House Report 112-117 - BALANCED BUDGET CONSTITUTIONAL AMENDMENT

[House Report 112-117]
[From the U.S. Government Publishing Office]

112th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 112-117

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BALANCED BUDGET CONSTITUTIONAL AMENDMENT

_______

June 23, 2011.--Referred to the House Calendar and ordered to be
printed

_______

Mr. Smith of Texas, from the Committee on the Judiciary, submitted the
following

R E P O R T

together with

DISSENTING VIEWS AND

ADDITIONAL DISSENTING 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, reports favorably thereon with an
amendment and recommends that the joint resolution as amended
do pass.

CONTENTS

Page
The Amendment.................................................... 2
Purpose and Summary.............................................. 2
Background and Need for the Legislation.......................... 3
Hearings......................................................... 13
Committee Consideration.......................................... 14
Committee Votes.................................................. 14
Committee Oversight Findings..................................... 24
New Budget Authority and Tax Expenditures........................ 24
Congressional Budget Office Cost Estimate........................ 24
Performance Goals and Objectives................................. 26
Advisory on Earmarks............................................. 26
Section-by-Section Analysis...................................... 26
Dissenting Views................................................. 28
Additional Dissenting Views...................................... 39

The Amendment

The amendment is as follows:
Strike all after the resolving clause and insert 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. Total outlays for any fiscal year shall not exceed total
receipts for that fiscal year, unless three-fifths of the whole number
of each House of Congress shall provide by law for a specific excess of
outlays over receipts by a rollcall vote.
``Section 2. Total outlays for any fiscal year shall not exceed 18
percent of economic output of the United States, unless two-thirds of
each House of Congress shall provide for a specific increase of outlays
above this amount.
``Section 3. The limit on the debt of the United States held by the
public shall not be increased unless three-fifths of the whole number
of each House shall provide by law for such an increase by a rollcall
vote.
``Section 4. Prior to each fiscal year, the President shall transmit
to the Congress a proposed budget for the United States Government for
that fiscal year in which total outlays do not exceed total receipts.
``Section 5. A bill to increase revenue shall not become law unless
two-thirds of the whole number of each House shall provide by law for
such an increase by a rollcall vote.
``Section 6. The Congress may waive the provisions of this article
for any fiscal year in which a declaration of war is in effect. The
provisions of this article may be waived for any fiscal year in which
the United States is engaged in military conflict which causes an
imminent and serious military threat to national security and is so
declared by a joint resolution, adopted by a majority of the whole
number of each House, which becomes law.
``Section 7. The Congress shall enforce and implement this article by
appropriate legislation, which may rely on estimates of outlays and
receipts.
``Section 8. Total receipts shall include all receipts of the United
States Government except those derived from borrowing. Total outlays
shall include all outlays of the United States Government except for
those for repayment of debt principal.
``Section 9. This article shall take effect beginning with the later
of the second fiscal year beginning after its ratification or the first
fiscal year beginning after December 31, 2016.''.

Purpose and Summary

H.J. Res. 1, proposing a balanced budget constitutional
amendment, is designed to establish a balanced budget as the
norm for Federal fiscal policy. To that end, the amendment
requires a three-fifths majority of each House's total
membership to approve a budget in which total Federal outlays
exceed total receipts or to raise the limit on the public debt.
Additionally, to help ensure that the budget is balanced, the
amendment provides that annual outlays cannot exceed 18 percent
of the country's annual economic output--a limit tied to the
amount of annual revenues the Federal Government historically
generates--unless two-thirds of each House of Congress votes to
exceed this level. Moreover, to deter the Federal Government
from consuming an increasing share of the national economy, the
amendment requires a two-thirds vote of each House's total
membership for a bill to increase revenue. This requirement
also discourages excessive reliance on tax increases--rather
than spending cuts--to achieve a balanced budget. The amendment
allows Congress to waive the amendment's requirements for any
fiscal year in which a declaration of war is in effect or in
which Congress determines by a joint resolution signed by the
President that ``an imminent and serious military threat to
national security'' exists.

