THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, February 6, 1995 TAG: 9502030038
SECTION: FRONT PAGE: A6 EDITION: FINAL
TYPE: Another View
SOURCE: By ROBERT L. BIXBY
LENGTH: Medium: 84 lines
A balanced-budget amendment to the U.S. Constitution is a bad idea - whose time has come.
It is a bad idea because 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 really as important as being fiscally responsible and having the prudent restraint to run modest deficits only when conditions such as war and recession warrant them.
There is the additional danger that passage of a constitutional amendment will lead people to believe that the problem has been solved, when in reality the hard work will have only begun. And, finally, there are some very legitimate concerns about how terms such as ``outlays'' and ``receipts'' should be defined and ultimately how the zero-deficit requirement could be enforced.
Given these admitted problems, why has the time come to pass a balanced-budget amendment?
To answer this question you first have to answer three others:
Is our current 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.
Consider the deficit's affect on the economy. Federal Reserve Board Chairman Alan Greenspan has explained: ``Deficits are damaging because they 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.''
Economic jargon aside, what this means is that deficits of the magnitude we are now running hover over the economy like a big, wet, heavy blanket.
And what of the future? If we just get through the next few years, can we expect that the crisis will have passed?
The answer to this was provided in stark terms last year by the Bipartisan Commission on Entitlement and Tax Reform chaired by Sens. Bob Kerry, 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.
According to Kerry 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 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: ``Total budget outlays of the federal government shall not exceed its receipts.'' Congress adopted these ``Byrd amendments'' and ignored every one.
In 1985, Congress enacted the Gramm-Rudman-Hollings law in an attempt to force a balanced budget by 1991. 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, leaders of both parties seem more interested in tax cuts than in serious, specific reductions in spending. This does not bode well for advocates of self-discipline.
Amending the Constitution will not guarantee a balanced budget. But, if enacted, an amendment will change the question from whether to balance the budget to how the budget should be balanced.
Opponents make some valid points. Ultimately, however, they too must confront the fact that we cannot go on as we are, and nothing else has worked. We are left with a bad idea, whose time has come. MEMO: Mr. Bixby is Virginia state director of the nonpartisan Concord
Coalition.
by CNB