Rik Schneider Online

Monday, July 25, 2011

Balanced Budget story from 1995: How a Balanced Budget Amendment could work

I've been thinking about the idea of a Balanced Budget Amendment to the US Constitution on and off for about fourteen years now or so. Since the last time Congress spent time considering it. At first I kind of liked the idea as someone who believes in Fiscal Responsibility, which me to means spend no more then you make and try to save as much as possible and put away as much as possible without hurting yourself. And only spending money on the things that you need and spend that money in the most efficient way as possible. Concepts that the Federal Government doesn't seem to understand, as well as a lot of State Governments. My main problem with a Balanced Budget Amendment, would be the Federal Courts or any other courts. Do we want unelected body's telling the Federal Government how it can spend the Tax Revenue it collects. Which I believe could happen when there are issues of whether Federal Budgets are balanced and in the black or not. And when could the Federal Budget be in the red, because all Balance Budget Amendments have exceptions of when the budget can be in the red. Like when the country is under attacked or in a depression, when the Federal Government is the only institution thats capable of borrowing money in America. Because they control the National Currency and it might take a Federal Judge to decide that these things are happening, even if its obvious to everyone else. Thats its OK to for the Federal Government to now borrow money and go in the red and run a deficit. So for me to support a Balance Budget Amendment, it would have to designed in a way to avoid this. Would be to leave it up to the Congressional Budget Office or Federal Reserve, people who can get fired for not doing a good job. Unlike Federal Judges who can only be removed through Impeachment and Conviction which comes from being corrupt. And generally not from the job they do as Judges. Or have some type of Super Majority Vote in both Chambers of Congress to declare its OK to borrow money, lay out what the conditions are and force Congress to declare them before it borrows money.

The Balance Budget Amendment has no place in today's Debt and Deficit Reduction Debate. Because it doesn't have the votes in either Chamber of Congress to pass right now. And it would take 5-10 years for it ever to become law anyway because the States would have to approve it. But down the road a BBA I believe has some potential if we can keep the Federal Courts out of making budget decisions for the Federal Government.
A BBA that I could support, would only have three exceptions for the FEDS to borrow money and would have a strict PAYGO Requirement pay as you go. For the FEDS to borrow money, the United States itself would have to be under attacked and for us to be at war. Not a Military Base oversees but the country physically itself. Two we are either in a depression or recession which would be declared by lets say the Federal Reserve and those would be my only two exceptions. And then the President would have to declare this and it would take a 3/5 Vote in both Chambers of Congress to make it official. All other Federal Operations would have to be paid for when one of the two exceptions to borrow money hasn't been declared. Including Military Operations Domestic and Foreign including war and invasions and Disaster Relief. And these things can be paid for if the Federal Government sets up fund for both of them. And then I would put in things as long as we are under a BBA, that require the Federal Government to stay within Economic Growth and the Rate of Inflation. Meaning it couldn't grow higher then those two rates.

A Balance Budget Amendment if done right, could result in forcing the Federal Government to be responsible with the Tax Revenue it collects and set priorities and actually pass a Federal Budget every year. Instead of running the country into red and piling on debt that no one can pay back or has the intention of ever paying back.

Click on the link of the blog to see a video about the 1995 House Balance Budget Amendment Debate