mere 
statutes, including appropriations bills, entitlement packages, and the 
Congressional Budget and Impoundment Control Act of 1974''); 1994 
Senate Appropriations Hearings, supra note 27 at 82 (statement of 
Charles Fried).
    \42\ See, e.g., 1995 House Judiciary Committee Hearings, supra note 
1 (statement of William P. Barr).
    \43\ For example, it is doubtful the courts or the President would 
countenance Congress unconstitutionally limiting their enforcement 
roles as permitted by H.J. Res 1. Similarly, an implementing statute 
would not be able to cure inherent Constitutional deficiencies in the 
Amendment's scope and meaning.
                               Conclusion

    For all these reasons, every Member of the Democratic 
minority rejects the substance and process surrounding this 
first item of the ``Contract with America'': The unfortunate 
truth is that a real measure of bipartisan support might have 
been garnered had the new Majority decided to ``try out'' a 
collaborative model of legislating--which they themselves have 
held up for years as being sorely lacking when the Democrats 
held sway.
    The Republicans were right about one thing: the American 
people want their fiscal house put in order. But they demand to 
read the mortgage and repayments documents very carefully 
before signing on the bottom line. After all, that is what a 
contract is all about. The disingenuous Republican response of 
``trust me'' does not even pass the threshold test of minimally 
informing and involving the citizenry in the important work of 
its elected representatives.
    We will not be party to ``trust me'' politics; we will not 
blithely assume that there is ``glide path'' to a zero deficit 
by throwing the automatic pilot switch; we will not succumb to 
trading our responsibility to make hard, practical choices for 
the ease of soaring, pleasing rhetoric. As we had to state in 
the introduction to these views, H.J. Res. 1 is not a serious 
effort to address a very serious problem.
                                   John Conyers, Jr.
                                   Pat Schroeder.
                                   Melvin L. Watt.
                                   Zoe Lofgren.
                                   John Bryant.
                                   Rick Boucher.
                                   Jerrold Nadler.
                                   Sheila Jackson Lee.
                                   Howard L. Berman.
                                   Jose E. Serrano.
                                   Charles E. Schumer.
                                   Barney Frank.
                                   Jack Reed.
                                   Bobby Scott.
                                   Xavier Becerra.

