PDA

View Full Version : General Politics The Balanced Budget Amendment is a Horrible idea.


alnorth
07-29-2011, 10:33 PM
Now that a sufficiently provocative thread title caused you to click, here's an excellent article on the sticky subject no one wants to talk about: how the hell do you enforce it? Especially since it is not obvious how much money will be spent until a year or more after the bill is passed.

Can a balanced budget amendment matter? (http://www.politico.com/news/stories/0711/60262.html)

With federal budget deficits above $1 trillion a year as far the Congressional Budget Office can see, both Democrats and Republicans are pulling out their favorite gimmick for addressing the problem: the Balanced Budget Amendment.

The House Judiciary Committee last month reported out a high-octane version, complete with super-majority requirements to raise the debt ceiling and increase revenues. Republicans in both chambers have now promised to bring versions of it to a floor vote soon.

Proponents regularly point out that the states have to balance their budgets annually and insist that the federal budget will not be in balance unless Congress is forced to do it — only a constitutional amendment can prevent continuous overspending.

There are many reasons to oppose a balanced budget amendment, but there is one feature that should give everyone real pause. If it becomes law, how will it actually be enforced? And if that means the federal courts do it — is the cure worse that the budget problems that brought it on?

The role of judicial review has been raised in the past, by legal scholars like Robert Bork. Nonetheless, the proponents steadfastly refuse to say what role federal judges will have under the amendment. For understandable, if irresponsible, reasons: They don’t seem to like any of the answers.

Consider, for example, that Congress passes a budget and then enacts spending laws that clearly exceed the anticipated revenue, in violation of the balanced budget amendment. Because the Constitution is not self-enforcing, and it would be Congress whose laws caused the violation, Congress can hardly be expected to override itself.

Unless the budget were passed over the president’s veto, he cannot be expected to come to rescue. Moreover, if he wanted to stop the over-spending, where would he make the cuts and in what amounts? And by what authority could he do that unilaterally?

That leaves only the judiciary, which at least would not be complicit in the violation. Of course, courts do not initiate cases of any kind, let alone major confrontations with the other branches. Someone has to file a lawsuit. Which brings us to a serious problem that the supporters of the amendment in the ‘90s refused to confront: Who has the right to bring such a suit — a legal doctrine known as standing?

In this situation, the harm alleged would be to taxpayers generally, but the Supreme Court has been clear that, except for some statutes that allegedly violate the Constitution’s Establishment Clause, taxpayers have no right to go to federal court to stop unconstitutional spending.

To be sure, if a Balanced Budget Amendment specifically stated that taxpayers may sue to enforce it, the courts would follow that direction. But without a clear direction to create an exception to the rule denying taxpayers standing, no one would be able to sue to stop a violation if the amendment becomes law — no matter how egregious or intentional it is.

Sen. Mike Lee (R-Utah) has proposed to eliminate the standing issue by allowing one-third of either House to sue. But this simply opens the door to scores of other problems that the proponents have not faced.

How will federal judges, including eventually the Supreme Court, decide whether the projections on both the revenue and expense side are sufficiently inaccurate that an unbalanced budget is inevitable? In most versions of the amendment, there are exceptions — some based on finding certain facts to exist, with others based on assertions of emergencies by the president or the Congress.

Will the courts be empowered to second-guess those determinations? If not, will that make the amendment effectively unenforceable — even if someone has the right to ask the courts to intervene?

Then there is dicey issue of remedy. Assume a court finds a 5 percent imbalance. Do the judges have to cut the same amount from all programs, or can they pick and choose? If so, on what basis? Perhaps they might stop all spending until Congress corrects the problem, and the court blesses what Congress has done. But what if Congress does not act?

It is also likely that the deficit may not be discovered, and certainly not finally established by a court, until after the fiscal year is over. Do the proponents expect the courts to order repayments from individuals who received too much Medicare, too high a salary, too big a college loan, or too many tax deductions? And if not, doesn’t the incentive for delay create another giant loophole?

It is not as though Congress is unaware of these problems. At hearings in both Houses back in the 1990s, I asked the proponents to please be responsible and provide answers in the amendment — and not leave it to the courts.

