This week, Rep. Ben McAdams (D-Utah) announced he’ll be floating a proposal for a constitutional amendment to balance the federal budget. His proposal has the backing of 27 other House Democrats.
Bloomberg first reported on Rep. McAdams’ plan to roll out a resolution calling for a Balanced Budget Amendment, which has since been endorsed by the corporate-friendly Blue Dog Coalition. Under the language of McAdams’ resolution, the federal government would require to balance its budget every year, although deficit spending would be allowed in the event of a war, or a recession.
While McAdams said a Balanced Budget Amendment is necessary, saying both parties have “acted in a way that is fiscally irresponsible,” actually implementing it would have drastic consequences for numerous essential government agencies. And at the macro-economic level, it could even have potentially catastrophic consequences for the economy.
According to the Center on Budget and Policy Priorities — a left-leaning economic policy think tank — implementing a Balanced Budget Amendment would mean Congress would have to either raise taxes or cut federal budgets every year. And given the political difficulty of tax increases, it’s likely lawmakers would lean more toward budget cuts than increasing revenue. The resulting job losses would, according to a 2012 analysis by a prominent economic forecaster, push the economy toward a lengthy recession:
If a such an amendment had been ratified when Congress last voted on these proposals and had been enforced for fiscal year 2012, “the effect on the economy would be catastrophic,” Macroeconomic Advisers, one of the nation’s preeminent private economic forecasting firms, concluded at the time. It would have caused the unemployment rate to double from 9 percent in that year to 18 percent by throwing an additional 15 million people out of work, according to the firm. Not only that, “recessions would be deeper and longer” under a constitutional balanced budget amendment…
Despite the dire economic consequences, the Blue Dog Coalition has endorsed a Balanced Budget Amendment. Its members are listed on its website and is chaired by Rep. Kurt Schrader (D-Oregon), whose #2 career donor is the pharmaceutical industry. Rep. Charlie Crist (D-Florida), who used to be the Republican Governor of Florida, is also one of the coalition’s members.
But perhaps the most famous Democrat to endorse the proposal is former Vice President Joe Biden. As the Los Angeles Times reported, then-Senator Biden got behind the idea nearly 25 years ago.
“I have concluded that there is nothing left to try except the balanced-budget amendment,” Biden said.
Carl Gibson is a politics contributor for Grit Post. His work has previously been published in The Guardian, The Washington Post, The Houston Chronicle, Al-Jazeera America, and NPR, among others. Follow him on Twitter @crgibs or send him an email at carl at gritpost dot com.