THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, January 19, 1995 TAG: 9501190015
SECTION: FRONT PAGE: A12 EDITION: FINAL
TYPE: Letter
LENGTH: Medium: 52 lines
On Jan. 19, the U.S. House of Representatives is scheduled to vote once again on a federal balanced-budget amendment to the U.S. Constitution. Congress wisely rejected the proposal in 1994. It should do so again.
The amendment would have dangerous, unintended economic and governmental consequences. It would permanently put U.S. fiscal policy in a straitjacket, making it very difficult for the federal government to stimulate the economy during serious recession, respond to natural disasters or cover major bank failures that might cause a deficit.
Also, the legislation would inappropriately shift power from Congress to the president and the federal courts. What happens if Congress and the president fail to reach an agreement on how to eliminate the deficit? Would the courts decide? How? Could the president take unilateral action? The amendment does not address these crucial questions.
The argument that ``many states are required to balance their budgets, so why not the feds?'' is misleading. According to a 1993 General Accounting Office report on state balanced-budget requirements:
Many states are required to balance their operating budgets but not their capital budgets, allowing investments in roads, school construction, etc. The federal balanced-budget proposal makes no distinction between operating and capital budgets.
States may require the governor or state legislature to submit or enact a balanced budget but not require that a year-end balance be achieved. These states maintain the flexibility to deal with unexpected economic developments that can push a budget into deficit.
Many states have ``rainy day'' reserves that they can draw on when their budgets are in deficit. No such funds would be possible under the federal balanced-budget proposal.
Responding to public pressure in 1993, Congress passed a deficit-reduction plan that will reduce the federal deficit by two-thirds by 1999. More reduction still is required, but the present informed, accountable approach to federal spending and deficit reduction is the only way to preserve our democratic system of government.
A constitutional amendment to balance the federal budget is not the answer; persistent, responsible deficit reduction is.
ELIZABETH THORNTON
President
The League of Women Voters
of South Hampton Roads
Norfolk, Jan. 6, 1995 by CNB