There is a powerful train roaring down the track, gathering momentum every day. It's called a Constitutional Amendment to Balance the Budget. Many congressmen are concluding that the better part of wisdom is to jump aboard rather than get rolled over by such trifling considerations as "will it work?"
Back in 1975, some prescient taxpayers became convinced that Congress as an institution lacked the will to say "no" to more and more federal spending (after all, how else does a politician demonstrate sensitivity and compassion?) and that only the mandate of a constitutional amendment could achieve a balanced federal budget.
Since Congress, dominated by political survivors, shows little zeal to inhibit its power of the purse, these taxpayers began a drive to obtain the necessary 34 state legislatures to call for a convention to consider a balanced budget amendment. By 1979, 30 states had passed the requisite resolution, but then the drive seemed to run out of steam. However, as the size of the contemplated deficits--exceeding $100 billion--began to sink in, the crusade took on new life, and Alaska, on Jan. 18, became the 31st state.
This began to capture the attention of congressional leaders, and a strategy of "launching a turtle" was devised--hold prolonged hearings in the hope that the anti-deficit frenzy will die down. Such hearings are intermittently held by a House Judiciary subcommittee chaired by Peter W. Rodino Jr. (on which I serve), with no end in sight.
But, to paraphrase Joe Louis' remark about Billy Conn, "we can run but we can't hide" from the issue. The driving force for balancing the budget arises from the almost universally held conviction that most of our serious economic ills--inflation, high interest rates, recession--can be traced to deficit spending. Republicans have always believed this with theological fervor, but now even Democrats are joining the ranks of the true believers.
If deficit spending is the devil, what price exorcism? What side effects might a balanced budget amendment cause to the national economy? The effect would be profound, because only twice in the past 20 years have we had a budget in balance.
I suggest before we get emotionally and politically committed to any such proposition, some attention to detail is essential if we are not to be confronted with a new and equally frustrating set of difficulties. What are some problems with the amendment? Can we make some changes that will make it work?
Congress may feel it is lifting the burden of hard choices by transferring fiscal policy to the Constitution, but business cycles, with their contractions and expansions, are an unavoidable part of a free economy; when the economy contracts, the same hard choices will present themselves. Shall we vote to raise taxes or try for a three-fifths vote to create a deficit? Or, toughest choice of all, shall we sharply cut spending?
OMB Director David Stockman was quite correct when, at his confirmation hearings, he adverted to the ability of Congress to innovate when it comes to spending. True, some conventional off- budget outlays would be covered by the amendment, but what about indirect spending, such as loan guarantees and federal mandates to both the private and non-federal public sector? Will Congress, in a perverse form of federalism, toss some seriously burdensome fiscal responsibilities to impoverished state and local governments? Does anyone think revenue sharing has much of a future under the amendment?
To those of us who worry about judicial activism on the part of unelected, lifetime-tenured federal judges, are we transferring budget decisions that belong in Congress to the courts?
One hates to be technical as the Budget Balancing Train rolls down the track, but there is a time- lag between policy action and cash impact, and won't this create a bias toward increasing taxes rather than lowering spending?
The experts tell us that cash flow changes resulting from new tax policy can be realized within three months, whereas cash flow changes owing to new spending policy require from three months to three years to enact, implement and realize.
Under the proposed amendment, to increase the deficit, a super majority (60 percent) vote is required. To increase taxes requires only a simple majority. The latter may thus be easier to achieve, and hence the bias toward increasing taxes.
There is a double bias against defense spending: under the amendment the only way to incur a deficit for defense by majority vote is in the event of a formal declaration of war by Congress. But such declarations are anachronistic in the contemporary world. They bring into play a whole litany of war-time laws involving treason, censorship, trading with the enemy and a panoply of emergency powers that, under the particular circumstances, might be unwarranted and unwise.
To state the problem is to suggest a solution: change the requirement from a declaration of war by Congress to a presidential declaration of national emergency affecting our national security interests.
The other bias against defense rests in the fact that, in an economic squeeze, where outlay reductions are necessary to balance the budget, the last target will be entitlements and the first target will be the "controllable outlays," and 70 percent of these are for defense.
While recognizing the adoption of such an amendment might signal the money markets that we are serious about eliminating budget deficits, one can easily imagine a scenario where this Congress adopts such an amendment and four years or so are consumed in the ratification and implementation process. By then, many members of the present Congress will be gone, but, in the interim,,it will be spending as usual. The Wall Street Journal has termed this exercise "a game of constitutional cop-out."
On the other side of the argument, some powerful allies are working effectively, including Milton Friedman, the National Taxpayers Union and the National Tax Limitation Committee and others-- knowledgeable and deserving of great respect. They present some virtually irresistable arguments--which can be summarized in seven short words: the federal budget is out of control.
Just what it takes to jolt Congress out of its relentless urge to spend is the big question. But wasn't that what the election of 1980 was all about? The voters really have the last word, if only they would use it!
This issue is too important to remain bottled up in a subcommittee of Congress. It ought to be debated by the House and Senate.