Proposal to amend the Constitution falls short in House

A balanced budget amendment to the Constitution went down to defeat in the House on Thursday after conservatives failed to garner the supermajority needed to send it to the Senate.

The vote was 233-184, short of the two-thirds majority needed for passage.

While fiscal hawks in Congress backed the proposal — which would require Congress not to spend more than it brings in — Democrats argued the vote was a gimmick to help Republicans save face amid an explosion in federal deficits.

“This balanced budget amendment is supposed to trick people into believing Republicans still care about fiscal responsibility,” Rep. Jim McGovern (D-Mass.) said on the House floor Wednesday. “At every turn, House Republicans favor the well-off and well-connected, while ignoring the needs of those in the middle and working class and are certainly turning their backs on those struggling in poverty.”{mosads}

Other critics argued that enacting the amendment could backfire, restricting the government’s ability to spend during recessions.

Under the amendment, Congress would have to have a “true majority” in both chambers to approve tax increases and a three-fifths majority to increase the debt limit.

The bill was brought to the floor under an agreement made between Speaker Paul Ryan (R-Wis.) and Republican Study Committee Chairman Mark Walker (R-N.C.) in October. The Speaker agreed on a vote in exchange for conservative support needed to overcome a procedural hurdle paving the way for the party’s signature tax reform.

For Republicans who campaigned on a platform of fiscal responsibility, the vote in favor of the amendment may be an attempt to show voters that they remain serious about trying to reduce the national debt.

That commitment was called into question after Congress last month passed a $1.3 trillion funding package that shattered budget caps — a move that came on the heels of last year’s passage of a tax package that is also projected to add to the deficit.

A new report from the Congressional Budget Office this week found that the combination of the bipartisan spending bill and the GOP tax cuts would send deficits skyrocketing past $1 trillion by 2020 and increase the national debt burden to its highest level since World War II by the end of a decade.

By 2025, interest on the debt alone is projected to cost more than defense or nondefense discretionary spending.

With Republicans facing a tough midterm election environment, members are eager to boost their fiscal credentials.

House Republican leaders have floated passing rescission bills that would claw back parts of the spending package passed in March, but the future of that push is uncertain. Leading appropriators are critical of the idea, wary of going back on a deal that was struck to secure Democratic votes.

Sen. Bob Corker (R-Tenn.) this week called both the rescission plan and the balanced budget amendment “window dressing,” saying neither one had a chance of passage.

Conservatives have pushed for years to add a balanced budget amendment to the Constitution, but the hurdles in their path are high.

The Constitution has only been amended 27 times in the nation’s history. Outside of a constitutional convention, an amendment must receive a two-thirds majority in both the House and Senate and then be approved by three-fourths of the state legislatures. The last successful amendment was in 1992, when states ratified a 202-year-old proposal to delay congressional pay hikes.

Debates about the role of debt stretch as far back as the nation’s founding, and attempts to limit borrowing through a constitutional amendment date back to the 1936. A 1982 attempt at a balanced budget amendment passed the Senate, but fell short in the House; a subsequent attempt in 1995 had the reverse outcome.

Many economists are wary of an amendment that would put a straightjacket on fiscal policy. Running short-term deficits during recessions can blunt the effects of a downturn, and a balanced budget amendment could eliminate that tool, essentially forcing the government into austerity.

“It’s a very bad idea for a number of key reasons, the most important of which is that it’s bad, not good, for the U.S. economy to have to balance its budget. It’s essentially the same as kicking the economy when it’s down,” says Richard Kogan, a senior fellow at the left-leaning Center on Budget and Policy Priorities.

Further, said Kogan, the “ideal” level of debt may not zero, but rather a sustainable amount relative to the size of a nation’s economy. Even many fiscal conservatives advocate for policy that carves out a path to reducing the overall debt burden instead of eliminating it altogether.

“The reality is sufficiently complex for economists to not know what the right level is, or more specifically, that the right level changes with circumstances,” says Kogan.

Budget watchdogs decried the attempt to pass the amendment as an empty gesture.

“Anyone supporting a balanced budget amendment should also have a plan to achieve a balanced budget and support efforts to implement such a plan; otherwise, it is not a serious proposal,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

An analysis of balanced budget amendments from the Peter G. Peterson Foundation, another fiscally conservative watchdog group, noted that budgets and deficits arose from “many points of view about government’s role and, within those roles, the nation’s priorities. … By itself, the amendment cannot resolve these underlying policy differences.”