Americans may see a budget amendment convention this year

For most of our nation’s history, fiscal policy was governed by what some describe as the “Old-Time Religion” of balanced budgets. A balanced budget rule was not incorporated in the Constitution, but the people and legislators alike supported a balanced budget. The federal government might have to rely on debt in a period of war, but in peacetime, the government was expected to balance the budget and use surplus revenue to pay down the debt.

In the post-World War II period, however, this informal rule was virtually abandoned. The federal government has incurred deficits and accumulated debt in peacetime as well as periods of war.

There have been a few years when the federal government balanced the budget and incurred surpluses, such as the last few years of the 20th century. Some have attributed this brief period of fiscal discipline to new fiscal rules enacted by Congress in the 1990s. But balanced budgets and surplus revenue in those years reflected primarily rapid economic growth.

In 1998, Congress suspended these statutory fiscal rules, which were allowed to expire in 2002.

Congress has passed new fiscal rules since the turn of the century, but these rules have suffered the same fate as earlier ones. Congress has circumvented or suspended the fiscal rules rendering them ineffective in the long term. The mislabeled Fiscal Responsibility Act of 2023 imposed caps on spending for 2024 and 2025. But at the same time, Congress agreed to suspend the rules in drafting appropriations bills. In other words, members of Congress now agree to suspend fiscal rules at the same time they enact the rules.

When Congress suspends fiscal rules, it pursues discretionary fiscal policy. Logrolling results when legislators respond to special interests. The most important of these informal agreements is between Republicans, who support increased defense spending, and Democrats, who support increased domestic spending.

This logrolling trade-off is so important that it was incorporated into the statutory rules enacted by Congress. Our elected officials want to appear to be fiscally prudent by enacting statutory fiscal rules, but when the rules constrain spending, they are often circumvented or suspended.

The people must end this budget charade. For too long, we have relied on Congress to enact statutory fiscal rules imposing fiscal discipline. The fatal flaw in this budget process is that statutory fiscal rules enacted by one Congress can be circumvented or suspended by a subsequent Congress.

Over the years, Congress has also proposed fiscal rules as constitutional amendments but has never achieved the two-thirds majority required to submit the proposed amendments to citizens for ratification. Article V gives citizens as well as Congress the right to propose amendments.

In fact, citizens and their state representatives have been proposing fiscal responsibility amendments for more than half a century; in 1979, two-thirds of the states had proposed such amendments. At that point, Congress was required to call the amendment convention, but Congress failed to fulfill this duty under Article V.

This year, the people may finally see some light at the end of this tunnel. House Budget Committee Chairman Jodey Arrington, Texas Republican, introduced HCR 24, requiring Congress to count these state resolutions and call the amendment convention.

For too long, Congress has suffered from debt fatigue, but we don’t need to depend on our elected officials in Congress. It is now up to citizens and their state representatives to exercise the power granted to them in Article V of the Constitution.

With a fiscal responsibility amendment in the Constitution, citizens rather than politicians could determine how much government they want and are willing to pay for. There is growing support in the states for a fiscal responsibility amendment to constrain the growth of our leviathan.

• Barry Poulson is a founding board member of the Federal Fiscal Sustainability Foundation. Michael D. Rose is emeritus professor of Law, Moritz College of Law at Ohio State University.

Source: WT