Background and Need for the Legislation

The Federal budget deficit has become one of America's most
persistent political issues and a balanced Federal budget is a
bipartisan goal of many Members of Congress. Since the 1930's,
dozens of proposals have called for constitutional amendments
to address Federal budget deficits. In recent years, efforts to
secure a constitutional rule to require a balanced Federal
budget have intensified, as the Federal Government's habitual
failure to balance the budget has produced a debt of over $14
trillion. In this Congress, H.J. Res. 1 proposes to amend the
U.S. Constitution to require the annual Federal budget to be
balanced by the later of the first fiscal year after December
31, 2016, or the second fiscal year after its ratification by
the states.
Moving the Federal budget closer to balance is a long-term
necessity because the national debt cannot grow as a percentage
of the country's economic output indefinitely. Currently, the
total national debt is over $14 trillion and deficits and
spending continue to increase without regard to the burdens
imposed on current and future taxpayers. Although persistent
deficits threaten the country's long-term prosperity, the
Federal Government has proven unwilling or unable to regularly
balance the Federal budget. Statutory controls on government
spending have largely proven unsuccessful in limiting deficit
spending. For instance, Congress repeatedly relaxed deficit
targets in the Balanced Budget and Emergency Deficit Control
Act of 1985 (Gramm-Rudman-Hollings Act),\1\ and other budget
control mechanisms, such as the Budget Enforcement Act of
1990\2\ and Pay-As-You-Go rules, have not offered realistic
long-term prospects of continued deficit reduction.
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\1\P.L. 99-177, 99 Stat. 1037.
\2\P.L. 101-508; 104 Stat. 1388.
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A balanced budget amendment to the Constitution may be the
only way to control Federal spending and provide the country
with the long-term fiscal discipline it so desperately needs.
The adoption of H.J. Res. 1 would be more than a mere symbolic
act. A balanced budget constitutional amendment would
establish, in the country's governing document, the basic
principle that the Federal Government must not spend beyond its
means. It would have a powerful impact on Federal fiscal
policies by establishing a binding legal framework requiring
Congress to make challenging decisions. H.J. Res. 1 is not a
substitute for difficult legislative choices; rather, it is a
catalyst for congressional action.
A. Constitutional Amendment Procedures
Congress may propose an amendment to the Constitution
whenever two-thirds of both houses of Congress deem it
necessary.\3\ Alternatively, Congress must call for a
constitutional convention for the purpose of proposing
amendments on application of the legislatures of two-thirds of
the states.\4\ This alternative method has not been used to
date, although at one point 32 of the requisite 34 states
called for a constitutional convention in response to the
balanced budget issue.\5\ 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.\6\ The preamble to H.J. Res.
1 proposes ratification by state legislature.
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\3\U.S. Const. art. V.
\4\Id.
\5\James K. Rogers, The Other Way to Amend the Constitution: The
Article V Constitutional Convention Amendment Process, 30 Harv. J.L. &
Pub. Pol'y 1005, 1010 (2007).
\6\U.S. Const. art. V.
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B. The Federal Deficit
The Founders and early U.S. Presidents were in almost
unanimous agreement on the dangers of excessive public debt.
According to Nobel Prize winning economist James Buchanan,
``[p]oliticians prior to World War II would have considered it
to be immoral to spend more than they were willing to generate
in tax revenue, except during periods of extreme and temporary
emergency.''\7\ Consequently, for over 140 years of this
country's history--from 1789 to 1932--balanced budgets or
surplus budgets were the norm. However, since 1960 the United
States has run annual Federal budget deficits in all but 6
fiscal years.
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\7\James M. Buchanan, ``Clarifying the Confusion About the Balanced
Budget Amendment,'' 48 Nat'l Tax J. 347 (1995).
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Today, the United States is in the early stages of a severe
fiscal crisis. The Federal debt has exceeded the Nation's
economic output in only three fiscal years during U.S.
history--1945 through 1947. However, President Obama's fiscal
year 2011 budget estimated that beginning in 2012, the gross
Federal debt will exceed gross domestic product for the
foreseeable future. That budget also predicts that the Federal
deficit will more than double between 2009 and 2020. Assuming
that there are about 128 million U.S. households, the national
debt will amount to over $200,000 per household by 2020. These
figures do not even reflect the unfunded liabilities from
Social Security and Medicare commitments to current and future
participants in these programs. Over the next 75 years, Social
Security has promised to pay $7.8 trillion more in benefits
than it will receive in payroll taxes and, over that same
period, Medicare faces an unfunded liability in excess of $30
trillion.\8\
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\8\Heritage Foundation, Saving the American Dream: The Heritage
Plan to Fix the Debt, Cut Spending, and Restore Prosperity 9, 13
(Stuart M. Butler et al. eds., 2011).
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The tremendous amount of Federal spending does damage to
the U.S. economy. By consuming such an overwhelming part of the
capital in the economy, the government crowds out private
sector investment. Thus, when government spending rises
unchecked by fiscal responsibility, it chokes off the primary
engines of economic growth and risks our long-term security.
C. Statutory Attempts to Control Federal Spending and Deficits
Opponents of the balanced budget amendment argue that
Congress does not need a constitutional amendment to balance
the budget because Congress can address spending and the
deficit statutorily without waiting for ratification of a
constitutional amendment. However, past statutory efforts have
shown that Congress simply does not have the will to balance
the budget for an extended period of time. Statutory efforts to
balance the budget have failed because it is too easy for
Congress simply to reverse course and rescind its previous
declarations. Over the past 50 years, Congress has had a dismal
history of attempting to impose fiscal discipline on itself,
despite numerous statutory proposals to achieve this end.
Senses of the Congress. Congressional declarations that the
budget should be balanced have had no effect of balancing the
budget. For example, the Revenue Act of 1964 states that ``[t]o
further the objective of balanced budgets in the near future,
Congress by this action recognizes the importance of taking all
reasonable means to restrain government spending,''\9\ and, the
Humphrey-Hawkins Full Employment Act of 1978 included a
provision calling for a balanced budget and declared that a
balanced budget is an ``important national requirement[].''\10\
These and other pronouncements of the importance of balancing
the budget--including the commitment codified in 31 U.S.C.
Sec. 1103 ``that budget outlays of the United States Government
for a fiscal year may be not more than the receipts of the
Government for that year''\11\--have done nothing to ameliorate
the ever-increasing Federal deficit.
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\9\P.L. 88-272, Sec. 1, 78 Sta. 19.
\10\P.L. 95-523, 92 Stat. 1887.
\11\31 U.S.C. Sec. 1103.
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Congressional Budget and Impoundment Control Act of 1974.
The Congressional Budget Act of 1974\12\ requires the House and
Senate to adopt a budget resolution each year, setting forth
aggregate spending and revenue levels, and spending levels by
major functional categories. The 1974 act includes an optional
reconciliation procedure that provides for the development and
consideration of revenue, spending, and debt-limit legislation.
During the 1980's and much of the 1990's, reconciliation was
used principally as a means of reducing the deficit. However,
in recent years, the reconciliation process has been used
mainly to expedite the passage of legislation that increases
the deficit. Moreover, only in one 4-year period (1997-2001)
after enactment of the 1974 act has the Federal budget been
balanced.
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\12\P.L. 93-344, 88 Stat. 297.
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Byrd Amendments. After the Congressional Budget and
Impoundment Control Act failed to achieve the fiscal discipline
that was envisioned, Congress enacted a series of ``Byrd
Amendments'' in 1978, 1980, and 1982 to try to balance the
budget. The first, passed as part of the Bretton Woods
Agreements Act, mandated that ``total budget outlays of the
Federal Government shall not exceed its receipts'' beginning in
fiscal year 1981.\13\ By 1980, the mandatory language of the
1978 amendment had been watered down to state only that
``Congress reaffirms its commitment'' to a balanced budget in
fiscal year 1981.\14\ Finally, in 1982, the reference to fiscal
year 1981 was deleted, such that under current law Congress
perpetually ``reaffirms its commitment'' to a balanced Federal
budget every year.\15\ Obviously, the statutory commitment of
the Byrd Amendments has been ignored.
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\13\P.L. 95-435, Sec. 7, 92 Stat. 1053.
\14\P.L. 96-389, Sec. 3, 94 Stat. 1553.
\15\31 U.S.C. Sec. 1103.
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Gramm-Rudman-Hollings. The Balanced Budget and Emergency
Deficit Control Act of 1985 (also known as Gramm-Rudman-
Hollings),\16\ mandated a balanced budget by fiscal year 1991.
To reach that goal, the Act required automatic across-the-board
spending cuts if Congress and the President could not agree on
a balanced budget in a given year. This legislation proved
inadequate at the task of closing the gap between the Federal
Government's revenue and expenditures and the national debt
continued to grow. As one scholar has observed, ``Gramm-Rudman-
Hollings failed because the enforcement mechanism was not
credible. Congress's power to change the process was
unconstrained. . . . As soon as punishments became too harsh,
Congress could (and did) change the rules.''\17\
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\16\P.L. 99-177, 99 Stat. 1037.
\17\David Primo, Rules and Restraint 112 (2007).
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Debt Ceiling. The Second Liberty Bond Act of 1917
established a statutory limit on Federal debt of $11.5
billion.\18\ Congress had previously approved each debt
issuance separately. The statutory debt ceiling has done little
to place a ceiling on the national debt. Since it was
established, the debt ceiling has been raised nearly 100 times
and currently stands at over $14 trillion.
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\18\P.L. 65-43, 40 Stat. 288.
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PAYGO. Statutory Pay-As-You-Go (PAYGO)\19\ and House and
Senate PAYGO rules are supposed to help reduce spending and
deficits by preventing tax cuts and new direct spending that is
not deficit neutral. However, PAYGO does nothing to deal with
the costs of existing direct spending programs. Moreover, there
are loopholes in PAYGO that allow its caps on new direct
spending to be avoided. Indeed, the Congressional Research
Service has even prepared a report entitled ``Techniques for
Preventing a Budget Sequester,'' explaining ways around the
PAYGO requirements.
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\19\Part of the Budget Enforcement Act of 1990 and the Statutory
PAYGO Act of 2010.
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Line-item Veto. Because the President must approve or veto
a spending or revenue act in its entirety, many advocates of
greater budget discipline have proposed the President be
granted a line-item veto as a means of controlling Federal
spending. In 1996, President Clinton signed into law the Line
Item Veto Act.\20\ Under the Act, the President was authorized
to strike individual items of discretionary spending, direct
spending, and certain limited tax benefits in any law.\21\
While this law may have provided some measure of budget
control, especially control over earmarks and other targeted
spending, the law was declared unconstitutional by the Supreme
Court in 1998.\22\
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\20\P.L. 104-130, 110 Stat. 1200.
\21\The President was only to exercise the cancellation authority
if he determined that such cancellation would reduce the Federal budget
deficit and would not impair essential government functions or harm the
national interest; and then notified the Congress in a special message
of any such cancellation within five calendar days after enactment of
the law providing such amount, item, or benefit. The act provided 30
days for the expedited congressional consideration of disapproval bills
to reverse the cancellations contained in the special messages received
from the President.
\22\Clinton v. City of New York, 524 U.S. 417 (1998).
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In one way or another, each of the statutory attempts to
control Federal spending has failed to constrain Congress from
spending beyond annual Federal revenues. This is in large part
because no Congress can bind a succeeding Congress by a simple
statute. Any statute Congress passes to reduce Federal spending
or require balanced Federal budgets can be repealed by the
simple expedient of adopting a new statute that conflicts with
the earlier measure.
D. Legislative History of the Balanced Budget Amendment
During the nineteenth and early twentieth centuries, when a
balanced Federal budget was the norm and part of the
``unwritten constitution,'' there was little need for Congress
to focus on a balanced budget amendment. However, as the
Federal Government has run regular budget deficits of an
increasingly large magnitude, efforts to adopt a balanced
budget constitutional amendment have become more intense. In
1936, Representative Harold Knutson of Minnesota proposed the
first constitutional amendment to balance the Federal
budget.\23\ His proposal would have established a per capita
limitation on the Federal public debt. Under the proposed
amendment Congress could run budget deficits, but only to the
extent that the per capita ceiling was not breached.
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\23\H.J. Res. 579, 74th Cong.
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Since Representative Knutson's proposed amendment, numerous
constitutional amendments have been proposed to require a
balanced budget. In the 78th Congress, Senator Millard Tydings
and Representative Wesley Disney introduced constitutional
amendments to prohibit government appropriations from exceeding
receipts.\24\ Balanced budget constitutional amendments were
introduced regularly in the 1950's. Amendments were first
proposed by Senators Styles Bridges and Harry Byrd and later by
Senators Strom Thurman and Carl Curtis, to require the
submission by the President of an annual balanced budget and to
prevent Congress from adjourning without having enacted such a
budget.
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\24\S.J. Res. 97 (78th Cong.); H.J. Res. 195 (78th Cong.).
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More recent efforts for a balanced budget amendment
commenced in 1975 when states began petitioning Congress for a
constitutional convention under Article V of the Constitution
for the purpose of considering a balanced budget constitutional
amendment. As part of this effort, thirty-two states petitioned
for a constitutional convention.
The first real shot at Congress passing a balanced budget
constitutional amendment did not come until the 1980's. A
balanced budget amendment passed the Senate by a 69-to-31 vote
in 1982,\25\ but, although a substantial majority of the House
voted in favor of the House version of the amendment, the 236-
to-187 margin fell short of the required two-thirds
threshold.\26\ After the 1982 failure to garner a two-thirds
majority, successful discharge petition efforts in the House
led to consideration of balanced budget proposals that passed
by wide margins on three more occasions but failed to reach the
two-thirds threshold--279-to-150 in 1990, 280-to-153 in 1992,
and 271-to-153 in 1994. Additionally, in the Senate, in 1986, a
balanced budget amendment failed by one vote (66 to 34)\27\ and
again, in 1994, by four votes (63 to 37).\28\
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\25\S.J. Res. 58 (97th Cong.).
\26\H.J. Res. 350 (97th Cong.).
\27\S.J. Res. 225 (99th Cong.).
\28\S.J. Res. 41 (103d Cong.).
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The balanced budget amendment came to the forefront in 1995
as part of the Contract with America. In 1995, a balanced
budget amendment, for the first time ever, passed the House by
the required two-thirds margin (300 to 132)\29\ but fell one
vote short in the Senate of being sent to the states for
ratification.\30\ And, in 1997, the balanced budget amendment
once again failed by to meet the two-thirds threshold in the
Senate by one vote.\31\
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\29\H.J. Res. 1 (104th Cong.).
\30\S.J. Res. 1 (104th Cong.). The actual vote total was 65 to 35,
but Senator Dole switched his vote to ``no'' in order to preserve his
right to call the balanced budget amendment up for reconsideration.
\31\S.J. Res. 1 (105th Cong.).
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E. The Current Proposal
On January 5, 2011, Representative Goodlatte introduced
H.J. Res. 1 to propose a balanced budget amendment to the
Constitution and re-establish the formal and informal
constitutional limitations on Federal spending and deficits
that previously existed. The proposal has over 130 co-sponsors.
H.J. Res. 1 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 basic provision in H.J. Res. 1 is that the Federal
Government's outlays cannot exceed receipts unless approved by
a three-fifths majority of both Houses of Congress.
Additionally, the proposed balanced budget amendment requires a
three-fifths vote in both Houses to increase the debt limit and
a two-thirds vote to pass a bill to increase revenue. H.J. Res.
1 further provides that total outlays for any fiscal year shall
not exceed eighteen percent of economic output of the United
States, unless approved by two-thirds of each House of
Congress.
Governmental flexibility is not compromised by the
supermajority votes required by H.J. Res. 1 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 two-thirds vote required for legislation to
increase tax revenue is an important feature of this
constitutional amendment to discourage excessive reliance on
tax increases rather than spending cuts to balance the budget.
And, the supermajority vote requirement to increase the debt
ceiling is to discourage government borrowing to pay for
additional spending.
F. H.J. Res. 1 is Consistent with the Constitution
The balanced budget amendment proposed by H.J. Res. 1 is
consistent with the nature and purpose of the U.S.
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.
According to Professor Kenneth Dam, ``[w]hen one contemplates
the Constitution as a whole, considering provisions not
specifically directed to fiscal matters and taking into account
the Federal structure created by the Constitution, an imposing
edifice of fiscal powers and limitations can be perceived. The
result is what I call the `fiscal Constitution.'''\32\ Because
of the substantial attention the Constitution already gives to
economics, arguments that fiscal policy does not belong in the
Constitution are unconvincing.
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\32\Kenneth W. Dam, The American Fiscal Constitution, 44 U Chi. L
Rev 271, 272 (1977).
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Indeed, the Constitution was born out of the fiscal
problems caused by the Articles of Confederation. As historian
Sidney Homer put it, ``[i]n spite of the great potential
economic strength of the new country, its financial and
political system broke down completely in 1786. Credit at home
and abroad was no longer available. The impossibility of
government without money, credit, or power led to the
Constitutional Convention of 1787 and a new nation in
1789.''\33\ In other words, the need to balance the budget and
restore the good credit of the government led directly to the
drafting of the Constitution in the first place.
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\33\Whether the Constitution Should be Amended to Address the
Federal Deficit?: Hearing Before Subcomm. on the Constitution of the
House Comm. on the Judiciary, 112th Cong. (2011) (testimony of Andrew
Moylan, National Taxpayers Union); see also Aaron Wildavsky, How to
Limit Government Spending 74 (1980) (``Dissatisfaction with monetary
and debt policy under the Articles of Confederation spurred the
devising of an entirely new document.'').
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Moreover, the Framers and leaders of the U.S. government
during most of this Nation's history accepted balanced budget
principles; accordingly, for approximately the first 150 years
of this Nation's history--from 1789 to 1932--balanced budgets
or surplus budgets were the norm. When deficits did occur they
generally were insignificant, usually related to wartime
circumstances, and generally were compensated for by subsequent
surpluses. Thus, for much for the Nation's history, the
requirement of budget balancing under normal economic
circumstances was considered an unwritten constitutional rule.
For this reason, mandating a balanced budget would have been
superfluous in earlier times. According to Professor William
Breit,

[t]he balanced-budget rule which served as part of the
Constitution was, of course, not in the form of a
written statement that every expenditure had to be
balanced by a tax. But it nevertheless had
constitutional status. For expenditures in excess of
receipts were considered to be in violation of moral
principles. The imperative of the balanced budget was
an extra-legal rule or custom that grew up around the
formal document. It existed outside the precise letter
of the Constitution on all fours with the system of
political parties, the presidential cabinet, the actual
operation of the electoral college system, and the
doctrine of judicial review.\34\
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\34\William Breit, ``Starving the Leviathan: Balanced Budget
Prescriptions Before Keynes,'' in Fiscal Responsibility in
Constitutional Democracy (James M. Buchanan and Richard E. Wagner eds.,
1978).

