Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 29, 1995 TAG: 9502010016
SECTION: EDITORIAL PAGE: B3 EDITION: METRO
SOURCE: ROBERT L. BIXBY
DATELINE: LENGTH: Long
It imposes a rigid approach to budgeting that doesn't allow the kind of flexibility that Congress, ideally, should have. Further, an absolute zero balance every year isn't as important as having the fiscal responsibility and prudent restraint to run modest deficits only when conditions such as war and recession warrant them.
Additionally, passage of a constitutional amendment might lead people to believe the problem has been solved, when in reality the hard work will have only just begun. Concerns about how terms such as ``outlays'' and ``receipts'' should be defined, and ultimately how the zero-deficit requirement could be enforced, are very legitimate.
Given those admitted problems, why is it time to pass a balanced-budget amendment?
To answer this question you first have to answer three others:
Is our escalating debt addiction good for the economy?
Are current budget trends sustainable?
Are we likely to kick the habit through any other means?
Since the answer to all three of the above is no, a balanced budget amendment is necessary despite its flaws.
First, deficits of the magnitude we are now running hover over the economy like a big wet, heavy blanket.
Federal Reserve Chairman Alan Greenspan has explained, ``Deficits ... pull resources away from private investment, reducing the rate of growth of the nation's capital stock. This in turn means less capital per worker than would otherwise be the case and engenders, over the long run, a slower growth in labor productivity and, with it, a slower growth in our standards of living.''
A related concern is the growing amount of resources devoted each year to interest payments. As the debt grows, interest - now 15 percent of all federal spending - consumes an increasingly large portion of the budget. To the extent that it is not spent on long-term investments, today's debt simply finances our own consumption at the expense of the future.
Does the future hold promise of some built-in form of relief? If we just get through the next few years, can we expect the crisis to pass?
The answer to this was provided in stark terms last year by the Bipartisan Commission on Entitlement and Tax Reform chaired by Sens. Bob Kerrey, D-Neb., and John Danforth, R-Mo. In an interim report released in August, the commission concluded that current trends are not sustainable. In other words, we are not experiencing a temporary cash crunch. The seeds of a crisis have already been sown.
According to Kerrey and Danforth, the problem is not that inflation or wasteful ``pork barrel'' projects will balloon over the next several years. Instead they warn, ``An aging population and sharp increases in health care spending lead to unsustainable growth in federal entitlements. Without reform, this deepening problem will jeopardize the nation's long-term economic growth and prosperity.''
The entitlement commission's warning leads to the final question: How, in the absence of a constitutional amendment will Congress (and the above-noted aging population) summon the political courage to alter our current unsustainable addiction to federal spending?
Statutory remedies have failed. Debt-limit legislation was enacted in 1917. But every time deficit spending approaches the limit, Congress simply raises it.
Virginia's Sen. Harry Byrd authored legislation in 1978, 1980 and 1982 stating that, ``Total budget outlays of the federal government shall not exceed its receipts.'' Congress adopted these ``Byrd amendments'' and ignored every one of them.
In 1985, Congress enacted the Gramm-Rudman-Hollings law in an attempt to force a balanced budget by 1991. As it turned out, the deficit in 1991 was $270 billion, second highest in our history.
As for self-discipline, the prospects are dim. The budget has not been balanced since 1969. Even now, with all the talk about a balanced budget, there are strong pressures to exempt everything other than welfare, foreign aid and the Corporation for Public Broadcasting from serious cuts. States want the federal government to fully fund all mandated programs, and leaders of both parties are promising tax cuts and defense-spending increases.
This is not encouraging for those who argue that Congress can summon the will to cut approximately $1.2 trillion from projected deficits over the next seven years to balance the budget without a constitutional amendment.
Supporters of the amendment should have no illusions. Amending the constitution will not guarantee a balanced budget. Perhaps our debt addiction will conquer both our respect for the Constitution and our sense of generational morality. But the amendment, if enacted, would at least change the question from whether to balance the budget to how the budget should be balanced.
Opponents of the amendment make some valid points. Ultimately, however, they must confront the fact that we cannot go on as we are, and nothing else has worked. The time for a balanced budget amendment to the Constitution has come.
Robert L. Bixby is Virginia state director of The Concord Coalition.
by CNB