Imagine that Congress passes, and the president signs, legislation requiring the budget to be balanced within a decade. What's to keep Congress from ignoring that legislation and breaking its promise down the road?
A future Congress could simply pass new legislation that nullifies the law. Even if the law had some kind of enforcement mechanism, like automatic tax hikes, the mechanism could be repealed in the new legislation.
This is constitutional, and legal challenges against ignoring the legislation would likely fail.
That's why durable reforms to the budget process must be done using constitutional amendments.
The House Budget Committee held a hearing Tuesday about reforming the way it writes budgets. Among those testifying in the hearing was David Primo, a senior scholar at the Mercatus Center and one of my old political science professors at the University of Rochester. Primo told attendees what I remember him telling students: The budget process is broken, and well-designed rules must be added to the Constitution to fix it.
"The most effective way to ensure durability is a constitutional amendment placing external, enforceable limits on Congress's ability to tax and spend," Primo said in his written testimony. "A constitutional amendment would counteract the temptation to circumvent rules, and it would also provide a foundation on which the new budget process could be built. In the absence of a constitutional amendment, enforcement options will be much more limited, and success will depend heavily on leadership within the executive and legislative branches."
The sequester is a useful example of how legislative budget rules can aid the budget process but can't be enforced forever.
First, the sequester budget cuts happened in March 2013. Today, the sequester remains in place. Congress could simply choose to ignore the sequester cuts and raise spending above sequester limits. But many conservatives would criticize Congress for raising spending and not following the rules it set for itself. That criticism may be an effective tool for now, but it could wear off in the future.
A balanced budget amendment is the most frequently discussed kind of budgetary amendment. House Budget Committee Chairman Tom Price, R-Ga., told Primo that he would support a balanced budget amendment to the Constitution but that approval of such an amendment seems unlikely in the near future. While that's true, any kind of amendment that would limit the budget deficit or government spending would be useful.
A constitutional amendment could be written that would limit spending or the budget deficit to a certain portion of the economy. Although a balanced budget amendment might be superior, an amendment limiting the deficit to 1.5 percent of GDP would still be useful, given that today's deficit is 2.7 percent of GDP.
A budget amendment could also be flexible and conditional on economic factors. For example, an amendment could allow for more government spending in a recession or when unemployment rises past a certain point.
An amendment could also allow for more defense or other spending when Congress formally declares war. Similarly, an amendment could allow for federal aid dollars to flow to areas affected by disaster.
While a balanced budget amendment might be the easiest kind of budget amendment for voters to understand, plenty of other useful options can be thought up with a little creativity.