But the country's early political leaders were aware of the
dangers of a Federal deficit. As Thomas Jefferson stated, ``I
place economy among the first and most important of republican
virtues, public debt as the greatest of dangers to be
feared.''\35\ Thus, Jefferson wished ``it were possible to
obtain a single amendment to our Constitution . . . taking from
the Federal Government the power of borrowing.''\36\ In fact,
early U.S. Presidents were in virtually unanimous agreement on
the dangers of excessive public debt. In his first annual
address to Congress, President John Adams stated that, ``[t]he
consequences arising from the continual accumulation of public
debts in other countries ought to admonish us to be careful to
prevent their growth in our own.''\37\ President James Madison
stated that one of the primary goals of his Administration
would be ``to liberate the public resources by an honorable
discharge of public debts.''\38\ President James Monroe held a
similar position observing that, after the elimination of the
public debt, the government ``would be left at liberty . . . to
apply such portions of the revenue as may not be necessary for
current expenses to such other objects as may be most conducive
to the public security and welfare.''\39\ President John Quincy
Adams also found a balanced budget to be a sound maxim: ``among
the maxims of political economy which the stewards of the
public money should never suffer without urgent necessity to be
transcended is that of keeping the expenditures of the year
within the limits of its receipts.''\40\
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\35\Letter from Thomas Jefferson to Governor William Plumer of New
Hampshire (July 21, 1816) in 7 The Writings of Thomas Jefferson 19
(H.A. Washington ed. 1855).
\36\Letter from Thomas Jefferson to John Taylor (Nov. 26, 1798) in
4 The Writings of Thomas Jefferson 259 (1869).
\37\President John Adams, First Annual Address to Congress (Nov.
23, 1797).
\38\President James Madison, First Inaugural Address (March 4,
1809).
\39\2 Messages and Papers of the Presidents 823 (J. Richardson ed.
1897).
\40\President John Quincy Adams, Third Annual Message to Congress
(Dec. 4, 1827).
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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 the country's means. The balanced budget amendment is a
major step toward securing an environment in which fiscally
responsible policies are more easily attainable. The current
environment is biased in favor of ever-increasing levels of
Federal Government spending.
Consistent with the Constitution's framework, H.J. Res. 1
is needed to overcome the current bias in favor of increasing
government spending by restoring the balanced budget principles
that existed for much of the Nation's history. The purpose of
the amendment is not to write economic policy into the
Constitution, nor does it propose to intrude the Constitution
into Congress's day-to-day spending and taxing decisions.
Rather, the balanced budget amendment merely proposes to create
a fiscal environment in which spending decisions will once
again be constrained by available revenues.
G. The Supermajority Voting Requirements in H.J. Res. 1 Are Consistent
with the Constitution
Opponents of the balanced budget constitutional amendment
have asserted that the amendment's supermajority voting
requirements should not be placed into Constitution. This
argument, of course, ignores the nine other supermajority
voting requirements already included in the Constitution.\41\
But more fundamentally it fails to acknowledge the structure of
the government created by the Constitution with its system of
checks and balances and separation of powers designed to impose
restraints on the actions of the people's elected
representatives. Over the years, Americans have suffered from
the removal of written and unwritten constraints that were
intended by the framers to limit the authority of Congress.
Rather than being contrary to the Constitution, the balanced
budget constitutional amendment's supermajority voting
requirements aim to restore necessary structural constraints on
the Congress.
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\41\U.S. Cont. art. I, Sec. 3 (``No person shall be convicted
without the concurrence of two thirds of the Members present.''); U.S.
Cont. art. I, Sec. 5 (``Each House may determine the Rules of its
Proceedings, punish its Members for disorderly Behavior, and, with the
Concurrence of two-thirds, expel a Member.''); U.S. Cont. art. I,
Sec. 7 (``If after such Reconsideration two thirds of that House shall
agree to pass the Bill, it shall be sent, together with the Objections,
to the other House, by which it shall likewise be reconsidered, and if
approved by two thirds of that House, it shall become a Law.''); U.S.
Cont. art. II, Sec. 2 (``[The President] shall have Power . . . to make
Treaties, provided two thirds of the Senators present concur.''); U.S.
Cont. art. V (``The Congress, whenever two thirds of both Houses shall
deem it necessary, shall propose Amendments to this Constitution.)'';
U.S. Cont. art. II, Sec. 1 (``[When choosing the President in the
House,] a quorum for this Purpose shall consist of a Member or Members
from two thirds of the States, and a Majority of all the States shall
be necessary to a Choice.''); U.S. Const. art. VII (``The Ratification
of the Conventions of nine States, shall be sufficient for the
Establishment of this Constitution between the States so ratifying the
Same.''); U.S. Const. amend. XIV, Sec. 3 (``No person shall . . . hold
any [US] office . . . who, having previously taken an oath . . . to
support the Constitution . . . shall have engaged in insurrection or
rebellion. . . . But Congress may by a vote of two-thirds of each
House, remove such disability.''); U.S. Const. amend. XXV, Sec. 4 (``If
Congress . . . determines by two thirds vote of both Houses that the
President is unable to discharge the powers and duties of his office,
the Vice President shall continue to discharge the same as Acting
President.'').
---------------------------------------------------------------------------
One of the fundamental problems of with any democratic form
of government is ``that concentrated interest groups have more
influence with legislators than diffuse groups, even if the
diffuse groups represent a numerical majority. Our present
budget crisis is in large measure a reflection of repeated
instances of this dynamic.''\42\ The taxes and borrowing
required to pay for expenditures do not impose a substantial
constraint on Congress because the true cost of taxes and
borrowing by the Federal Government is diffused over the entire
population and, in many cases, future generations. As Professor
E. Donald Elliott has explained,
---------------------------------------------------------------------------
\42\John O. McGinnis and Michael B. Rappaport, The
Constitutionality of Legislative Supermajority Requirements: A Defense,
105 Yale L.J. 483, 509 (2005).

Most government spending programs provide significant
benefits to relatively concentrated, and, therefore,
relatively well-organized and politically effective
constituencies. On the other hand, the costs of
government spending are spread over a large and diffuse
group--taxpayers. Because the incremental cost of each
government spending decision is relatively
insignificant to individual taxpayers, and because the
benefits from organizing to oppose government spending
are speculative and difficult to appropriate, . . . it
will be difficult, if not impossible, to organize the
broad mass of taxpayers, as such, into an effective
counterweight to spending that benefits ``special
interest groups'' with more narrowly focused interests.
Thus, . . . there is an inherent bias built into the
political system in favor of spending to benefit
organized constituencies, even when the total costs of
a program exceed its benefits. . . .
The basic institutional checks designed by the
framers of the Constitution to limit the power of
interest groups have long since eroded. First, the
seventeenth amendment provided direct popular election
of Senators. Second, the electoral college has now
become largely vestigial, so that as a practical
matter, the President is also popularly elected. Third,
a vast ``administrative state'' with broad delegated
powers has arisen that lies largely outside the system
of checks and balances crafted so carefully by the
framers. Finally, as both the country and the nature of
government have changed, the principle of geographic
diversity of interests, upon which the framers placed
primary reliance, is no longer as potent a check on the
power of special interest groups as it may once have
been. Today there are many interest groups that are
more or less evenly distributed throughout the country
(Social Security recipients, for example), and they can
bring potent electoral pressures to bear on
Representatives, Senators, and Presidents alike.
The cumulative effect of these changes is to render
our political institutions systematically vulnerable to
the influence of well-organized, narrowly-focused
groups seeking subsidies or other forms of preferential
treatment from the Federal Government. The current
deficit is merely the outward symptom of these more
fundamental problems, resulting from the way in which
our political institutions have evolved.\43\
---------------------------------------------------------------------------
\43\E. Donald Elliott, Constitutional Conventions and the Deficit,
1985 Duke L.J. 1077, 1090-91, 1095 (1985).

In other words, the concept of ``limited government'' or
``enumerated powers'' that was at the root of the Constitution
and that served to check the growth of the public sector during
most of the Nation's history has been altered drastically by
the evolution of public policy and constitutional
interpretation during the 20th century in a manner that never
could have been predicted by the framers of the Constitution.
As Milton Friedman observed, constraints in the Constitution
and originally envisioned by the framers ``to limit Federal
action in the economic area . . . have now been swept
away.''\44\ According to Professor Friedman, these constraints
``cannot be restored in their initial form. But some
replacement is desperately needed.''\45\ The supermajority
voting requirements in H.J. Res. 1 provide that restraint.
---------------------------------------------------------------------------
\44\Proposed Balanced Budget/Tax Limitation Constitutional
Amendment: Hearing on S.J. Res. 5 Before the Subcomm. on the
Constitution of the Sen. Comm. on the Judiciary, 98th Cong. (1984)
(statement of Professor Milton Friedman).
\45\Id.
---------------------------------------------------------------------------
As James Madison wrote in the Federalist Papers,
``[g]overnment is the greatest of all reflections on human
nature. If men were angels no government would be necessary. If
angels were to govern man, neither external nor internal
controls on government would be necessary.''\46\ The
supermajority rules H.J. Res. 1 proposes are necessary
``controls on government'' spending and budget deficits.
Madison emphasized the paramount responsibility of the new
Government to ``break and control the violence of
faction.''\47\ According to Madison, the causes of ``factions''
are ``sown in the nature of man'' and must be controlled by the
institutions created by the Constitution.
---------------------------------------------------------------------------
\46\The Federalist No. 51 (James Madison).
\47\The Federalist No. 10 (James Madison). Madison defined
``faction'' as a ``majority or minority of the whole, who are united
and actuated by some common impulse or passion, or of interest adverse
to the rights of other citizens, or to the permanent and aggregate
interests of the whole.''
---------------------------------------------------------------------------
The Federal Government's present financial crisis, in part,
is the creation of, and continues because of, the role of
factions within the political process. The supermajority voting
requirements proposed by H.J. Res. 1 should be understood as an
attempt to counteract those interests and restore the original
constitutional balance on deficits and spending and are
entirely consistent with the framers understanding of a
constitutional republic.
H. The Balanced Budget Amendment and Social Security and Medicare
A continuation of deficit spending poses the greatest long-
term threat to the integrity of Social Security, Medicare, and
other government benefit programs. Yet, during committee
consideration of the balanced budget, members of the minority
offered five amendments to in some way limit the application of
balanced budget principles to Social Security, Medicare, or
other government benefit programs. But the balanced budget
amendment is exactly what these programs need if they are to
continue providing benefits into the future. The balanced
budget amendment will help save these worthy government
programs by strengthening the economy, reducing interest rates
and inflation (which helps senior citizens living on fixed
incomes), and ensuring that the Federal Government has the
funds available to meet its Social Security and Medicare
obligations when they become due.
The best way to ensure that Social Security, Medicare, and
other programs will have enduring value is for the Federal
Government to get its fiscal house in order. As Robert Myers,
Social Security's former chief actuary and deputy commissioner,
wrote, in support of a balanced budget amendment,

If we continue to run Federal deficits year after year,
and if interest payments continue to rise at an
alarming rate, we will face two dangerous
possibilities. Either we will raid the trust funds to
pay for our prolificacy, or we will print money,
dishonestly inflating our way out of indebtedness. Both
cases would devastate the real value of the Social
Security Trust Funds. Regaining control of our fiscal
affairs is the most important step that we can take to
protect the soundness of the Social Security trust
funds.\48\
---------------------------------------------------------------------------
\48\143 Cong. Rec. S1865 (daily ed. March 4, 1997).

