Proposing an Amendment to the Constitution Relative to Requiring a Balanced Budget

Floor Speech

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Mr. GRASSLEY. Mr. President, I have the good fortune of serving with Senator Leahy on the Senate Judiciary Committee. He is the chairman; I am the ranking Republican. In that capacity, we have jurisdiction over constitutional amendments. So I rise to support S.J. Res. 10, which is cosponsored by all 47 Republicans.

I am very pleased we are taking up a balanced budget amendment. The Senate has passed a balanced budget amendment in the past. More recently, it has come close to passing a balanced budget amendment.

I regret that this amendment has not become law. I believe that had the Constitution been amended to require a balanced budget, we would not be faced with the dire budgetary situation that is before us--a $1.5 trillion deficit for each of the last 2 or 3 years, and maybe as far as we can see into the future if we don't get things under control.

The balanced budget amendment before us is very straightforward. It provides that total outlays shall not exceed total receipts unless each House of Congress, by a two-thirds vote, agrees to do otherwise. It provides spending discipline. Total outlays cannot exceed 18 percent of gross domestic product unless two-thirds of both Houses of Congress vote to waive the cap. The President will be required to submit a balanced budget to the Congress.

To avoid balancing the budget by imposing tax burdens, new taxes or increases in total revenue can be imposed only by a two-thirds vote of both Houses, and the debt limit will be able to be raised only with concurrence of three-fifths of both Houses.

To provide a level of flexibility in wartime--and that would call for considerable flexibility because wars are never predictable--the provisions on outlays and receipts, total outlays, and the debt limit can be overcome by less than the normal two-thirds vote by a three-fifths vote.
To minimize disruption, the amendment will not take place for 5 years.

Finally, the courts cannot enforce the balanced budget amendment by ordering a tax increase.

Reverence for the Constitution is a sentiment we all share. But the Constitution provides for an amendment process. When it is necessary, each generation has amended the Constitution when a guarantee of free speech or the abolition of slavery or giving women the right to vote required a constitutional amendment. No one has said reverence for the Constitution was the end of the matter.

We have reached that point of necessity with the balanced budget amendment. The Congressional Research Service reports--and I wish to quote a fairly long quote:

The budget deficit each year from 2009 to 2011 has been the highest ever in dollar terms, and significantly higher as a share of GDP than at any time since World War II. Under current policies, the Federal debt is projected to grow more quickly than the GDP, leading observers to term it unsustainable.

That is the end of the quote from the CRS.

The very purpose of the Constitution, according to its preamble--and I know the preamble is not governing on anything we do or what the Supreme Court does, but it shows intention--the preamble was meant to extend the blessings of liberty to ourselves and our posterity--and I want to emphasize that word ``posterity.'' It is because the growth in the national debt is unsustainable, as I read from the Congressional Research Service, that our posterity may not receive the blessings that several generations of Americans so far have received. It is hard to imagine an amendment more in keeping with the goals of the Constitution than this one. Otherwise, runaway debt will expand exponentially. A permanent spiral can be created in which the debt feeds on itself. We are kind of in that spiral right now. Is it permanent? I sure hope not.

Take a look at Europe today, where we ought to learn lessons about the lack of fiscal soundness. Nations there risk default when they overspend, and they are in that position of almost default now. If we are not careful, our country, the United States, at some point will face the same crisis. It is frightening to contemplate, and particularly frightening as a threat to the blessings we ought to give to generations after us.

We hear from opponents that Congress can balance the budget now without a balanced budget amendment, but the fact is it cannot. For more than 40 years, Congress has been unable to summon the ability to balance the budget. Statutes that sought to provide a path to a balanced budget failed.

Let me speak here about a personal involvement I had when I was a Member of the other body, working with Senator Harry Flood Byrd of Virginia. The Byrd-Grassley amendment was adopted in either 1979 or 1980. It was a statute that was just a few words. It said Congress can't spend any more money than it takes in.

Do you know what happened? For several years after that until it was finally repealed in the early 1990s, Congress delayed it for a year at a time as part of the appropriations process. So statutes are not a good way of making this happen. Gramm-Rudman was probably a little more successful, at least once or twice, but it soon was repealed. By putting something in the Constitution requiring a balanced budget, it is going to discipline Congress in a way that statutes cannot provide discipline; in other words, a constitutional amendment will succeed where statutes have been proven to have failed based upon the examples I gave and other examples that can be given.

The only exception was when we had 3 years going into this century when a financial bubble provided windfall revenues. We all know about that. I believe it is $568 billion we paid down on the national debt for 4 fiscal years after a Republican Congress was elected in 1994.

Anyway, except for that, we have not been able to have very sound fiscal policy. Then because Congress has been unable to control spending, the budgets have been in deficit and the national debt has increased. The only way Congress will exercise the discipline to balance the budget is if the Constitution forces it to do so.

We can say this from some experience, particularly if you believe the States are the laboratories of our political process and of government policy, because 46 State constitutions require their budgets to be in balance. They meet that requirement. As Members of Congress, we do take an oath to adhere to and defend the Constitution. We take that oath seriously. If the balanced budget amendment became part of the Constitution, we would adhere to it or face the consequences from the voters.

