What’s Wrong with Calling for a Constitutional Convention to Enact a Balanced Budget Amendment?

03 February 2015 Written by  

What’s Wrong with HJR 7 (Rep. Powell) Calling for a Constitutional Convention to Enact a Balanced Budget Amendment to the U.S. Constitution?

Antonin-ScaliaCalling a Constitutional Convention is risky and dangerous. If Congress called a Constitutional Convention, or attempted to do so, the country would be thrown into turmoil, with an extended period of extraordinary contention and deep anxiety, and likely find itself in lengthy legal and political battles of great consequence for the nation’s future.

States cannot limit the agenda of a Constitutional Convention. A Constitutional Convention would open up the entire Constitution to whatever amendments its delegates chose to propose, just as the convention that produced the current Constitution ignored its original charge (to amend the Articles of Confederation) and instead wrote an entirely new governing document. 

Utah’s delegates would make up only a tiny part of the Constitutional Convention. With less than 1% of the U.S. population, Utah’s delegation would be far outnumbered by states like California and New York that have very different political cultures and values. 

A Balanced Budget Amendment would make recessions deeper and longer. Requiring a balanced budget every year, no matter the state of the economy, would tip weak economies into recession and make recessions longer and deeper, causing large job losses. Ironically, this could also lead to larger federal budget deficits.

Important federally funded programs, such as Medicare and Social Security, would be vulnerable to cuts. To balance the budget every year, even when the economy is weak, Congress would need to cut investment in a wide range of national priorities, including infrastructure, education, disease control, food safety, financial regulation, assistance for vulnerable families and children, and even Medicare and Social Security.

Federal budget cuts would harm state and local priorities. Federal funds account for about a quarter of all Utah state government revenues.  Cuts in aid to state and local governments would force states to either raise revenues, eliminate programs, or shift spending within state budgets to make up federal losses.  The impact would be devastating for infrastructure investment, public education, public health, as well as vulnerable populations such as single mothers, poor children, and the disabled. 

Economists say that the federal government should have the same flexibility as state governments and households to make use of debt capacity when prudent to do so. State governments balance their operating budgets but also have capital budgets that allow them to use their debt capacity to finance major investments with long-term costs and benefits.  Likewise, families are able to purchase a home and a car and finance higher education with a mortgage, an auto loan, and education loans. Economists say that taking this capacity away from the federal government would have a crippling effect on the nation as a whole.   

Deficit reduction has been accomplished in the recent past through normal legislative and budgetary processes. The years 1945-1973 and 1996-2000 saw steep reductions in the federal debt-to-GDP ratio thanks to rapid economic growth and bipartisan cooperation at the federal level.
 
“…we do not believe this mechanism can achieve its desired result. Its effects may even prove perverse… leave the Constitution out of it.”
Wall Street Journal editorial July 19, 2011
 

Matthew Weinstein 300Matthew Weinstein, State Priorities Partnership Director, joined the organization in 2014. As State Fiscal Policy Director, he conducts analysis and advocacy focused on the state budget from the perspective of what's best for Utah's children. He holds a Master of Public Policy degree from Georgetown University and a B.A. in Political Science from Amherst College.