Like activist judges? Then you’ll love the balanced budget amendment.
One of the big unanswered questions about a balanced budget amendment to the Constitution — the new favorite policy of tea party types everywhere — is how it would even work in practice. Sure, the basics are easy to understand: Orrin Hatch and Mike Lee’s proposed amendment in the Senate, for instance, says that spending can’t exceed revenue for a given fiscal year, and spending can’t go above 18 percent of GDP, unless a two-thirds majority of the House and Senate approves. (There’s a war exception.) But how would this rule actually be enforced?
Lee’s bill, for one, would allow any member of Congress to file a lawsuit if a budget violates the Constitution. “The bar for a lawsuit would be pretty low,” explains Doug Kendall of the Constitutional Accountability Center. So take an easy case: Congress passes a budget that either runs a deficit or tries to hide the deficit through accounting tricks. Jim DeMint gets annoyed and files a lawsuit. The courts could order an injunction and block the spending bills — which could, in turn, shut down the government unless Congress scrambles to fix it. (And, given that the Congress needs a two-thirds majority to raise taxes or run a deficit, “scrambling” might be a tall order.)
But it doesn’t stop there. The court could also just step in and make decisions about what exactly to cut, in order to bring the budget in line with the Constitution. In Hatch and Lee’s proposal, the courts couldn’t order tax increases, but they could mandate specific cuts. “They’d have a lot of latitude,” says Kendall. “Do they start setting budgetary policy? Which wars we fight, which veterans we provide for, whether Grandma gets her Social Security benefits — these are the choices we’d be authorizing the court to make.” It seems preposterous, but nothing would bar Antonin Scalia and Ruth Bader Ginsburg from donning green eyeshades, breaking out their adding calculators and going through the budget line by line. If you love judicial activism, you’ll love this provision.
It doesn’t stop there, either. Say Congress does obey the new amendment and passes a balanced budget that relies on certain projections for revenue. Now say that midway through the fiscal year, there’s an economic downturn, tax receipts fall unexpectedly and unemployment benefits go up. Deficit! What then? Congress would have to pass immediate (and likely steep) cuts and/or tax hikes. Otherwise, the courts step in. Another problem: Congress, remember, passes appropriations bills in chunks. What if, say, the defense spending bill is the last one passed and is the thing that nudges federal spending over the 18 percent mark? “Do they then strike down the defense bill?” Kendall asks. “Or do they go strike down something else? How do they make that choice?”
And it’s no use pretending that these decisions would be made swiftly — especially because, as Lee’s spokesman has conceded, the amendment doesn’t bar citizen suits. As Robert Bork (yep, that Robert Bork) wrote way back in 1984, this could create a nightmare scenario: “The result … would likely be hundreds, if not thousands, of lawsuits around the country, many of them on inconsistent theories and providing inconsistent results. By the time the Supreme Court straightened the whole matter out, the budget in question would be at least four years out of date and lawsuits involving the next three fiscal years would be slowly climbing toward the Supreme Court.”
“But wait,” you say. “Don’t most states have balanced budget requirements? Why don’t they don’t ever run into this absurd situation?” Luckily, the Center on Budget and Policy Priorities took a detailed look at this question years ago. The short answer is that state laws aren’t nearly as strict as a federal balanced budget amendment would be (states can borrow money for their capital budgets, which is used for infrastructure spending, and many states actually do run short-term deficits in their operating budgets throughout the year). No state has to deal with anything like what Republicans are proposing. We’d be in truly uncharted territory.