Balanced Budget Amendment No Answer for Long-Term Budget Problems
With the House planning to vote this week on a balanced budget amendment to the Constitution, we’ve updated our two papers explaining why such an amendment, particularly the version before the House, is the wrong way to address the nation’s long-term budget problems:
It would threaten significant economic harm while raising a host of problems for the operation of Social Security and other vital federal functions. The economic problems are the most serious, and they would pertain to any version of a constitutional balanced budget amendment. By requiring a balanced budget every year, no matter the state of the economy, such an amendment would raise serious risks of tipping weak economies into recession and making recessions longer and deeper, causing very large job losses.
Here’s our paper on the economic damage and other problems that a balanced budget amendment could cause.
Here’s our paper on the massive spending cuts that the proposal before the House would require.