                          House of Representatives,
                                Committee on the Judiciary,
                                  Washington, DC, January 12, 1995.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary, 2138 Rayburn House Office 
        Building, Washington, DC.
    Dear Mr. Chairman: We are profoundly distressed--and 
frankly, astonished--at the manner in which the Committee's 
most important business has been conducted in the first week of 
the new Congress. It is not an auspicious beginning for 
bipartisan cooperation and mutual respect or a herald for the 
``new beginning'' so highly touted by the Republican Leadership 
in the past few months. From insufficient notice of public 
hearings to the extraordinary break with Committee precedent in 
prematurely cutting off full and fair debate over a 
Constitutional amendment, we are compelled to write to ask that 
you immediately reevaluate the direction the Committee appears 
to be heading, and specifically, to reconvene the markup on the 
balanced budget Constitutional amendment that was unilaterally 
terminated in midstream yesterday evening at 6:00 p.m.
    While we are cognizant that you yourself are under heavy 
pressure by the House Republican Leadership to rush to judgment 
a series of items under the so-called ``Contract with 
America'', there can be no excuse for not affording the ``new'' 
Minority the same basic incidents of fairness and notice always 
accorded to the ``old'' Republican Minority during prior 
leadership of the Committee. While it is apparent to us that 
Committee Republicans have been working round-the-clock on 
their legislative agenda prior to the start of the new 
Congress, the Democrats have been willing to adapt as much as 
possible to the time imperatives unilaterally decreed upon them 
provided that they have sufficient notice, due process 
safeguards, and sufficient resources to discharge their most 
serious responsibilities as lawmakers.
    From start to finish, the proposal to amend our 
Constitution in requiring a balanced budget has spanned three 
days. We do not accept the thesis that because prior hearings 
were held in a number of Congresses, no real deliberative 
effort was needed in this instance to consider such fundamental 
change to our Nation's most sacred charter. Quite the contrary, 
there are now 11 new Members, both Republican and Democrat, who 
have never participated in these deliberations; and even for 
those who have considered similar proposals, new issues have 
been raised by the States and other groups that needed 
exploration before a thoughtful vote can be cast.
    As you are aware, Committee Democrats did not learn of your 
desire to conduct a hearing on the proposed Constitutional 
amendment until Thursday, January 5, 1995. The hearing was set 
for Monday, January 9, and the witnesses were preselected with 
no consultation from our side. Such a procedure led us to 
assert our rights under Rule XI of the House Rules that the 
Minority be accorded an additional day of hearings so as to 
present witnesses that it desired to hear from. You did accord 
that right to a hearing, but scheduled it for the very next 
day, Tuesday, January 10, and then proceeded to schedule markup 
for the following day, Wednesday, January 11. Even so, we were 
able to put together a hearing on Tuesday that helped round out 
a hearing record that was sorely lacking in addressing a number 
of issues of both constitutional and economic concern 
surrounding the language found in H.J. Res. 1.
    Building upon the hearing record that we helped develop, 
the Minority worked together to ensure that amendments were 
crafted to address those issues identified by experts as 
problematic with the proposal under consideration. Yesterday, 
the markup began at 9:30 a.m. at which point a full hour 
discussion was devoted to amendments of your choice. The 
Committee then moved on to other amendments for a period of one 
hour and 45 minutes until the lunch break you declared at 12:15 
p.m. When the Committee resumed at 1:30 p.m., more amendments 
were offered but were suspended for approximately 25 minutes to 
accommodate Republican Members who needed to attend other 
organizational meetings. At approximately 5:00 p.m., we 
received word that there was under consideration by you the 
notion that the Full Committee markup would simply terminate in 
the next hour for the purported reason that some Members needed 
to catch planes back to their districts. Such a reason would be 
understandable, but would not preclude reconvening the Full 
Committee in the near future to complete this most important 
piece of legislative business. However, that scenario was not 
to be. At 6:00 p.m., your Members with their Majority-control 
over the Committee, voted to move the previous question--
thereby cutting off debate and votes on over 20 other 
amendments that were prepared and ready to be offered by the 
Democrats in good faith.
    Your actions are especially incomprehensible in light of 
the fact that the House Republican Leadership announced earlier 
this week that they had moved back the date for Floor 
consideration of H.J. Res. 1 from January 19 to at least 
January 24. Reconvening the Full Committee today (January 12) 
or even tomorrow (January 13) would in no way have procedurally 
upset the timeframe for full consideration by the House based 
on the new schedule announced.
    There are few things more weighty in this Committee's 
subject matter jurisdiction than a proposed amendment to the 
Constitution. Beside the amendments that were offered by our 
side, other significant amendments remain that need to be 
addressed: how the imperatives of the balanced budget proposal 
would be handled in times of recession; how government 
insurance and guarantee programs would be treated; how a 
variety of standing issues (for both State and local 
governments as well as affected private parties) would be 
treated, particularly given the silence of the proposal at 
hand; how surpluses in the budget from one year to the next 
would be treated for purposes of balancing requirements; how 
questions on the Presidential power to impound would be 
reconciled with the thrust of the proposal at hand; how 
programs involving childhood healthcare, education, and 
research and development would be treated; whether Medicare 
would be put at risk by the dictates of the proposal at hand; 
whether the three-fifths waiver rules appearing in the proposal 
would be retained in each place they appear, or whether other 
super-majority requirements would be added regarding such items 
as capital gains taxes, and middle-income tax increases, to 
name a few; whether the proposal completely ignored the effect 
on the capital markets in not protecting the investment of 
investors in U.S. Treasury securities; whether student loan 
programs and obligations would be jeopardized; and vexing 
definitional problems with the way ``outlays'' are defined and 
treated.
    All of these amendments should have been considered at 
yesterday's markup, but were not. The result is that the Full 
House will not have the benefit of the Committee's substantive 
expertise on these questions before each Member casts his or 
her vote in the weeks ahead. The remedy is very simple indeed: 
simply reconvene the Full Committee to finish its unfinished 
business. We stand ready to work cooperatively with you in this 
regard and await notice of the next date when the Committee can 
resume its full and fair deliberations on this important 
legislative proposal.
    The fractured and frayed beginnings of this Committee's 
work in this Congress can be repaired quite quickly with the 
simple ingredient that, unfortunately, already appears to be in 
short supply: good faith. We ask your help in adding that 
ingredient back into the mix of our work together.
            Sincerely,
                    John Conyers, Jr., Pat Schroeder, Barney Frank, 
                            Jerrold Nadler, Howard L. Berman, John 
                            Bryant, Melvin L. Watt, Bobby Scott, Rick 
                            Boucher, Charles E. Schumer, Jose E. 
                            Serrano, Xavier Becerra, Jack Reed, Zoe 
                            Lofgren, Sheila Jackson-Lee.
                            ADDITIONAL VIEWS