It appears that the motivation of those offering amendments
to exempt or otherwise limit the balanced budget amendment's
application to government benefit programs is to attempt to
prevent the benefits those programs provide from being reduced.
This concern is misplaced. Adoption of a balanced budget
constitutional amendment will not in any way mean that
government benefits, such as Social Security benefits, will be
reduced. There is no reason to believe that the balanced budget
amendment will cause the Federal Government to abandon its
commitment to older Americans; Social Security and Medicare
enjoy broad congressional support. The balanced budget
amendment should enhance, not detract from the protection these
programs enjoy in the future.

Hearings

The Committee's Subcommittee on the Constitution held 1 day
of hearings on proposed amendments to the Constitution to
control the Federal budget deficit on May 13, 2011. Testimony
was received from the Honorable Bob Goodlatte; David Primo,
Associate Professor of Political Science, University of
Rochester, and Senior Scholar, Mercatus Center, George Mason
University; Robert Greenstein, Founder and President, Center on
Budget and Policy Priorities; and Andrew Moylan, Vice President
of Government Affairs, National Taxpayers Union. Additional
material was submitted by Pass the Balanced Budget Amendment,
Renewing American Leadership Action, National Tax Limitation
Committee, and the 60 Plus Association.

Committee Consideration

On June 15, 2011, the Committee met in open session and
ordered the joint resolution H.J. Res. 1 favorably reported
with an amendment, by a rollcall vote of 20 to 12, a quorum
being present.

Committee Votes

In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
following rollcall votes occurred during the Committee's
consideration of H.J. Res. 1.
1. An amendment by Mr. Conyers: (1) exempting from the
calculation of total receipts all receipts derived from the
Federal Hospital Insurance Trust Fund, and (2) exempting from
the calculation of total outlays all outlays of the Federal
Hospital Insurance Trust Fund and the Federal Supplementary
Medical Insurance Trust Fund. Defeated 9 to 17.

ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte...................................................
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................
Ms. Lofgren.....................................................
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
-----------------------------------------------
Total....................................................... 9 17
----------------------------------------------------------------------------------------------------------------

2. An amendment by Mr. Gohmert to lower the annual cap on
Federal outlays from 20 percent of the economic output of the
United States to 18 percent of economic output. Approved 13 to
11.

ROLLCALL NO. 2
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte...................................................
Mr. Lungren..................................................... X
Mr. Chabot......................................................
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
-----------------------------------------------
Total....................................................... 13 11
----------------------------------------------------------------------------------------------------------------

3. An amendment by Mr. Watt to strike the balanced budget
constitutional amendment's requirements that: (1) the public
debt limit shall not be increased unless three-fifths of each
House votes to provide for such an increase, and (2) a bill to
increase revenue shall not become law unless three-fifths of
each House votes to provides for such an increase. Defeated 7
to 17.

ROLLCALL NO. 3
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................
Mr. Gallegly....................................................
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan......................................................
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson..................................................... X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
-----------------------------------------------
Total....................................................... 7 17
----------------------------------------------------------------------------------------------------------------

4. An amendment by Mr. Nadler to exclude oil and natural
gas companies with annual gross receipts in excess of $10
billion from the balanced budget constitutional amendment's
requirement that a bill to raise revenue must be approved by
three-fifths of each House. Defeated 7 to 12.

ROLLCALL NO. 4
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly....................................................
Mr. Goodlatte................................................... X
Mr. Lungren.....................................................
Mr. Chabot......................................................
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Griffin.....................................................
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee................................................. X
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson.....................................................
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
-----------------------------------------------
Total....................................................... 7 12
----------------------------------------------------------------------------------------------------------------

5. An amendment by Mr. Nadler to allow Congress to waive
the requirements of the balanced budget constitutional
amendment for up to 2 fiscal years if real economic growth is
or will be negative for two consecutive quarters. Defeated 9 to
17.

ROLLCALL NO. 5
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly....................................................
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen.......................................................
Mr. Johnson..................................................... X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
-----------------------------------------------
Total....................................................... 9 17
----------------------------------------------------------------------------------------------------------------

6. An amendment by Mr. Scott to strike the balanced budget
constitutional amendment's requirement that a bill to increase
revenue shall not become law unless three-fifths of each House
votes to provide for such an increase. Defeated 7 to 16.

ROLLCALL NO. 6
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly....................................................
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler......................................................
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee................................................. X
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson..................................................... X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
-----------------------------------------------
Total....................................................... 7 16
----------------------------------------------------------------------------------------------------------------

7. An amendment by Mr. Scott to strike the balanced budget
constitutional amendment's requirement that the public debt
limit shall not be increased unless three-fifths of each House
votes to provide for such an increase. Defeated 7 to 17.

ROLLCALL NO. 7
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly....................................................
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler......................................................
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee................................................. X
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson..................................................... X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
-----------------------------------------------
Total....................................................... 7 17
----------------------------------------------------------------------------------------------------------------

8. An amendment by Ms. Jackson Lee to allow Congress to
waive the requirements of the balanced budget constitutional
amendment for any fiscal year in which the United States is
engaged in the use of military force. Defeated 5 to 18.

ROLLCALL NO. 8
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly....................................................
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler......................................................
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee................................................. X
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson..................................................... X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu......................................................... X
Mr. Deutch......................................................
Ms. Sanchez.....................................................
-----------------------------------------------
Total....................................................... 5 18
----------------------------------------------------------------------------------------------------------------

9. An amendment by Mr. Conyers: (1) exempting from the
calculation of total receipts all receipts derived from the
Federal Old-Age and Survivors Insurance Trust Fund and the
Federal Disability Insurance Trust Fund, and (2) exempting from
the calculation of total outlays all outlays of the Federal
Old-Age and Survivors Insurance Trust Fund and the Federal
Disability Insurance Trust Fund. Defeated 8 to 19.

ROLLCALL NO. 9
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................ X
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz.................................................... X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee................................................. X
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson..................................................... X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
-----------------------------------------------
Total....................................................... 8 19
----------------------------------------------------------------------------------------------------------------

10. An amendment by Mr. Jordan to require a two-thirds,
rather than a three-fifths, majority of each House of Congress
to pass a bill to increase revenue. Approved 17 to 8.

ROLLCALL NO. 10
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz.................................................... X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee................................................. X
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson..................................................... X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
-----------------------------------------------
Total....................................................... 17 8
----------------------------------------------------------------------------------------------------------------

11. Two amendments by Ms. Jackson Lee considered en bloc
to: (1) require a three-fifths majority of each House to pass a
bill to limit funding for or privatize Social Security or
Medicare, and (2) require a three-fifths majority of each House
to pass a bill to limit funding for Medicaid. Defeated 7 to 21.

ROLLCALL NO. 11
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz.................................................... X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen.......................................................
Mr. Johnson..................................................... X
Mr. Pierluisi...................................................
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
-----------------------------------------------
Total....................................................... 7 21
----------------------------------------------------------------------------------------------------------------

12. An amendment by Mr. Deutch to exempt from the balanced
budget constitutional amendment's calculation of total outlays,
outlays authorized under section 215(i) of the Social Security
Act. Defeated 12 to 15.

ROLLCALL NO. 12
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot......................................................
Mr. Issa........................................................
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert.....................................................
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz.................................................... X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
-----------------------------------------------
Total....................................................... 12 15
----------------------------------------------------------------------------------------------------------------

13. Motion to report H.J. Res. 1 favorably, as amended.
Passed 20 to 12.

ROLLCALL NO. 13
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble.......................................................
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot......................................................
Mr. Issa........................................................ X
Mr. Pence....................................................... X
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman...................................................... X
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren.....................................................
Ms. Jackson Lee................................................. X
Ms. Waters...................................................... X
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley.....................................................
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez.....................................................
-----------------------------------------------
Total....................................................... 20 12
----------------------------------------------------------------------------------------------------------------

Committee Oversight Findings

In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee advises 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.

New Budget Authority and Tax Expenditures

Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.

Congressional Budget Office Cost Estimate

In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the joint resolution, H.J. Res. 1, the following
estimate and comparison prepared by the Director of the
Congressional Budget Office under section 402 of the
Congressional Budget Act of 1974:

U.S. Congress,
Congressional Budget Office,
Washington, DC, June 21, 2011.
Hon. Lamar Smith, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.J. Res 1, a joint
resolution proposing a balanced budget amendment to the
Constitution of the United States.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Barry Blom.
Sincerely,
Douglas W. Elmendorf,
Director.

Enclosure

cc:
Honorable John Conyers, Jr.
Ranking Member
H.J. Res. 1--A joint resolution proposing a balanced budget amendment
to the Constitution of the United States.
H.J. Res. 1 would propose an amendment to the Constitution
that would prohibit total outlays of the United States from
exceeding total receipts in a fiscal year; such a requirement
could be overridden by a three-fifths vote in each House. The
amendment also would require that:

LTotal outlays in any fiscal year not exceed
18 percent of gross domestic product (GDP), unless the
Congress approves a specific increase over that amount
by a two-thirds vote;

LA three-fifths vote be taken in each House to
raise the limit on federal debt held by the public and
a two-thirds vote to approve any bill that increases
revenue; and

LThe proposed budget submitted by the
President be in balance.

Such provisions could be waived for any fiscal year in
which a declaration of war is in effect or if a majority of
each House determines that the United States is engaged in a
military conflict that poses an imminent and serious military
threat to national security.
The amendment would have to be ratified by three-fourths of
the states within 7 years of its submission for ratification,
although no state would be required to take action on the
resolution, either to reject or approve it. If ratified by the
required number of states, the amendment would take effect
beginning with fiscal year 2018 or the second fiscal year after
its ratification, whichever is later.
The budgetary impact of adopting this amendment to the
Constitution is very uncertain because it depends on when it
would take effect and the extent to which the Congress would
exercise the discretion provided by the amendment to approve
budget deficits. Ultimately, changes in budgetary outcomes
would depend on what future legislation was adopted to meet the
requirements set by the amendment and how effective that
legislation would be in meeting those targets.
Under the assumptions governing CBO's latest baseline
projections (namely that current laws remain unchanged), the
budget deficit in 2018--the first year the amendment could
potentially take effect--would total $585 billion (2.8 percent
of GDP). Under those assumptions, outlays in 2018 would equal
23.2 percent of GDP, while revenues would total 20.4 percent.
Outlays have averaged close to 21 percent of GDP over the past
40 years.
By itself, enacting H.J. Res. 1 would not affect direct
spending or revenues; therefore, pay-as-you-go procedures do
not apply.
H.J. Res. 1 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
The CBO staff contact for this estimate is Barry Blom. The
estimate was approved by Theresa Gullo, Deputy Assistant
Director for Budget Analysis

Performance Goals and Objectives

The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.J.
Res. 1 proposes an amendment to the U.S. Constitution to
require the annual Federal budget to be balanced (unless three-
fifths of each House votes to pass a budget in which total
outlays exceed total receipts) to restore fiscal discipline
over Federal spending and protect the country's future economic
strength and national standard of living.

Advisory on Earmarks

In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.J. Res. 1 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.

