Balanced-Budget Amendment - H.J.Res.2

The House failed to suspend the rules and pass the joint resolution that would propose a constitutional amendment that would require the U.S. government to operate under a balanced budget each year, beginning five years after ratification. Under the proposal, three-fifths of the entire House and Senate would be required to approve deficit spending or an increase in the public debt limit, but a simple majority would be sufficient to waive the requirement in times of congressionally declared war or in the face of a serious military threat.

Summary

H.J.Res. 2 amends the Constitution of the United States to require three-fifths of both legislative bodies to approve spending than exceeds government revenue, require three-fifths of both legislative bodies to raise the limit on the debt, and require the President to submit a proposed budget to Congress in which total outlays do not exceed total receipts. Congress may wave these requirements for any fiscal year the United States is engaged in military conflict that causes an imminent and serious military threat to national security and is so declared by a joint resolution.

Background

Article V of the Constitution provides two methods to amend the Constitution.  The first method allows Congress to propose amendments to the states for ratification, if two-thirds of both Houses agree upon a proposed amendment. The second method, known as the convention method, requires Congress, "on the Application of the Legislatures of two thirds of the several States,” to call a convention for proposing amendments.

To date, 49 states have exercised their right under Article V to apply for a convention to consider amendments, including a balanced budget amendment, to the Constitution. Outside groups have estimated that over 500 such applications have been submitted by states since the Constitution was ratified. The requisite number of applications from states (34 at present) on the same subject has never been met and subsequently a convention has never been called.

Cost

A Congressional Budget Office (CBO) estimate is not currently available.

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The measure (H J Res 2) would bar Congress from spending more than the government takes in each year, unless three-fifths of each chamber voted to allow excess outlays. Under the proposal, repayments of principal owed on U.S. debt securities would not be counted against outlays, and the balanced-budget requirement could be waved during wartime. No exceptions are provided for emergency economic scenarios, however, such as the recession last decade that spurred massive government stimulus packages and drove up huge annual budget deficits.

The proposed amendment would also require a three-fifths majority vote in each chamber to raise the debt limit, a high bar for one of the most unpopular votes lawmakers take every few years.

A House vote on some version of a balanced-budget amendment was previously expectedsometime in April. House GOP aides said the vote will be next week after lawmakers return from a two-week recess, where many Republicans got an earful from constituents about the $1.3 trillion spending package (PL 115-141) Congress passed right before the break, one aide said.

The resolution faces steep odds of being adopted, as two-thirds of each chamber is needed to approve any amendment to the Constitution. And if both chambers adopted the resolution, it would still need to be ratified by three-fourths of the states. The legislation allows seven years for states to do so, and the balanced-budget requirement wouldn’t take effect until five years after ratification.

Taking up the balanced-budget amendment is largely seen as a way for members to show constituents they still care about deficits after Congress passed multiple pieces of budget-busting legislation in the last year. That includes a tax code overhaul (PL 115-97) projected to add $1.1 trillion to annual deficits over the next decade and a budget agreement (PL 115-123) expected to cost $320 billion during that time frame, not counting interest payments on the increased debt.

Speaker Paul D. Ryan, R-Wis., also promised conservative House members, namely the Republican Study Committee, a balanced-budget amendment vote in exchange for their support for a budget resolution (H Con Res 71) that was critical for Republicans to pass their tax code overhaul last year.

Symbolic Vote?

Many Democrats and a few Republicans have panned the move as a face-saving gimmick. Sen. Bob Corker, R-Tenn., who voted for the tax cuts but against the spending deal, wrote on Twitter, “Republicans control the House, Senate and White House. If we were serious about balancing the budget, we would do it. But instead of doing the real work, some will push this symbolic measure so they can feel good when they go home to face voters.”

Other balanced-budget amendments have been introduced this Congress by members on both sides of the aisle, including a slightly different version from Goodlatte (H J Res 1) that would limit spending to 20 percent of gross domestic product, unless two-thirds of each chamber votes to waive that requirement. The earlier Goodlatte version would also require three-fifths of each chamber to vote to raise taxes as a means of bringing the budget into balance. The version slated for floor action would lower that threshold to a simple majority, though presumably it would still require 60 Senate votes to break a filibuster if such a tax bill does not move under budget reconciliation procedures.

In addition, freshman Rep. Stephanie Murphy of Florida and fellow members of the Blue Dog Coalition, a group of Democrats who push for fiscal stability, introduced their own version of a balanced-budget amendment (H J Res 107). Their measure would suspend the requirement in times of economic recession — defined as negative GDP growth for two or more consecutive quarters — and if unemployment tops 7 percent for two or more consecutive months. It would also exempt spending and revenues associated with the Social Security and Medicare trust funds. 

The last time the House took up a balanced-budget amendment was in 2011, when lawmakers voted 261-165 in favor of a resolution from Goodlatte, similar to the version the House will take up next week. The result was short of the two-thirds needed for adoption. Ryan, who was Budget chairman at the time, was one of four Republicans to vote against the plan because he said it could lead to a greater chance of tax increases in the future.

Goodlatte, who is retiring from Congress at the end of the term, has introduced balanced-budget measures every two years since 2007. In a statement Thursday, he praised House GOP leaders for deciding to bring his measure to the floor and said that a balanced-budget amendment "has been one of the highest priorities of my tenure in Congress."

"A constitutional amendment requiring a balanced budget would finally bring discipline to federal spending and would benefit generations to come," he said. "I challenge my colleagues in the House and Senate to do what is morally right and responsible by passing this amendment and sending it on to the states for ratification."