The Phony Balanced Budget Amendment Debate | Capital Gains and Games
Next week, House Republicans plan to debate a balanced budget amendment to the Constitution. Although polls show overwhelming public support, it is doubtful that many Americans realize that the measure to be debated is not, in fact, a workable blueprint to enforce a balanced budget. In fact, it’s just more political theater designed to delight the Tea Party.
Historically, those supporting a balanced budget amendment to the Constitution were only interested in balance per se. That is, requiring that revenues and expenditures be as close to equal as possible. The view was that if the states – almost all of which are required to balance their budgets annually – could do it then so could the federal government.
One problem is that the states don’t really balance their budgets. All have separate operating and capital budgets and only the operating budget is required to be balanced. By contrast, the federal budget lumps together operating and capital expenses, such as roads and buildings that will last for decades. Moreover, the states are notorious for using gimmicks to give the appearance of budget balance even though they run deficits.