Section-by-Section Analysis

Section 1. This section provides that total outlays for any
fiscal year shall not exceed total receipts for that fiscal
year, unless three-fifths of the whole number of each House of
Congress provide by law for a specific excess of outlays over
receipts by a rollcall vote. This provision forces Congress to
commit itself each year to implementing a balanced budget, but
recognizes the need for congressional flexibility to respond
appropriately to unforeseen circumstances.
Section 2. This section provides that total outlays for any
fiscal year cannot exceed eighteen percent of annual economic
output of the United States, unless two-thirds of each House of
Congress approves a specific increase in outlays above this
amount. This limit reflects the share of economic output that
Federal revenues have typically represented since World War II.
Because spending should be linked to the average and customary
revenues of the Federal Government if the annual budget is to
be balanced, capping total outlays at eighteen percent of
economic output furthers the overall purpose of the balanced
budget amendment.
Section 3. This section provides that the limit on the
public debt of the United States cannot be increased unless
three-fifths of both Houses of Congress provide for an increase
by law. Section 3 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.
Section 4. This section 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. The goal of
bringing outlays into line with receipts is important enough to
provide roles for both the Executive and Legislative Branches.
Section 5. This section imposes a supermajority voting
requirement to increase Federal revenues. A bill increasing the
Federal revenues must have the support of two-thirds 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.
Section 6. This section delineates circumstances that
permit a waiver of the balanced budget 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. The
waiver based on an ``imminent and serious military threat to
national security'' is more likely to be utilized. Under the
language of Section 6, Congress may declare such a threat by
enacting a joint resolution, supported by a majority of each
House's total membership and signed into law by the President.
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.
Section 7. This section provides for Congress to ``enforce
and implement this article by appropriate legislation.'' This
mandate for continued congressional involvement recognizes that
the broad language of the constitutional amendment cannot be
effectuated without an active congressional role in delineating
the details of implementation.
Section 8. This section defines ``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 repayment of principal on the Federal
debt are embraced by the term ``total outlays.''
Section 9. This section delineates the effective date of
the constitutional amendment. It will take effect at the
beginning of the first fiscal year after December 31, 2016, or
on 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 7 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 7-year deadline will
expire in the year 2018 and the amendment will take effect--if
at all--not later than the beginning of fiscal year 2021.
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
disruption. Although substantial spending cuts will require
many adjustments, the implementation date provided for in
section 9 is sufficiently long to facilitate an orderly
transition.

Dissenting Views

I. INTRODUCTION

The Balanced Budget Amendment to the U.S. Constitution (BBA
or Amendment) ostensibly mandates a balanced budget in each
fiscal year beginning as soon as 2018. In reality, however,
this Amendment does a great deal more, much of which is
inimical to the fundamental tenets of a republican form of
government. It may, in fact, actually undermine the goal of a
balanced budget. The BBA threatens the survival of such
critical programs as Social Security and Medicare, which serve
as fundamental safety nets for millions of hardworking
Americans. It undermines other important priorities including
national security, veterans' health care, aid to education and
the poor, support for family farmers, a vital national
infrastructure, and all manner of government functions that are
necessary to the needs of a western industrialized democracy.
The Amendment skews all future budget debates in favor of deep
spending cuts while virtually taking any additional revenues,
or tax reforms, off the table. Its shortsighted restrictions
threaten the standing of the dollar as a stable, reliable
global reserve currency by undermining confidence in the full
faith and credit of the United States in a manner unprecedented
in the Nation's history.
And, the BBA could hobble the ability of the Federal
Government to promote growth during economic downturns and to
invest in future needs, thereby threatening to condemn America
to permanent status as a second rate economy.
The BBA is opposed by numerous organizations committed to
the economic well being of the United States as well as
organizations concerned with the needs of the elderly, the
middle class, our children, and other basic needs of national
importance. These groups include a coalition of 123 religious,
labor, education, civil rights, child advocacy, and other
organizations;\1\ a coalition of six national environmental
organizations representing more than one million members and
activists;\2\ OMB Watch;\3\ AFL-CIO;\4\ Service Employees
International Union;\5\ the American Federation of State,
County, and Municipal Employees;\6\ the National Education
Association;\7\ the National Women's Law Center;\8\ Committee
for Education Funding;\9\ and the Coalition on Human Needs.\10\
---------------------------------------------------------------------------
\1\Letter from 9to5 National Association of Working Women, AFL-CIO;
All Education Matters; Alliance for Retired Americans; American
Association of People with Disabilities; American Association of
University Women; American Federation of Government Employees; American
Federation of State, County, and Municipal Employees; American
Federation of Teachers; American Network of Community Options and
Resources; The Arc of the United States; Asian American Justice Center;
Association of Women's Health, Obstetric and Neonatal Nurses; Bazelon
Center for Mental Health Law; Campaign for America's Future; Campaign
for Community Change; CenterLink: The Community of LGBT Centers;
Central Conference of American Rabbis; Corporation for Enterprise
Development; Children Now; Children's Defense Fund; Cities for
Progress, Institute for Policy Studies; the City Project, CLASP;
Coalition on Human Needs; Commission on Social Action of Reform
Judaism; Committee for Education Funding; Communications Workers of
America; Community Action Partnership; Demos; Direct Care Alliance;
Disability Rights and Education and Defense Fund; Easter Seals; Equal
Justice Society; Families USA, Family Equality Council; Farmworker
Justice; Food Research and Action Center; Friends of the Earth; Gay,
Lesbian and Straight Education Network; Health & Disability Advocates;
Health Care for America Now; International Union, United Automobile,
Aerospace and Agricultural Implement Workers of America (UAW); Japanese
American Citizens League; Jewish Funds for Justice; Jewish Labor
Committee; Latinos for a Secure Retirement; Lawyers' Committee for
Civil Rights Under Law; Leadership Conference on Civil and Human
Rights; League of Women Voters of the U.S.; Legal Momentum; Mental
Health America; Minority Business Enterprise Legal Defense and
Education Fund; NAACP; NAACP Legal Defense and Educational Fund;
National Advocacy Center of the Sisters of the Good Shepherd; National
African American Drug Policy Coalition; National AIDS Housing
Coalition; National Alliance on Mental Illness; National Asian Pacific
American Women's Forum; National Association for Children's Behavioral
Health; National Association for Hispanic Elderly; National Association
of Colored Women's Clubs; National Assocation of Human Rights Workers;
National Association of Social Workers; National Center for Lesbian
Rights; National Center for Transgeder Equality; National Coalition for
Asian Pacific Americans Community Development; National/Community
Reinvestment Coalition; National Congress of American Indians; National
Congress of Black Women; National Council of Jewish Women; National
Council on Independent Living; National Disability Rights Network;
National Education Association; National Employment Law Project;
National Fair Housing Alliance; National Focus on Gender Education;
National Gay and Lesbian Task Force Action Fund; National Health Law
Program; National Immigrration Law Center; National Korean American
Service & Education Consortium; National Latina Institutue for
Reproductive Health; National Legal Aid & Defender Association;
National Low Income Housing Coalition; National Organization for Women;
National Partnership for Women & Families; National Priorities Project;
National Senior Citizens Law Center; National Skills Coalition;
National Urban League; National Women's Law Center; NETWOR, A National
Catholic Social Justice Lobby; Not Dead Yet; Office of Gender and
Racial Justice, RE&WM, GAMC, Presbyterian Church (USA); OMB Watch;
Paralyzed Veterans of America; PHI--Quality Care Through Quality Jobs;
Physicians for Social Responsibility; PolicyLink; Poverty & Race
Research Action Council; ProgressNow; Racial and Ethnic Health
Disparities Coalition; RESULTS: The Power to End Poverty; SER--Jobs for
Progress National; Service Employees International Union; Sexuality
Information and Education Council of the U.S.; Sisters of Mercey
Institute Justice Team; Social Security Works; South Asian Americans
Leading Together; Southeast Asia Resource Action Center; Southern
Poverty Law Center; Unitarian Universalist Association of
Congregations; United Church of Christ, Justice and Witness Ministries;
United Food and Commercial Workers International Union; United for a
Fair Economy; United States Student Association; United Steelworkers;
U.S. Psychiatric Rehabilitation Association; USAction; Voices for
Progress; Wider Opportunities for Women; Women's Missionary Society of
the African Methodist Episcopal Church to Members of the House
Judiciary Committee (June 1, 2011) (on file with the Subcommittee on
the Constitution).
\2\Letter from Defenders of Wildlife, Friends of the Earth;
National Resources Defense Council, Population Action International,
Public Citizen, Wilderness Society, Voices for Progress to House
Judiciary Committee Chairman Lamar Smith and Ranking Member John
Conyers, Jr. (June 15, 2011) (on file with the Subcommittee on the
Constitution).
\3\Letter from Craig Jennings, Director, Federal Fiscal Policy, OMB
Watch, to House Judiciary Committee Chairman Lamar Smith and Ranking
Member John Conyers, Jr. (June 1, 2011) (on file with the Subcommittee
on the Constitution).
\4\Letter from William Samuel, Director, Government Affairs
Department, AFL-CIO, to House Judiciary Committee Chairman Lamar Smith
and Ranking Member John Conyers, Jr. (June 2, 2011) (on file with the
Subcommittee on the Constitution).
\5\Letter from Michelle Nawar, Director of Legislation, Service
Employees International Union, to House Judiciary Committee Chairman
Lamar Smith and Ranking Member John Conyers, Jr. (June 3, 2011) (on
file with the Subcommittee on the Constitution).
\6\Letter from Charles M. Loveless, Director of Legislation,
AFSCME, to Members of the U.S. House of Representative (June 1, 2011)
(on file with the Subcommittee on the Constitution).
\7\Letter from Kim Anderson, Director of Government Relations, and
Mary Kusler, Manager of Federal Advocacy, National Education
Association, to Members of the U.S. House of Representatives (June 2,
2011) (on file with the Subcommittee on the Constitution).
\8\Letter from Nancy Duff Campbell, Co-President, and Joan
Entmacher, Vice President for Family Economic Security, National
Women's Law Center, to House Judiciary Committee Chairman Lamar Smith
and Ranking Member John Conyers, Jr. (June 1, 2011) (on file with the
Subcommittee on the Constitution).
\9\Letter from Abigail Evans, President, and Joel Packer, Executive
Director, Committee for Education Funding, to Members of the House
Judiciary Committee (June 14, 2011) (on file with the Subcommittee on
the Constitution).
\10\Letter from Deborah Weinstein, Executive Director, Coalition on
Human Needs, to House Judiciary Committee Chairman Lamar Smith and
Ranking Member John Conyers, Jr. (June 3, 2011) (on file with the
Subcommittee on the Constitution).
---------------------------------------------------------------------------
For these reasons, and those discussed below, we
respectfully dissent and urge our colleagues to reject this
dangerous and destructive constitutional amendment.

