Return of a 'CYA' Budget Policy

The long-ago defeated proposal for a balanced budget constitutional amendment is rearing its ugly head once again. Unable to pass a budget this year and having created near-record deficits, some members of the House are desperate to create the appearance of being fiscally responsible, and are considering bringing up a vote on the measure (H. J. RES. 22).

A constitutionally mandated requirement to balance the budget every year would have terrible economic consequences. It would destabilize the economy by amplifying downturns in the business cycle; and it would restrict the nation's ability to invest in projects that would yield significant benefits in the future. (A good example of the various arguments made against the amendment is a Clinton-era Treasury Department memo by Brad DeLong.)

In addition, more than 1,000 economists have publicly opposed the amendment, including 11 Nobel laureates. The letter was coordinated by the Economic Policy Institute in 1997 (See press release).

It would be unfortunate if the return of this inherently misguided and economically risky amendment distracts Congress when they have so many important issues to address. This House Judiciary Committee may take this up this Wednesday, Sept. 22, and full House action could be next week.

Take Action Now! Urge Congress to reject the Balanced Budget Amendment.

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