A Balanced Budget Amendment to the U.S. Constitution

The Senate’s joint resolution proposing a balanced budget amendment (BBA), S.J. Res. 10, would have amended the U.S. Constitution to require that federal spending in any fiscal year not exceed that years revenues, unless two-thirds of the members of both houses of Congress agreed to additional spending.[1] The amendment also would have capped spending at 18 percent of the Gross Domestic Product, and required a two-thirds vote by members of both houses to exceed the 18 percent cap.[2] Additionally, the bill would have required a two-thirds vote in both houses to impose new taxes or increase existing ones, and it would have required a two-thirds vote in both houses to increase the national debt limit.[3]

Because the BBA would have required that all spending be offset by revenues collected in the same yearregardless of the state of the economyadoption of the amendment would have resulted in tipping weak economies into recession, making recessions longer and deeper, and causing large job losses.[4] The amendment also would have weakened the stability of banks, thrift institutions, and some private pension systems.[5]

Additionally, the law would have jeopardized many of the programs that serve low-income Americans. Under the amendment, if revenues were to dropas they have during the current economic downturnspending on vital public programs would have to be cut immediately. By requiring cuts in spending to programs like Medicaid, the Supplemental Nutrition Assistance Program, and unemployment insurance in times of economic downturn, the amendment would have diminished these programs at the very time they are needed most. Moreover, the 18 percent spending cap would have forced drastic cuts in these programs even when the economy was healthy.[6] The BBA also would have cut Social Security benefits that Americans have earned, even if Social Security had ample reserves in its trust funds.[7] Likewise, the amendment would have interfered with the military and civil service retirement systems, which also have their own trust funds.[8]

The joint resolution did not receive the 2/3 vote required for passage.[9] The House also rejected a joint resolution proposing a different BBA, H.J. Res. 2. The House vote on H.J. Res. 2 is included in the 2011 Poverty Scorecard.[10]

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Legend

= vote to fight poverty = vote against fighting poverty = no vote