No one took up the challenge, however. For one very obvious reason: Both responses are unacceptable. If there is no judicial review, the amendment — which is sold as an elixir for all our budgetary ills — will be virtually toothless. If the courts step in, federal judges will be managing the federal budget forever.

It is hard to know which is worse.

alnorth
07-29-2011, 10:34 PM
First of all, we can always print money, so a balanced budget amendment wont do a damned thing to fix our financial problems. We want to continue entitlement spending, tax cuts, and wars at the current level? Fine, collapse the dollar today, worry about it tomorrow.

Second, a balanced budget amendment is stupid on a national level because sometimes catastrophes happen or you have a need for an extraordinary amount of spending on a project that might require a few years of borrowing at low interest. (e.g., we decide that invading Iraq is a swell idea for some insane reason)

Third, a budget passed by a willing congress and president wont be challenged by that same president or congress, and the taxpayers probably don't have standing to sue.

If someone does have standing, do you expect a judge to enforce it? You really trust the courts to be the arbiter of the budget every year, as if they don't already have enough to do? A budget which was assumed balanced probably won’t be discovered to be unbalanced until years later. Then what? Suppose the courts decide a particularly huge cut for a very unbalanced budget is unacceptable and they decide to impose a huge tax increase? No congress or presidential OK needed, you now just pay more taxes because the supreme court said so via the new amendment.

Also, we take it for granted that Boehner's bill will cut $X and Reid's bill will cut $Y, but those are both basically educated guesses by the CBO. Who isn't to say the CBO, if they are to be the ones who decide how much a budget spends before it is passed, won’t be heavily encouraged to low-ball it?

If you want to write a very long and complex amendment to eliminate all these uncertainties, that may be interesting, but your legislators who allegedly want a balanced budget amendment are largely not trying to make sure it is enforceable without horrible unforeseen consequences.

The “it works for the states, so why not?” argument fails because states aren’t prohibited from floating bonds or borrowing money. States also can't print their way out of it, but we can. They don’t have a debt ceiling, their limit is basically a realistic limit that the market won’t lend them more than a certain amount at reasonable interest. However, the market currently is willing to loan the US a ton of money at laughably low interest.

If the president or the legislature wants to spend money, they will figure out a loophole or some way out. The balanced budget amendment is useless at best, and unexpectedly harmful at worst.

If you want balanced budgets, vote only for people who will pass balanced budgets. An amendment is not the answer.

Taco John
07-29-2011, 11:45 PM
Why have speed limit laws? People will just break them anyway. Instead, we should just give drivers licenses to people who wont speed.

BucEyedPea
07-30-2011, 12:24 AM
The solution is free market money—which usually winds up being gold—and NO central bank. Just outlaw that.
Is it perfect nope. No solution will be.

alnorth
07-30-2011, 01:04 AM
Why have speed limit laws? People will just break them anyway. Instead, we should just give drivers licenses to people who wont speed.

Your analogy is not applicable at all.

Unless of course the cops had no idea how to determine speed until one hour after they pointed the gun at your car, by which time you are long gone. If the cops did figure out more quickly that you were speeding, there would be a serious question whether they, or any cop at all, had any right to pull you over. And, if they somehow caught you speeding, and they determined that they had a right to pull you over, the driver was then able to retroactively inflate the speed limit for everyone by 10 mph. voila, he's no longer speeding anymore so now you have to let him go, and now all drivers are driving another 10 mph faster and getting in more wrecks.

Try again. The balanced budget amendment is an idiotic idea which will give you the mere illusion of solving a problem while utterly failing to do a damned thing. Actually, being a completely worthless amendment could be the best case scenario, at worst, a balanced budget amendment would harm the country.

Frazod
07-30-2011, 01:40 AM
How about a Congressional Term Limit Amendment? Fuck these clowns. :shake:

Bewbies
07-30-2011, 02:38 AM
Warren Buffett was on tv and said the way he'd fix this mess was that if the gov't had to borrow more than 3% of it's budget that Congress would be unable to seek reelection. He'd make an amendment for that and they'd spend within their budget every freaking year. LMAO

petegz28
07-30-2011, 07:28 AM
What it all comes down too is you are asking the criminals to police themselves

banyon
07-30-2011, 08:08 AM
I'm not against the idea in principle, but you raise some good criticisms.