II. THERE IS NO NEED FOR A CONSTITUTIONAL AMENDMENT TO BALANCE THE
BUDGET

During the 1990's, Congress was able to eliminate the
deficit and run surpluses without the aid of a balanced budget
amendment. It took the reckless fiscal policies of President
George W. Bush and a Republican Congress to turn that record
surplus into record deficits in record time. That
``accomplishment'' is not evidence that our Constitution is in
need of amendment. Rather, it demonstrates the result of
disastrous choices made by those in power. The record calls not
for a constitutional amendment, but for greater political
courage, accountability, prudence, foresight, and restraint by
our elected officials, including some of those who now support
this Amendment.
While waging war on two fronts, the Bush Administration
championed tax cuts for the wealthy and increases in defense
spending as well as new expenditures for such salutary programs
as Medicare Part D. These were among the significant
contributors to the resulting deficit in the Federal budget. In
particular, tax cuts in 2001 and 2003 caused revenue to fall as
of 2004 by more than 4 percentage points of GDP. At the same
time, Federal spending rose from 18.2 percent of GDP in 2000 to
19.6 percent of GDP in 2007, all while the economy was showing
signs of weakness, leading to its near collapse just a year
later.\11\
---------------------------------------------------------------------------
\11\Mindy R. Levit, The Federal Debt: An Analysis of Movements from
World War II to the Present, Congressional Research Service,
Congressional Research Service Report RL34712 (Sept. 17, 2010).
---------------------------------------------------------------------------
From 2001 to 2010, the Bush Administration's tax cuts added
$2.6 trillion to the public debt,\12\ nearly fifty percent of
the total debt accrued during this period.\13\ Congressional
Budget Office (CBO) and Joint Committee on Taxation (JCT)
projections estimate that maintaining the tax cuts of 2001 and
2003 (which were to sunset in 2010) for the wealthiest 2
percent of Americans will reduce revenues by about $690 billion
over the next 10 years.\14\ When the interest payments are
factored in to these numbers, the true price of maintaining the
tax cuts for the wealthy jumps by almost $140 billion.\15\ In
total, keeping the cuts for the richest 2 percent of Americans
will cost almost $830 billion over the next 10 years.\16\
---------------------------------------------------------------------------
\12\James Horney & Kathy Ruffing, Economic Downturn and Bush
Policies Continue to Drive Large Projected Deficits, Center on Budget
and Policy Priorities, (May 10, 2011), available at http://
www.cbpp.org/cms/index.cfm?fa=view&id=3490.
\13\OMB, Historical Tables: Table 7.1--Federal Debt at the End of
the Year: 1940-2016, (2011), available at http://www.whitehouse.gov/
sites/default/files/omb/budget/fy2012/assets/hist07zl1.xls (last
visited June 20, 2011).
\14\In a January 2010 report, ``The Budget and Economic Outlook:
Fiscal Years 2010 to 2020,'' the CBO projects that a full extension of
Pres. Bush's tax cuts, plus a permanent fix to the alternative minimum
tax, will cost $3.7 trillion over 10 years, not including debt service
costs. The JCT estimated in a March 2010 report, ``Present Law and The
President's Fiscal Year 2011 Budget Proposals Related to Selected
Individual Income Tax Provisions Scheduled to Expire Under the Sunset
Provisions of the Economic Growth and Tax Relief Reconciliation Act of
2001,'' that the cost of extending just those cuts that affect people
making less than $250,000 and permanently fixing the alternative
minimum tax will cost $3 trillion. The difference--a bit less than $700
billion--is the cost of extending just those cuts for the wealthiest.
See Michael Linden & Michael Ettlinger, Three Good Reasons to Let the
High-End Bush Tax Cuts Disappear This Year, (July, 29, 2010) available
at http://www.americanprogress.org/issues/2010/07/let_cuts_expire.html.
\15\The interest rates implied in the CBO's baseline budget
projection used in the March 2010 report entitled, ``An Analysis of the
President's Budgetary Proposals for Fiscal Year 2011,'' were used to
calculate the additional debt service cost. Id.
\16\Id.
---------------------------------------------------------------------------
While revenues were decreasing as a result of the Bush tax
cuts, defense spending jumped dramatically to fund both the
Iraq and Afghanistan Wars. There were also substantial spending
increases for enhanced security measures necessitated by the
Global War on Terror, including the creation of the Department
of Homeland Security. During the 7 years President Bush was in
office after the terrorist attacks of September 11, 2001,
nearly $800 billion was spent on these two wars and enhanced
security measures.\17\
---------------------------------------------------------------------------
\17\Amy Belasco, The Cost of Iraq, Afghanistan, and Other Global
War on Terror Operations Since 9/11, Congressional Research Service
Report RL33110, at 3 Table 1: Estimated War Funding by Operations:
FY2001-FY2012 War Request (Mar. 29, 2011).
---------------------------------------------------------------------------
Among the Bush Administration's other initiatives was the
creation of Medicare Part D in 2003. This worthwhile program,
unfortunately, was unfunded. Its cost has been estimated by the
Congressional Budget Office at $395 billion over its first 10
years.\18\
---------------------------------------------------------------------------
\18\Marc Labonte & Margot L. Crandall-Hollick, The Impact of Major
Legislation on Budget Deficits: 2001 to 2010, CRS Report R41134 (May
20, 2011).
---------------------------------------------------------------------------

III. THE BALANCED BUDGET AMENDMENT IS ANTI-DEMOCRATIC

Apart from its economic weaknesses, the proposed BBA
undercuts the very principle upon which our Nation was founded,
namely, majority rule. By requiring a supermajority to pass
certain legislation, the Amendment would shift power away from
the majority of the American people to a determined minority.
The framers of the Constitution wisely rejected the
principle of requiring a supermajority for basic government
functions.\19\ James Madison vehemently argued against
supermajorities. He stated:
---------------------------------------------------------------------------
\19\It is significant to note that, because of population patterns,
Senators representing some 7.5 percent of the population could prevent
a bill from obtaining a two-thirds majority. U.S. Census Bureau,
available at http://2010.census.gov/2010census/data/apportionment-pop-
text.php (last visited June 20, 2011).

That some advantages might have resulted from such a
precaution cannot be denied. It might have been an
additional shield to some particular interests, and
another obstacle generally to hasty and partial
measures. But these considerations are outweighed by
the inconveniences in the opposite scale. 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 be no longer the majority that would
rule: the power would be transferred to the minority.
Were the defensive privilege limited to particular
cases, an interested minority might take advantage of
it to screen themselves from equitable sacrifices to
the general weal, or, in particular emergencies to
extort unreasonable indulgences.\20\
---------------------------------------------------------------------------
\20\The Federalist No. 58, at 361 (James Madison).

At a Constitution Subcommittee hearing during the 104th
Congress, Rep. Henry J. Hyde (R-IL), then-Chair of the House
---------------------------------------------------------------------------
Committee on the Judiciary, echoed similar concerns:

I am troubled by the concept of divesting a Member of
the full import of his or her vote. You are diluting
the vote of Members by requiring a supermajority of
them to do something as basic to government as acquire
the revenue to run government. It is a diminution. It
is a disparagement. It is a reduction of the impact,
the import, of one man, one vote.\21\
---------------------------------------------------------------------------
\21\Proposing An Amendment to the Constitution of the United States
to Require Two-Thirds Majorities for Bills Increasing Taxes: Hearing on
H.J. Res. 159, Before the Subcomm. on the Constitution of the House
Comm. on the Judiciary, 104th Cong., 2d Sess. 107 (1996).

Supporters of the BBA have sought to justify the departure
from majority rule by pointing to other provisions in the
Constitution that require a two-thirds vote, such as approving
a treaty or obtaining a conviction in a congressional
impeachment trial.\22\ This argument, however, overlooks the
fact that not one of these supermajority requirements pertain
to the day-to-day operations of the government. Limiting such
congressional authority is an invitation to gridlock.
---------------------------------------------------------------------------
\22\There are 9 matters for which a supermajority vote is required
under the Constitution: art. I, Sec. 3, cl. 6 (conviction in
impeachment trials); art. I, Sec. 5, cl. 2 (expulsion of a Member of
Congress); art. 1, Sec. 7, cl. 2 (override a Presidential veto); art.
II, Sec. 1, cl. 3 (quorum shall consist of one or more members from
two-thirds of the States to elect the President); art. II, Sec. 2, cl.
2 (consent to a treaty); art. V (proposing amendments to the
Constitution); amend. XII (quorum of members representing two-thirds of
the States to elect the President and the Vice President); amend. XIV,
Sec. 3 (to remove disability); and amend. XXV, Sec. 4 (removal of
President for disability).
---------------------------------------------------------------------------
Rep. Melvin L. Watt (D-NC) offered an amendment that would
have struck the supermajority requirements to increase revenues
and to raise the debt limit. The amendment was rejected on a
party line vote.\23\
---------------------------------------------------------------------------
\23\Unofficial Tr. of Markup of H.J. Res. 1, Proposing a Balanced
Budget Amendment to the Constitution of the United States, Before the
H. Comm. on the Judiciary, 112th Cong. at 6-39 (June 3, 2011).
---------------------------------------------------------------------------
The BBA would also open the possibility of life-tenured
Federal judges making decisions on taxing and spending policy
instead of directly-elected and accountable Members of Congress
and the President. This concern has long-dogged proposals that
would place budgetary decisions in the Constitution, but which
has consistently been dismissed by proponents as not worthy of
consideration. For example, when the BBA was being considered
by Congress in 1990, former U.S. Court of Appeals Judge Robert
Bork issued the following warning:

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 5 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 5 years
earlier.\24\
---------------------------------------------------------------------------
\24\Letter from Robert H. Bork to Thomas S. Foley, Speaker of the
House, (July 10, 1990), reprinted in Op. Ed., Robert H. Bork, A
Seasoned Argument, Wash. Post, at A23 (June 10, 1992).

The BBA clearly presents the possibility that courts would be
asked to determine whether legislation did in fact increase
revenues, whether outlays did in fact exceed receipts, and any
number of other complex budgetary issues that would acquire a
constitutional dimension. It also begs the question whether a
court, in crafting a remedy for a violation, could order cuts
to spending or increases in taxes in order to meet the
requirements of the BBA.

IV. THE AMENDMENT IS NOT LIMITED TO A BALANCED BUDGET REQUIREMENT

While the BBA purports to require a balanced budget and to
provide the tools necessary to facilitate and enforce that
requirement, several provisions are either unrelated to that
goal, or would make a balanced budget more difficult to attain.
A. Supermajority Requirements Will Promote Greater Deficits.
While the ostensible purpose of the supermajority
requirements in the Amendment are intended to make it more
difficult for Congress to exceed the balanced budget
requirement, as Rep. Robert C. ``Bobby'' Scott (D-VA) argues,
the need to obtain a three-fifths vote to run a deficit may
require a great deal more legislative ``horse-trading'' in
order to secure the necessary number of votes.\25\ We have all
been involved in the legislative process generally, and the
budgetary process in particular, long enough to have witnessed
the extent to which legislative leaders have had to accede to
individual members' demands for specific pork-barrel projects,
in order to gather the needed votes to pass legislation,
raising the overall cost.
---------------------------------------------------------------------------
\25\During the markup of H.J. Res. 1, Rep. Scott made the following
remarks:

The fact of the matter is the core provision of this
underlying constitutional amendment will make it impossible
to ever balance the budget from a practical point of view.
If you need 60 percent to pass the budget--and you are
going to need 60 percent. Any budget on the table requires
60 percent. Now, are you more likely to pass the Republican
Study Group and explain to your constituents 70 percent
cuts or, since you need 60 percent anyway, are you more
likely to have more tax cuts and more spending increases?
When you get to the last couple of votes to pass a tough
bill like a tough budget, the last couple of votes you pick
up are not--and I am not going to vote for it unless you
increase some more taxes or unless you do some more
spending cuts. The last few votes are bought with spending
increases and tax cuts. And so the core provision of the
bill will make it less likely that we can achieve the goals
---------------------------------------------------------------------------
that my colleagues from Virginia have spoken of.

