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WI: The Balanced Budget Amendment Passed

B

Blackadder Mk2

Well-known member
So one thing I found out about the balanced-budget campaigns of the 1990s in America was first that it was considered a big deal by the public (or enough of them) and that it was actually the closest of the failed amendments to succeeding via the Congressional method i.e. 2/3rds of the House and 2/3rds of the Senates. It only failed by one vote in the Senate in 1995 after two Republicans joined Democrats in rejecting it. It came close again in June 1996 but lost by two votes this time.

The question is simple, let's say one of those Republican Senators sticks to the party line or fifteen instead of fourteen Democrats take the plunge and the balanced-budget amendment passes with a 2/3rds majority in both Congressional Houses. The US Constitution now has a balanced-budget amendment which, from what I can gather, requires a balanced budget unless 3/5ths of both Houses of Congress agreed to waive it. Whether it's in 1995 or 1996, I don't think it's unreasonable to say that this would change a lot.

It's a big defeat for Clinton and a big win for Gingrich and Republicans. My knowledge of American politics is lacking, not least '90s, but I can see this being damaging in the general election and might give Dole a bigger edge, although maybe not enough to push him over the line. Presuming the absence of butterflies, the Bush years had to deal with economic troubles and the War on Terror, so I could see a bi-partisan deal to have a deficit to take out Bin Laden, but once the Democrats have their 2006 landslide and the 2008/9 economic crisis hits, that's not going to be fun.

As for outside of the US, I'd say this might make some Anglophone conservative movements begin a push for one of their own but not really amount to much. Britain wouldn't be that much different as Blair/Brown's promise to keep to Tory spending limits in 1997 isn't going away and it's not like there's a Constitution to amend. Maybe having a Balanced Budget Act becomes a thing to go with the OBR?
 
And I THINK it has to pass a popular vote too. Not sure on that though. I can't honestly recall at the moment. Let's just say that the US Constitution is insanely difficult to amend.
 
No popular vote requirement/referendum, although given the timeline for amendment and the requirement to pass both chambers with a 2/3rds majority and get state ratification, you'd probably need parties that explicitly support the amendment to come to power. Be interesting if it's a campaigning issue though.
 
If this budget was passed, it would rapidly become a millstone around the USA's neck.

Sometimes deficit spending is necessary, sometimes it's necessary in an emergency. Deficit spending being necessary, and also unconstitutional, compounds the existing problem and divides attention at a critical time.


When the Great Recession hits, discretionary spending will balloon as people need access to welfare to survive the downturn. Except, discretionary spending can't balloon, so people will either starve in the streets or watch the government gut.... very crucial things. Once you factor in the near-unanimous view that deficit spending averted a second Great Depression, and you actually have the economy tanking and any response hamstrung by the Constitution.

The USA would also be effectively unable to wage war. While the particular action itself can be questioned, in this case the invasion of Iraq would be off the table. Instead of enacting a geopolitical goal through deficit spending, the USA would have to either raise taxes to pay for the war, or again gut existing programs. Neither is every going to happen, and moden warfare is expensive.

A Balanced Budget Amendment would be cutting America's nose to spite its face. It would find itself hamstrung both domestically and internationally.
 
Komnenos said:
If this budget was passed, it would rapidly become a millstone around the USA's neck.

Sometimes deficit spending is necessary, sometimes it's necessary in an emergency. Deficit spending being necessary, and also unconstitutional, compounds the existing problem and divides attention at a critical time.


When the Great Recession hits, discretionary spending will balloon as people need access to welfare to survive the downturn. Except, discretionary spending can't balloon, so people will either starve in the streets or watch the government gut.... very crucial things. Once you factor in the near-unanimous view that deficit spending averted a second Great Depression, and you actually have the economy tanking and any response hamstrung by the Constitution.

The USA would also be effectively unable to wage war. While the particular action itself can be questioned, in this case the invasion of Iraq would be off the table. Instead of enacting a geopolitical goal through deficit spending, the USA would have to either raise taxes to pay for the war, or again gut existing programs. Neither is every going to happen, and moden warfare is expensive.

A Balanced Budget Amendment would be cutting America's nose to spite its face. It would find itself hamstrung both domestically and internationally.
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But only if the amendment has no mechanism to allow deficit spending. I believe, though I'm by no means certain, that this one did.
 
I was going to say that surely the Republicans wouldn't be willing to drive the national and global economy off a cliff, just to score points on a president from the other side of the aisle; but I laughed so hard my laptop is covered in tea.
 
SSgtC said:
But only if the amendment has no mechanism to allow deficit spending. I believe, though I'm by no means certain, that this one did.
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I looked it up and you're correct. Deficit spending can be done during a "national emergency", a recession, and in times of war.

The cynic in me thinks that no one will want to cut programs or raise taxes, so every year a new national emergency will be found. Alternatively, the creative accounting tricks the GOP pulled with the recent tax bill to disagree with the CBO become the norm for everyone. The projections will show balanced budgets until someone else has to deal with the reality they weren't.
 
Komnenos said:
I looked it up and you're correct. Deficit spending can be done during a "national emergency", a recession, and in times of war.

The cynic in me thinks that no one will want to cut programs or raise taxes, so every year a new national emergency will be found. Alternatively, the creative accounting tricks the GOP pulled with the recent tax bill to disagree with the CBO become the norm for everyone. The projections will show balanced budgets until someone else has to deal with the reality they weren't.
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Yeah, I largely agree. Both sides already manipulate the numbers to show what they want. This would just make it worse. And life you, I'm so if the opinion that a "national emergency" would be found pretty regularly. Best guess, we might see a true balanced budget one year in ten.
 
As I have said previously, I very much doubt this amendment was ever actually going to pass. What likely happened was that the Republicans knew that this was an issue that could cost the Democrats the last vestiges of their Blue Dog senators unless those senators voted for the amendment. Since the Democrats did not want this amendment to pass and look weak, nor lose those senators, what probably happened was they met with Republican leadership and purchased the two Republican votes needed to defeat the bill in exchange for some favor elsewhere. This is the sort of horse-trading and manipulation that goes on all the time in American politics.
 
The 1995 amendment attempt allowed for an exemption to the balanced budget requirement if 3/5ths of both houses of congress permitted it. (I think the attempt to pass one in 1994, when the Democrats still had control of the process, was more lenient - IIRC it needed only 55 votes in the Senate and a fairly simple majority in the House under that proposal - I may be misremembering that though, it's been a while) So it wouldn't have been an iron law, if it had it wouldn't have come so close to passing, but it would have had the effect of empowering deficit hawks as a blocking minority.

I am not sure I can see it passing in the states, though it would have come very close if not.

The last few decades are really the worst time for something like this to be introduced - all it would likely do is exacerbate the political gridlock we've seen over budget issues and make shutdowns even more preponderant. I don't think it would have much effect in the short-term (it wasn't even envisaged to take effect until the next century if it had passed) but it would be a minefield by our time, whatever the butterflies. The intention of the more serious-minded proponents of a balanced budget amendment was to force politicians to make unpalatable choices where it was needed, so they could pass the buck for unpopular moves onto the amendment requirement with their constituencies - Republicans to be more sane on tax and military spending, Democrats to be more open to domestic cuts. It's almost impossible to imagine it would actually work that way in practise though, particularly with the hindsight of the last two decades.
 
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