    We find the need to write these additional views because of 
our most serious concern with H.J. Res. 1: its fundamental 
differences with existing constitutional provisions. The 
Constitution written by our founding fathers and the amendments 
adopted to it to date serve two basic functions: (i) allocating 
power within our democratic nation (among the three branches of 
the federal government, between the two houses of Congress and 
between the federal government and the States) and (ii) 
protecting fundamental individual rights, such as life, 
liberty, property, free speech, fair trials, and equal justice 
under the law.\44\ H.J. Res. 1, by contrast, seeks to enshrine 
a particular view of budgeting and economics into the 
Constitution, buttressed by a series of parliamentary 
requirements.
    \44\ See 1994 Senate Appropriations Committee Hearings, supra note 
27 at 154 (statement of Professor Archibald Cox).
---------------------------------------------------------------------------
    H.J. Res. 1 differs from other Constitutional amendments in 
that it confers on Congress power it already has--namely the 
ability to balance the budget. H.J. Res. 1 would also create 
the only Constitutional principle that is subject to waiver 
procedures. As such, the Amendment differs dramatically in 
character and nature from the other provisions of the 
Constitution and its adoption could ultimately serve to weaken 
respect for the entire document. In enshrining an economic 
theory into the Constitution,\45\ H.J. Res. 1 also threatens to 
upset the basic balance of power between the branches of the 
federal government. The resolution reallocates one of Congress' 
core functions--federal budgetary priorities--to the Judicial 
Branch.\46\ Since federal judges have been Constitutionally 
endowed with lifetime tenure, this could result in a situation 
by which the most ill-suited and politically least accountable 
of our branches of government is forced to adjudicate highly 
technical budgetary matters.
    \45\ It is instructive to note that Oliver Wendell Holmes warned 
against such a provision being included in the Constitution when he 
wrote, the Constitution ought not ``embody a particular economic 
theory.'' See 1994 Senate Appropriations Committee Hearings, supra note 
27 at 184 (statement of Kathleen M. Sullivan).
    \46\ The founding fathers explicitly rejected the notion that 
discretionary budget authority should be granted to either the 
Judiciary or the Executive Branch. See 1995 Hearings before the House 
Judiciary Committee, supra note 1 (statement of Walter Dellinger, notes 
28-30) (citing remarks of James Madison and Alexander Hamilton in the 
Federalist Papers to the effect that the power of the pursue should be 
placed in the hands of Congress, rather than the Executive Branch or 
the Judiciary).
    Moreover, by locking in a series of three-fifths super-
majority requirements with regard to waivers of budgetary 
matters,\47\ H.J. Res. 1 also deviates from the bedrock 
constitutional principle of majority rule.\48\ As James Madison 
---------------------------------------------------------------------------
wrote in Federalist 58:

    \47\ See Sec. Sec. 1, 2, and 6 of H.J. Res. 1.
    \48\ Although the Constitution requires two-thirds super-majorities 
for a number of decisions (conviction of officers tried on impeachment, 
expelling a Member of Congress, overriding a Presidential veto, 
approving treaties, and proposing Constitutional amendments), these all 
apply to situations where it is necessary to place checks on potential 
exercises of power or protect individual rights. There is no precedent 
for requiring a super-majority to allow a budget to be approved and the 
government to continue its operations.

          [If] more than a majority [were required for 
        legislative decisions, 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 principle of free government would be 
        reversed. It would no longer be a majority that would 
        rule: the power would be transferred to the 
        minority.\49\
    \49\ The Federalist No. 58, at 361 (James Madison) (Clinton 
Rossiter ed., 1961).

    The three-fifths super-majority requirement would serve to 
decrease the overall accountability of Congress and result in a 
proportionate increase in the power of special interests. And 
in an effort to garner the three-fifths support to obtain a 
budget waiver, Congress may be more inclined to resort to pork-
barrel spending and political log-rolling, with the result 
being larger, not smaller deficits.
    Most importantly, to the extent H.J. Res. 1 is not 
vigilantly enforced, it would diminish the Nation's respect for 
the Constitution as a whole. As Alexander Hamilton noted in the 
Federalist Papers:

          Wise politicians will be cautious about fettering the 
        government with restrictions that cannot be observed, 
        because they know that every breach of the fundamental 
        laws, though dictated by necessity, impairs that sacred 
        reverence which ought to be maintained in the breast of 
        rulers toward the constitution of a country, and forms 
        a precedent for other breaches where the same pleas of 
        necessity does not exist at all, or is less urgent and 
        palpable.\50\
    \50\ The Federalist No. 25, at 167 (Alexander Hamilton) (Clinton 
Rossiter ed., 1961).
    And if the Amendment results in a reduction in our 
deficits, but does not achieve the Constitutionally-mandated 
balance, Assistant Attorney General Walter Dellinger predicts a 
---------------------------------------------------------------------------
loss of respect for other Constitutional provisions:

          For how long would we as a people continue to make 
        difficult decisions to comply with the First Amendment 
        or with the Due Process or Takings Clause of the Fifth 
        Amendment if we had routinely failed, for lack of an 
        enforcement mechanism, to come within a billion dollars 
        of complying with the most recent amendment to our 
        Constitution? \51\
    \51\ 1995 House Judiciary Hearings, supra note 1 (statement of 
Walter Dellinger at 12-13).