Unofficial Tr. of Markup of H.J. Res. 1, Proposing a Balanced Budget
Amendment to the Constitution of the United States, Before the H. Comm.
on the Judiciary, 112th Cong. at 53 (June 2, 2011) (statement of Rep.
Robert C. ``Bobby'' Scott (D-VA)).
The need to obtain supermajorities--especially in times of
economic distress when revenues decline, demands for government
services increase, and deficits grow--would likely increase the
power of individual holdouts, resulting in increased, rather
than decreased spending. Thus, the multiple supermajority
requirements in the Amendment would have the tendency to
increase, rather than decrease the deficit.
B. Tax Limitation Amendment Would Promote Deficits
Section 5 of the BBA provides that a ``bill to increase
revenue shall not become law unless three-fifths of the whole
number of each House shall provide by law for such an increase
by a roll-call vote.'' An amendment offered by Rep. Jim Jordan
(R-OH) and passed by the Committee further exacerbated this
requirement by raising the threshold to two-thirds.\26\ It
should be noted, however that during past Republican-controlled
Congresses, beginning with the Republican ``Contract with
America,'' a separate tax limitation constitutional amendment
was routinely considered, and just as routinely rejected.\27\
---------------------------------------------------------------------------
\26\Unofficial Tr. of Markup of H.J. Res. 1, Proposing a Balanced
Budget Amendment to the Constitution of the United States, Before the
H. Comm. on the Judiciary, 112th Cong. at 157-67 (June 3, 2011).
\27\In 2001, a similar measure, H.J.Res. 41, failed by a vote of
232-189. 147 Cong. Rec. H1582 (daily ed. Apr. 25, 2001) (Roll no. 87).
Its predecessor, H.J. Res. 94, was taken straight to the floor and
failed by a vote of 234-192 in 2000. 146 Cong. Rec. H2146 (daily ed.
Apr. 12, 2000) (Roll no. 119). In 1999, H.J. Res. 37 was taken straight
to the floor and failed by a vote of 229-199. 145 Cong. Rec. H2097
(daily ed. Apr. 15, 1999) (Roll no. 90). In 1998, H.J. Res. 111 was
taken straight to the floor and failed by a vote of 238-186. 144 Cong.
Rec. H2170 (daily ed. Apr. 22, 1998) (Roll no. 102). In 1997, H.J. Res.
62 passed the Committee by a vote of 18-10, but failed in the full
House by a vote of 233-190. 143 Cong. Rec. H1506 (daily ed. Apr. 15,
1997) (Roll no. 78). In 1996, H.J. Res. 159 was taken straight to the
floor and failed by a vote of 243-177. 142 Cong. Rec. H3304 (daily ed.
Apr. 15, 1996) (Roll no. 117).
---------------------------------------------------------------------------
Adopting a supermajority tax requirement would repeat the
very mistakes made in the 1780's under the Articles of
Confederation, which required a vote of nine of the 13 States
to raise revenue. It is because this system worked so poorly
that the founding fathers sought to fashion a national
government that could operate through majority rule.\28\
---------------------------------------------------------------------------
\28\Proposing An Amendment to the Constitution with Respect to Tax
Limitations on H. J. Res. 62, Before the Subcomm. on the Constitution
of the H. Comm. on the Judiciary, 105th Cong. 1st Sess. (1997)
[hereinafter 1997 Judiciary Committee Hearing] (statement of Robert
Greenstein, Executive Director, Center on Budget and Policy
Priorities).
---------------------------------------------------------------------------
While some may believe that a tax limitation is a desirable
policy, this requirement will make it more difficult to balance
the budget by making increased revenues difficult, if not
impossible, to obtain. Although the imposition of new taxes or
increased taxes may be a policy some would prefer to reject, it
is by no means the case that the Constitution should place the
option beyond reach for all time.
In addition, the language of the BBA is not clear and could
present difficult implementation problems, possibly placing tax
policy, in the final analysis, in the hands of Federal judges.
For example, it is unclear from the text what a ``bill to
increase revenue'' would include. While it would likely apply
to a new tax or an increase in a tax rate, it could also
include a repeal of a special interest tax loophole. As a
result, the BBA could allow a special interest tax loophole,
even one that was the result of clear corruption, to pass by a
simple majority, or even a voice vote, but would impose a
constitutional requirement of a two-thirds roll call vote of
each house to repeal it. The BBA would essentially enshrine in
the Constitution some of the most unfair and--in some
circumstances--corrupt features of our tax code and thereby
undermine the widely accepted goal of removing such special
interest provisions from law and simplifying compliance.
As the National Commission on Fiscal Responsibility and
Reform recently observed:

In the quarter century since the last comprehensive tax
reform, Washington has riddled the system with
countless tax expenditures, which are simply sending by
another name. These tax earmarks--amounting to $1.1
trillion a year of spending in the tax code--not only
increase the deficit, but cause tax rates to be too
high. Instead of promoting economic growth and
competitiveness, our current code drives up health care
costs and provided special treatment to special
interests. The code presents individuals and businesses
with perverse economic incentives instead of a level
playing field.\29\
---------------------------------------------------------------------------
\29\National Commission on Fiscal Responsibility and Reform, The
Moment of Truth, at 28 (Dec. 2010) (emphasis in original).

Rep. Scott offered an amendment to strike this section.\30\
Rep. Jerrold Nadler (D-NY) offered an amendment that would
allow special interest tax breaks for large producers of oil or
natural gas to be repealed by a simple majority vote.\31\ Both
amendments were rejected on a party line vote.
---------------------------------------------------------------------------
\30\Unofficial Tr. of Markup of H.J. Res. 1, Proposing a Balanced
Budget Amendment to the Constitution of the United States, Before the
H. Comm. on the Judiciary, 112th Cong. at 77-109; 39-49 (June 3, 2011).
\31\Id. at 39-49.
---------------------------------------------------------------------------
The BBA presents various questions of interpretation. Would
the Amendment's restriction apply to a 1, 5, or 10-year budget
window? Would a bill resulting in increased revenues in years 1
and 2, but lower revenues thereafter require a two-thirds vote?
The Amendment is also silent on when the revenue impact would
be assessed. Would it, as provided in section 7, rely solely on
estimates of outlays and receipts, or would an error in an
estimate of the impact of the tax measure that in fact resulted
in an increase in revenues require a retroactive change--and
court ordered refunds--based on actual receipts? If this is not
the case, could estimates be used to circumvent the two-thirds
requirement? If an adjustment and tax refund were necessary,
would the loss in revenues and existing assets trigger the
other requirements of the Amendment, necessitating either
offsetting budget cuts or a three-fifths vote to permit the
resulting imbalance?
C. A Cap on Outlays Is a New and Dangerous Innovation
The BBA includes a provision that would cap total Federal
outlays at 18 percent of ``economic output of the United
States, unless two-thirds of each House of Congress shall
provide for a specific increase of outlays above this
amount.''\32\ We assume that by ``economic output of the United
States'' the resolution's authors mean ``gross domestic
product,'' which is defined as the ``market value of goods and
services produced by labor and property in the United States,
regardless of nationality.''\33\
---------------------------------------------------------------------------
\32\H.J.Res 1, 112th Cong. Sec. 2 (2011). The bill, as introduced
capped outlays at ``one-fifth.'' An amendment offered by Rep. Louie
Gohmert (R-TX) changed this to 18 percent.
\33\Bureau of Economic Analysis, U.S. Department of Commerce,
Glossary, available at http://www.bea.gov/glossary/glossary_g.htm (Last
visited: June 20, 2011).
---------------------------------------------------------------------------
This cap, however, appears to be arbitrary. No arguments
supporting the idea that 18 percent is an economically ideal
rate have been put forward any more than for the 20 percent cap
in the bill as introduced, or the 19 percent cap in an
amendment filed by Rep. Louie Gohmert (R-TX), but not
considered by the Committee. The sole argument was to appeal to
historical experience which by no means supports the 18 percent
figure. It is, as with other parts of the BBA, merely a policy
preference posing as a constitutional principle. In reality,
the historical record indicates that outlays, as a percentage
of GDP, have varied significantly.
Federal outlays have not dropped below 18 percent since FY
1967, and have not dropped below 17 percent since FY 1957.\34\
According to the Congressional Budget Office:
---------------------------------------------------------------------------
\34\Office of Management and Budget, Table 15.3 Total Government
Expenditures as Percentages of GDP: 1948-2010, at 344-5, Fiscal Year
2012 Historical Tables Budget of the United States (2010).