This amendment wisely contains effective tax limitations as an integral part. I have favored a balanced budget with tax limitations for more than 20 years. For decades, Federal spending has far outpaced even the steady and sizable growth in taxes and revenues. Raising taxes does not produce surpluses. The historical fact is they spur more spending. For every additional dollar in taxes Congress has raised since World War II, it seems as though it has given us a license to spend about $1.13 for every $1 that has come in for additional taxes.

Don't take my word for that. A person who studied that for a long period of time, Professor Vedder, of Ohio University, has written about that. You will find his figures just about the same. I think he said on average since World War II, $1 coming into the Treasury was a license to spend $1.17 instead of the $1.13 I give here.

Raising taxes, then, would make balancing the budget harder, not easier. Bring a dollar in here, spend $1.13. You hardly get ahead. It seems we cannot ever reach an agreement of how high taxes have to be in this body to satisfy the appetite of Congress to spend money. That is not just a Democratic problem, that is a problem on both sides of the aisle here in Congress.

That brings us to this issue about a supermajority requirement for tax increases. A balanced budget amendment may well encourage tax increases, fueling greater spending and the continuation of additional debt and costs in servicing that debt. The failure to balance the budget is a fiscal issue of greatest importance.

But getting back to our obligations to posterity under our Constitution, it is also a moral issue. Maybe the moral aspects of it are more important than the economic aspects of it. Without a balanced budget amendment, our children and grandchildren will pay for this generation's chronic inability to live within its means. We live high on the hog and worry about our children and grandchildren paying for it.

In the absence of an amendment, the standard of living of future generations will likely decline. The fears of many Americans that the next generation will not live as well as this one are in many respects traceable to decades of fiscal irresponsibility on the part of Congress. This balanced budget amendment would mean a stronger economy. It would surely mean good government, as fiscal responsibility ought to be a part of good government. Obviously people are concerned now about the problem of jobs. Employers are particularly concerned that Congress does not have a sound fiscal policy. That leads them not to hire anybody. A balanced budget is going to mean more jobs.

I believe the American people are willing to do their part to prevent future generations from being saddled with an unconscionable level of debt. They are willing to do so even if it means that some Federal spending they support would be affected. This is especially true if our budgeting is done fairly.

I believe if one listens closely to the arguments of the opponents of this measure, one will hear more arguments against a balanced budget than against a balanced budget amendment. There will need to be difficult actions taken. It is those difficulties that have prevented Congress from balancing the budget. Those difficulties are, therefore, reasons for a constitutional amendment, not reasons against a constitutional amendment. But balancing the budget is necessary and it will take an amendment to the Constitution of the United States of America to make sure it is done consistently.

We also hear arguments about the need to run deficits when the economy is in a recession. That kind of brings us to where we are right now. We have been in a recession for 3 years. The amendment before us permits Congress to vote to run a deficit in that situation, but be skeptical of that argument. If deficits and debt gave

us a strong economy, right now we would be in the midst of the greatest economic boom in our history. Obviously we are not in that economic boom. Deficits of $1 trillion-plus and a national debt of $15 trillion are not stabilizing the economy in the way that people who argue that maybe in a time of recession you ought to have a lot of deficit spending have claimed.

In fact, I believe the size of the deficit and debt is one reason the economy is not performing well. The size of looming deficits and debt is another. The markets are not viewing the debt as stabilizing a weak economy. Rather, they view it correctly as a drag on the economy. That is why jobs are not being created. That is why corporations have $1 trillion in their treasuries in the United States, $1 trillion in their treasuries overseas, $2 trillion that is not being spent, that is not making corporations any money. It is lying there. They want to invest it in jobs and machinery and get the economy going and make more money.

On the issue of enforcement, the opponents attack straw men. They say either that the amendment cannot be enforced, so it is toothless, or they say the courts will enforce it, leading to chaos. Both of these arguments cannot be true. This amendment will be enforced by the President submitting a balanced budget and Congress complying with the amendment, as do State legislators all over the country. Members take an oath and voters will punish those who do not obey the constitutional command.

With respect to the courts, the text of the amendment prohibits courts from raising taxes. Of course, judicial standing requirements, ripeness, and the doctrine of political questions will mean that the courts will continue to lack the power of the purse, as has been the case throughout 225 years of history of our country.

In the past dozen years, Congress has been unable to balance the budget even when times are good. Had we passed a balanced budget amendment when it was before us in the past, we would not have racked up the huge deficits that now confront us.

We have heard in the past that a balanced budget amendment was not necessary because Congress could balance the budget on its own. We know how successful Congress has been doing that. Those arguments were wrong. Today we face one of the worst debt pictures in our history. If nothing is done, the future will be even worse. We owe a responsibility to the American people and to future generations to maintain the fiscal discipline that has allowed us to be the world's biggest economy.

Our pleas for a balanced budget amendment have been denied by its opponents in the past. We warned at that time what road lay ahead if we failed to pass a balanced budget amendment. Time has unfortunately proved us right. It is not too late if we act now, but time is growing shorter each year.

I urge my colleagues to do the right thing and enact a constitutional requirement that the budget be balanced.

I yield the floor.

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