Follow up Letter from National Organizations Opposing The Balanced Budget Amendment
NATIONAL ORGANIZATIONS OPPOSING THE BALANCED BUDGET AMENDMENT
November 16, 2011
The 281 undersigned national organizations strongly urge you to oppose any balanced budget amendment to the United States Constitution.
A balanced budget constitutional amendment would damage the economy, not strengthen it. Demanding that policymakers cut spending and/or raise taxes, even when the economy slows, is the opposite of what is needed to stabilize a weak economy and avert recessions. Such steps would risk tipping a faltering economy into recession or worsening an ongoing downturn, costing large numbers of jobs while blocking worthy investments to stimulate jobs and growth and address the nation's urgent needs in infrastructure and other areas.
According to a new analysis of a balanced budget amendment by Macroeconomic Advisers, one of the nation's preeminent private economic forecasting firms, if a constitutional balanced budget amendment had already been ratified and were now being enforced for fiscal year 2012, "the effect on the economy would be catastrophic." The analysis reports that if the 2012 budget were balanced through spending cuts, those cuts would have to total about $1.5 trillion in 2012 alone, which they estimate would throw about 15 million more people out of work, double the unemployment rate from 9 percent to approximately 18 percent, and cause the economy to shrink by about 17 percent instead of growing by an expected 2 percent.
Additionally, all versions of the balanced budget amendment being considered also contain a provision requiring three-fifths of the whole membership of both houses to raise the debt limit, making risk of default more likely and empowering a willful minority to hold the full faith and credit of the U.S. hostage to whatever other political demands they may have. The difficulty of raising the debt limit this summer illustrates how hard it can be to secure the necessary votes even when the consequences are so grave. Only three of the last 11 debt limit increases obtained three-fifths vote in both chambers; two of those instances occurred amidst the financial crisis in 2008 when the debt limit increases were included in larger legislation to respond to the meltdowns already occurring in the housing and financial markets, and the third occurred this August as part of the Budget Control Act and came only after a bitter process that led the nation to the brink of default.
In short, a balanced budget amendment is a recipe for making recessions more frequent, longer, and deeper, while requiring severe cuts that would harshly affect seniors, children, veterans, people with disabilities, homeland security activities, public health and safety, environmental protection, education and medical research. It would almost certainly necessitate massive cuts to vital programs including Social Security, Medicare, Medicaid, veterans' benefits and lead to even deeper cuts than the House-passed budget.
A balanced budget amendment has no place in the Constitution of the United States. Our Constitution has served the nation well because it represents enduring principles that are the foundations of our government. It should not be used as a substitute for real leadership on fiscal policy.
We strongly urge you to oppose any constitutional balanced budget amendment.