First of all, we can always print money, so a balanced budget amendment wont do a damned thing to fix our financial problems. We want to continue entitlement spending, tax cuts, and wars at the current level? Fine, collapse the dollar today, worry about it tomorrow.

If that happens, I think reforming the Fed would be the next step.

Second, a balanced budget amendment is stupid on a national level because sometimes catastrophes happen or you have a need for an extraordinary amount of spending on a project that might require a few years of borrowing at low interest. (e.g., we decide that invading Iraq is a swell idea for some insane reason)

You can easily have an exception built into the amendment where Congress declares a war or a national emergency. Just make it a supermajority and make it meaningful.

Third, a budget passed by a willing congress and president wont be challenged by that same president or congress, and the taxpayers probably don't have standing to sue.

Good point, create a standing exception in the amendment.


If someone does have standing, do you expect a judge to enforce it? You really trust the courts to be the arbiter of the budget every year, as if they don't already have enough to do? A budget which was assumed balanced probably won’t be discovered to be unbalanced until years later. Then what? Suppose the courts decide a particularly huge cut for a very unbalanced budget is unacceptable and they decide to impose a huge tax increase? No congress or presidential OK needed, you now just pay more taxes because the supreme court said so via the new amendment.

Well, the debt ceiling is just a law that the courts would have to enforce, but it seems like these guys respect it, right?

If you want balanced budgets, vote only for people who will pass balanced budgets. An amendment is not the answer.

Tough to find.

cdcox
07-30-2011, 08:37 AM
A couple was out hiking when they became isolated by a forest fire. The fire was still a long way off, so there was no need to panic. They started walking in the opposite direction. They soon came a steep ravine. There was a wide but fordable river on the other side of the ravine that would protect them from the fire.They peered over the edge and saw that one pathway down was the most steep and rocky with lots of sharp rocks. Another direction was covered with cacti. Another path was known to go past the den of ravenous wolves. None of the options looked great. The fire was still a long distance away. The couple decided that they would never be able to successfully decide which of the paths to take so they purposefully provoked a rattle snake to bite each of them. They reasoned that now they had a compelling reason to make a rapid decision and that all of their problems would then be solved.

BucEyedPea
07-30-2011, 08:52 AM
Sorry, folks, a lot of this rests with having a central bank. They are the great enabler of this spending. Similar crap happened with the First Bank of the United States. Doesn't work. Do we ever learn? Now they're at it globally causing a global meltdown.

I know this sounds pessimistic but any system can be corrupted. The problem is ethics and that includes the people wanting goodies.

mlyonsd
07-30-2011, 08:54 AM
None of the issues raised are insurmountable.

As is already proven by our situation today, career politicians with no leash can cause way more problems then a BBA.

mlyonsd
07-30-2011, 08:58 AM
A couple was out hiking when they became isolated by a forest fire. The fire was still a long way off, so there was no need to panic. They started walking in the opposite direction. They soon came a steep ravine. There was a wide but fordable river on the other side of the ravine that would protect them from the fire.They peered over the edge and saw that one pathway down was the most steep and rocky with lots of sharp rocks. Another direction was covered with cacti. Another path was known to go past the den of ravenous wolves. None of the options looked great. The fire was still a long distance away. The couple decided that they would never be able to successfully decide which of the paths to take so they purposefully provoked a rattle snake to bite each of them. They reasoned that now they had a compelling reason to make a rapid decision and that all of their problems would then be solved.

Confucius, is that you?

BucEyedPea
07-30-2011, 09:00 AM
Confucius, is that you?

I thought you would have asked is he Rahm Emanuel, because that sure looks like taking advantage of a crisis.

Ace Gunner
07-30-2011, 10:56 AM
Fine, collapse the dollar today, print new money tomorrow.


there, that's more accurate

RINGLEADER
07-30-2011, 11:30 AM
Freeze spending for a decade. That would save $10 trillion and maintain our debt at $14 trillion.