Budget — Federal
Constitutional Balanced Budget Amendment Poses Serious Risks
Would Likely Make Recessions Longer and Deeper, Could Harm Social Security and Military and Civil Service Retirement
A balanced budget amendment to the U.S. Constitution would be a highly ill-advised way to address the nation’s long-term fiscal problems. It would threaten significant economic harm while raising a host of problems for the operation of Social Security and other vital federal functions.
States Likely Could Not Control Constitutional Convention on Balanced Budget Amendment or Other Issues
In the coming months, a number of states are likely to consider resolutions that call for a convention to propose amendments to the U.S. Constitution to require a balanced federal budget, and possibly to shrink federal authority in other, often unspecified, ways. Proponents of these resolutions claim that 24 of the 34 states required to call a constitutional convention already have passed such resolutions. A convention likely would be extremely contentious and highly politicized, and its results impossible to predict. States would be prudent to avoid these risks and reject resolutions calling for a constitutional convention. States that have already approved such resolutions would be wise to rescind them.
The House Appropriations Committee recently adopted its fiscal year 2015 funding allocations for its 12 subcommittees. The allocations are consistent with the defense and non-defense discretionary funding caps set in last year’s agreement between Senate Budget Committee Chair Patty Murray and House Budget Committee Chair Paul Ryan. Despite that agreement’s partial relief from the sequestration budget cuts, the overall funding level is much tighter than many observers appreciate.
CBPP’s Updated Projections Show Long-Term Budget Outlook Is Significantly Improved but Remains Challenging
No deficit or debt crisis looms, and the weak labor market remains the nation’s most immediate economic concern. Policymakers should address the need both for immediate measures to strengthen the job market and for measures to reduce longer-term deficits, which should take effect when the economy has more fully recovered.
Projected Ten-Year Deficits Have Shrunk by Nearly $5 Trillion Since 2010, Mostly Due to Legislative Changes
Recent Spending Cuts Outweigh Tax Increases 3 to 1
Since 2010, projected ten-year deficits over the 2015-2024 decade have shrunk by almost $5.0 trillion, $4.1 trillion of which is due to four pieces of legislation enacted in the intervening years.
The federal budget outlines the U.S. government’s spending plans for the coming fiscal year and how it plans to pay for that spending. The three biggest areas of federal spending in 2010 were defense and security, Social Security, and public health insurance programs, each of which made up roughly one-fifth of the budget. Roughly four-fifths of the revenue that the federal government collected to pay for these programs came from individuals, through income and payroll taxes.
Paul Van de Water
The Center informs the debate over federal budget priorities by analyzing the President’s budget and major congressional proposals throughout the annual budget process. We pay particular attention to the adequacy of funding for programs that assist low- and moderate-income families. We also analyze long-term budget challenges and measures to address them. In addition, we promote measures to improve fiscal responsibility.
October 21, 2014
Updated September 10, 2014
Updated August 4, 2014
July 29, 2014
July 28, 2014
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