    Unfortunately, it is no answer to respond that the 
Amendment will be fully self-enforced by Congress, out of 
fidelity to the Con-P
stitution or concern that the voters will throw them out if a 
balanced budget is not forthcoming. This is because each 
individual Congressman may support a balanced budget, but have 
a different vision of how to achieve it than his fellow 
Congressmen. In the end, no individual Congressman would bear 
institutional responsibility for a balanced budget.
                                   John Conyers, Jr.
                                   Pat Schroeder.
                                   Melvin L. Watt.
                                   Howard L. Berman.
                                   Jerrold Nadler.
                                   Barney Frank.
                                   Jose E. Serrano.
                                   Jack Reed.
                                   Bobby Scott.
                                   Xavier Becerra.
             ADDITIONAL VIEWS OF REPRESENTATIVE JOHN BRYANT

    I am profoundly concerned about the truncated process used 
by the Majority Members of this Committee to speed this 
proposed Amendment to the Constitution of the United States of 
America to the Floor of the House of Representatives. The 
procedure adopted by the Majority is nothing more than a gag 
rule, which has prevented the Committee--and the American 
public--from gaining a full understanding of the weaknesses of 
the proposed amendment and its potential for harm to this great 
Nation.
    As set out in greater detail in a letter to Chairman Henry 
J. Hyde, which is attached and made a part of the dissenting 
views, the entire hearing and mark-up process for the proposed 
amendment took only three days, with the Democratic Members of 
the Committee given only two days notice of the initial 
hearing.
    The Committee's mark-up of the proposed amendment was 
brought to an abrupt close when the Majority voted unanimously 
to shut off debate, preventing the Committee from considering a 
host of perfecting amendments that Democratic Members of the 
Committee were prepared and waiting to offer. No general debate 
was permitted. Members of the Committee can recall no other 
occasion when debate was stifled in this manner.
    The amendment process was stopped just as Rep. Conyers was 
about to offer an amendment that would have provided the 
Congress with flexibility to deal with the effects of a 
recession. Specifically, Rep. Conyers' amendment would have 
given Congress the authority to waive the requirement for a 
balanced budget ``[i]f real economic growth has been or will be 
negative for two consecutive quarters,'' the widely-accepted 
definition of a recession. To implement such waiver authority, 
the Conyers amendment would have required Congress to pass, by 
simple majority of each House, a law to authorize such a waiver 
for the year in which a recession occurred and the fiscal year 
that followed. Without such a provision, the only way that 
Congress would have of responding to the danger posed by a 
recession would be pursuant to section 1 of the proposed 
Balanced Budget Amendment, which provides that the Congress 
``may provide . . . for a specific excess of outlays over 
receipts by a directed solely to that subject in which three-
fifths of each House agree to such excess.''
    The recession issue was raised during the Minority's day of 
hearings by Robert Eisner, William R. Kenan Professor of 
Economics Emeritus at Northwestern University. Eisner testified 
that when the economy slows or shrinks is ``hardly the time to 
cut government expenditures to prevent a deficit.'' The danger 
is readily apparent. He said the proposed amendment would:

          Force what almost all economists would recognize as 
        procyclical behavior, that would aggravate economic 
        downturns. This would likely put us in a position where 
        efforts to eliminate a deficit, by slowing the economy 
        all the more, would make it necessary to take further 
        action that would in turn further slow the economy. We 
        would be caught in a situation where the actions 
        mandated to eliminate the deficit would keep making it 
        worse.

    The failure of the Committee to consider this critical 
issue during debate on the bill is but an example of the many 
issues that the Majority is unwilling to discuss in their rush 
to enact this proposal. No one could reasonable argue that the 
amendment by Rep. Conyers was dilatory or unimportant. Other 
than the Majority's unwillingness to debate and vote on this 
and other amendments, there was no real bar to their 
consideration.
    The problem is only compounded by the Republican leaders' 
apparent decision to bar perfecting amendments from 
consideration when the proposed amendment to the Constitution 
is taken up on the House Floor and Chairman Hyde's withdrawal 
of an offer to assist Members to have their amendments made 
eligible for consideration. These decisions by the Majority 
belie Chairman Hyde's statement during the mark-up that the 
Majority wants debate to be ``as open as possible.''
    There is no substitute for reasoned debate. I hope that the 
Majority's decision to cut off debate in this instance is not a 
harbinger of what the Committee on the Judiciary can expect for 
the remainder of the 104th Congress.
                                                       John Bryant.