Spending by the Federal Government grew from
approximately 3 percent of GDP in 1925 to 15.6 percent
in 1950. Following the Depression, World War II
abruptly boosted Federal spending to approximately 42
percent of GDP, but afterward it dropped and resumed a
less volatile trend.''\35\
---------------------------------------------------------------------------
\35\Congressional Budget Office, A 125-Year Picture of the Federal
Government's Share of the Economy, 1950-2075, at 2 (July 3, 2002).
---------------------------------------------------------------------------
D. BBA's Debt Ceiling Is Arbitrary
The Amendment would impose a three-fifths vote requirement
in order to increase the debt ceiling.\36\ Recent experience
demonstrates, however, that even obtaining a simple majority
vote can be elusive.\37\ The current budgetary deadlock has
placed the creditworthiness of the United States in question
for the first time since the adoption of the 14th Amendment to
the Constitution.\38\
---------------------------------------------------------------------------
\36\H.J. Res. 1, 112th Cong. Sec. 3 (2011).
\37\See, e.g., 157 Cong. Rec. H 3783 (daily ed. May 31, 2011) (vote
on A Bill to Implement the President's Request to Increase the
Statutory Limit on the Public Debt, H.R. 1954, 112th Cong. (2011)).
\38\Section 4 of the 14th Amendment states, ``The validity of the
public debt of the United States, authorized by law, including debts
incurred for payment of pensions and bounties for services in
suppressing insurrection or rebellion, shall not be questioned. But
neither the United States nor any State shall assume or pay any debt or
obligation incurred in aid of insurrection or rebellion against the
United States, or any claim for the loss or emancipation of any slave;
but all such debts, obligations and claims shall be held illegal and
void.'' Although section 4 ``was undoubtedly inspired by the desire to
put beyond question the obligations of the Government issued during the
Civil War, its language indicates a broader connotation. . . . `[T]he
validity of the public debt'. . . [embraces] whatever concerns the
integrity of the public obligations,'' and applies to government bonds
issued after as well as before adoption of the Amendment. Perry v.
United States, 294 U.S. 330, 354 (1935). In Perry, the Court concluded
that the Joint Resolution of June 5, 1933, insofar as it attempted to
override the gold-clause obligation in a Fourth Liberty Loan Gold Bond
``went beyond the congressional power.'' Id. On a Confederate bond
problem, see Branch v. Haas, 16 F. 53 (C.C.M.D. Ala. 1883) (citing
Hanauer v. Woodruff, 82 U.S. (15 Wall.) 439 (1873), and Thorington v.
Smith, 75 U.S. (8 Wall.) 1 (1869)); see also The Pietro Campanella, 73
F. Supp. 18 (D. Md. 1947).
---------------------------------------------------------------------------
The consequences of a default by the United States on its
obligations, or even the growing concern in the world markets
about the risk of such a default, could be catastrophic.
Recently, Moody's Investors Service warned that it might soon
downgrade the credit rating of the United States because of
mounting concerns that the government will default on its
obligations.\39\ Moody's stated, ``The heightened polarization
over the debt limit has increased the odds of a short-lived
default.''\40\ In April, Standard & Poor's, citing continued
gridlock in budget negotiations, lowered its outlook on the
Federal debt position from ``stable'' to ``negative.''\41\
Similarly, Fitch Ratings warned of a downgrading of our
national debt obligations in the event of a technical
default.\42\
---------------------------------------------------------------------------
\39\Zachary A. Goldfarb & Felicia Sonmez, Moody's Warns of
Downgrade, Wall St. J. (June 3, 2011), at A11.
\40\Id.
\41\Clifford Marks & Humberto Sanchez, S&P Lowers U.S. Debt Outlook
from `Stable' to `Negative'--Ratings Agency Reaffirms `AAA' Rating, but
Worries Policymakers Will Fail to Agree on Deficit Reduction, National
Journal.com (Apr. 19, 2011), available at http://nationaljournal.com/
economy/s-amp-p-lowers-u-s-debt-outlook-from-stable-to-negative-
20110418.
\42\Peter Schroeder, Fitch Warns US Would eEdanger AAA Rating With
Even `Technical' Default, The Hill (June 8, 2011), available at http://
thehill.com/blogs/on-the-money/budget/165365-fitch-warns-against-
default-of-any-length.
---------------------------------------------------------------------------
Regrettably, Republican leaders seem to be unaware of, or
indifferent to, the dangers of this brinkmanship over the debt
ceiling. Republican Budget Committee Chairman Paul Ryan appears
not to grasp the gravity of the situation. For example, he
recently opined, ``If a bondholder misses a payment for a day
or two or three or four--what is more important is you are
putting the government in a materially better position to
better pay its bills going forward.''\43\ This is precisely the
``technical default'' about which Fitch has recently warned.
When an individual goes into technical default, as described by
Rep. Ryan, he or she pays substantial penalties in the form of
penalties and in ballooning interest rates. The same fate does
befall nations, and the consequences are uniformly
catastrophic.
---------------------------------------------------------------------------
\43\Amy Scott, Some Republicans OK with short-lived debt default,
Marketplace Morning Report (June 8, 2011), available at http://
marketplace.publicradio.org/display/web/2011/06/08/am-some-republicans-
ok-with-shortlived-debt-default/?refid=0.
---------------------------------------------------------------------------
The debt, while a substantial problem, is not the cause of
our current precarious position in the eyes of the bond market.
As Bloomberg News reports, ``For all the debate about the
deficit in Washington, bond market yields in the U.S. are lower
now than when the government was running a budget surplus a
decade ago, even though Treasury Department data show that the
amount of marketable debt outstanding has risen to $9.13
trillion from $4.34 trillion in mid-2007.''\44\
---------------------------------------------------------------------------
\44\David Lerman, Ryan, Geithner Offer Different Views on Agreement
to increase Debt Ceiling, Bloomberg News (Apr. 18,2011). http://
www.bloomberg.com/news/2011-04-17/ryan-geithner-offer-different-views-
of-agreement-to-increase-debt-ceiling.html.
---------------------------------------------------------------------------
E. The Amendment recognizes only military emergencies
Although there are many reasons why a nation might need to
run a deficit, section 6 of the BBA permits such to occur only
during ``any fiscal year in which the United States is engaged
in a military conflict which causes an imminent and serious
military threat to national security and is so declared by a
joint resolution, adopted by a majority of the whole number of
each House, which becomes law.''
Interestingly, while the BBA's waiver only applies if the
United States is at war, any military necessity that might
require a buildup in preparation for hostilities is not
recognized. It is also not clear whether the Global War on
Terror would be covered by the waiver. If the waiver does
apply, then--at least for the foreseeable future--it could be
argued that the United States will always be in a conflict
``which causes an imminent and serious military threat to the
national security,'' and therefore render this proposed
constitutional amendment a nullity. Rep. Sheila Jackson Lee (D-
TX) offered an amendment that would have clarified that the
exception applied to all military conflicts. The amendment was
rejected.\45\
---------------------------------------------------------------------------
\45\Unofficial Tr. of Markup of H.J. Res. 1, Proposing a Balanced
Budget Amendment to the Constitution of the United States, Before the
H. Comm. on the Judiciary, 112th Cong. at 125-138 (June 3, 2011).
---------------------------------------------------------------------------
There are, however, other types of emergencies in which
deficit spending may be needed. Periods of depression or
serious recession sometimes call for deficit spending. It would
be a mistake for the Constitution--as proposed to be amended by
the BBA--to prohibit, categorically, this type of stimulus
spending absent the concurrence of a supermajority.
For example, the CBO, in its most recent periodic report,
estimates that in the first quarter of calendar year 2011, the
American Recovery and Reinvestment Act of 2009 raised real GDP
by between 1.1 and 3.1 percent, lowered the unemployment rate
by between .06 and 1.8 percent, increased the number of people
employed by between 1.2 million and 3.3 million, and increased
the number of full time equivalent jobs by 1.6 million to 4.6
million compared with what would have occurred otherwise. CBO
estimates that the effects of ARRA on output peaked in the
first half of 2010 and have since diminished.\46\ Rep. Nadler
offered an amendment that would have allowed Congress, by a
majority vote of both Houses, to suspend the application of the
BBA if economic growth has been, or will be, negative for 2
consecutive quarters. While there is disagreement among members
of the Committee on the utility of deficit spending during a
recession or a depression, it is a matter of economic policy,
and the people's elected representatives, not the Constitution,
should make that judgment. The Nadler amendment was rejected on
a party line vote.\47\
---------------------------------------------------------------------------
\46\Congressional Budget Office, Estimated Impact of ARRA on
Employment and Economic Output from January 2011 through March 2011 at
3 (May 2011).
\47\Unofficial Tr. of Markup of H.J. Res. 1, Proposing a Balanced
Budget Amendment to the Constitution of the United States, Before the
H. Comm. on the Judiciary, 112th Cong. at 49-75 (June 3, 2011).
---------------------------------------------------------------------------

V. THE AMENDMENT WOULD DESTROY MEDICARE AND
SOCIAL SECURITY

The BBA requires a balanced budget by as soon as fiscal
year 2018. Given the current deficit, it is fair to ask how the
proponents foresee this objective being attained. Rep. Nadler
asked the sponsor, Rep. Bob Goodlatte (R-VA) that precise
question. And, Rep. Nadler pointed out that the recently passed
Republican Budget projected balance only by fiscal year 2040.
Rep. Goodlatte responded, ``I would direct to you the House
Republican Study Committee Budget which balances it in 9
years.''\48\
---------------------------------------------------------------------------
\48\Whether the Constitution Should be Amended to Address the
Federal Deficit?: Hearing Before the Subcomm. on the Constitution of
the H. Comm. on the Judiciary, 112th Cong. (2011) (statement of Rep.
Bob Goodlatte (R-VA)).
---------------------------------------------------------------------------
It should be noted that what the Republican Study Committee
(RSC) proposed in its budget was rejected by House. It is also
important to understand what the consequences of meeting this
deadline would be. Under the RSC plan, which would require the
Nation's budget to achieve balance in 2020, Federal
expenditures would be cut by more than $9 trillion over the
coming decade, compared with current amounts. And, it would cut
total non-defense discretionary programs by approximately 70
percent by 2021, and by more than $3 trillion over the next 10
years. It contains deeper Medicare cuts than the Ryan budget,
which recently passed the House. The RSC budget includes the
Ryan budget proposal to convert Medicare to vouchers and raise
its eligibility age from 65 to 67, but it raises the
eligibility age sooner than the Ryan budget would. It would
raise the Social Security retirement age to 70. In 2021,
Medicaid, the Supplemental Nutrition Assistance Program (SNAP,
formerly known as food stamps), and Supplemental Security
Income would be cut in half.\49\ Given the size of projected
shortfalls, and the proposed constitutional impediment to
increasing revenues, these cuts, or ones very much like them,
would be necessitated by the BBA.
---------------------------------------------------------------------------
\49\Robert Greenstein, James R. Horney & Kelsey Merrick, Balanced
Budget Amendment Would Require More Extreme Cuts than Ryan Plan: Chief
Sponsor Cites Republican Study Committee Budget, Which Would Cut $9
Trillion Over Next Decade, as Model, Center for Budget and Policy
Priorities (June 6, 2011), available at http://www.cbpp.org/files/6-6-
11bud.pdf (Last visited: June 21, 2011).
---------------------------------------------------------------------------
Ranking Member John Conyers, Jr. (D-MI), Rep. Ted Deutch
(D-FL), and Rep. Jackson Lee offered amendments that would have
protected Medicare and Social Security, by removing them from
the budget calculations. The amendments were rejected on party
line votes.\50\
---------------------------------------------------------------------------
\50\Unofficial Tr. of Markup of H.J. Res. 1, Proposing a Balanced
Budget Amendment to the Constitution of the United States, Before the
H. Comm. on the Judiciary, 112th Cong. at 36-79 (June 2, 2011); 138-157
(June 3, 2011); 41-51 (June 15, 2011).
---------------------------------------------------------------------------

VI. CONCLUSION

Never before, with the exception of the disastrous
experiment of Prohibition, has this Nation written specific
policy preferences into the Constitution.\51\ The Constitution
is a document intended to lay out policies to allow Americans
to express their preferences in a political system that
safeguards the rights of all, and to permit the popular will to
find expression in law. Amending the Constitution to settle
certain economic and policy questions for all time not only
violates the underlying purpose of that document, but risks
economic catastrophe and hardship for the middle class, the
poor, the very young, and the elderly. It would forever consign
the concept of one person one vote to the dustbin of history.
It would represent a catastrophic historic turning point for
this country, and we urge our colleagues to reject it.
---------------------------------------------------------------------------
\51\Justice Holmes, in his famous dissent, warned against using the
Constitution as a tool of economic policy. He wrote, ``The 14th
Amendment does not enact Mr. Herbert Spencer's Social Statistics.''
Lochner v. People of the State of New York, 198 U.S. 45, 75 (1905).

John Conyers, Jr.
Howard L. Berman.
Jerrold Nadler.
Robert C. ``Bobby'' Scott.
Sheila Jackson Lee.
Maxine Waters.
Steve Cohen.
Henry C. ``Hank'' Johnson, Jr.
Pedro R. Pierluisi.
Mike Quigley.
Judy Chu.
Ted Deutch.
Linda T. Sanchez.

Additional Dissenting Views

The discussion about this proposed amendment to the
Constitution has totally been about the title of the amendment
and not about its provisions. Incredibly, the provisions of
this amendment do not require a balanced budget and actually
will make it more difficult for future Congresses to balance
the budget.
Every budget considered by the House earlier this year, and
in fact nearly every budget over the last decade, was not
balanced in the first fiscal year. Each of these budgets would
have required a three-fifths majority to pass the House and the
Senate under the provisions of this amendment. Commonsense
would suggest that a meaningful deficit reduction plan would be
more difficult to pass with a supermajority rather than a
simple majority, and therefore the enactment of the Balanced
Budget Amendment would make it more difficult to the balance
budget. Other than the title, there is nothing in this
amendment which makes it more likely that Congress will pass a
fiscally responsible budget instead of a fiscally irresponsible
budget. In fact the supermajority requirement to raise revenues
will obviously make it more difficult to balance the budget.
The December 2010 extension of the Bush-era tax cuts added $800
billion to the deficit and easily passed both houses of
Congress. If this amendment had been in effect, its provisions
would not have prevented Congress from adding $800 billion to
our deficit, because tax cuts could be passed with a simple
majority.
Furthermore, a two-thirds requirement to pass a spending
plan over 18% of our nation's Gross Domestic Product (GDP)
would jeopardize Social Security and Medicare. Total outlays of
the federal government have not been below 18% of GDP since the
passage of Medicare. An 18% spending cap would put immediate
pressure on Congress to make significant cuts to Medicare and
Social Security. Under the provisions of the amendment,
Congress could drastically cut Medicare and Social Security by
a simple majority to meet the 18% of GDP threshold but in order
to save these important programs with either new taxes or
spending above 18% of GDP would require a two-thirds majority
in the House and the Senate.
In conclusion, we should be debating the provisions of the
amendment, not just the title. The amendment does not require a
balanced budget, and in fact will make it more difficult to
balance the budget. Furthermore, the amendment jeopardizes
Medicare and Social Security by allowing cuts in these programs
with a simple majority while requiring a supermajority to save
these programs with new taxes. Balancing the budget requires
tough choices; the Balanced Budget Amendment will make it less
likely that those tough choices will be made.

Robert C. ``Bobby'' Scott.