Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, March 10, 1994 TAG: 9403120001
SECTION: EDITORIAL PAGE: A-12 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
All sorts of problems arise when you try to write details of economic policy into the Constitution, not least of which is the harm it could do to the concept of the Constitution as a fundamental law that transcends the wishes of transitory legislative majorities.
Another is the harm it might do the American economy. As much as deficit reduction is a pressing need today, balanced federal budgets year after year - and permanence, after all, is the point of putting something into the Constitution - could be ruinous.
A third problem is defining the term "balanced budget." One example: If the finances of states with balanced-budget provisions in their constitutions were figured the way federal finances are, with long-term capital outlays figured as operating costs, few would have balanced budgets.
Besides, budgets by nature are projected estimates, not hard and fast numbers. A federal balanced-budget amendment would encourage rather than deter rosy scenarios and budgetary smoke and mirrors, and deter rather than encourage fiscal accountability.
Writing economic policy into the Constitution amounts to an open invitation for the unelected judiciary to intervene in economic policy-making, a task for which it is not trained or suited. Plus, the amendment as proposed in Congress would require 60-percent majorities, rather than the current simple majority, to raise taxes - thereby making a balanced budget f+ilesso achievable, not more.
The need for deficit reduction is urgent - too urgent to waste time on constitutional amendments that won't do the job and wouldn't go into effect until after most now in Congress have left office. The need is urgent, to stanch the flow of federal spending on the biggest entitlement program of them all: servicing the massive public debt.
Keep in mind: Most of that debt is the residue of wild-spending conservative Republicans in the White House.
As a fraction of gross domestic product, the national debt declined in the 1960s, leveled off at about one-third through the '70s, then mushroomed in the '80s during the big-deficit years of the putatively conservative Reagan administration. By the mid-'80s, it had risen to more than half the size of the gross domestic product; by 1992, to more than two-thirds.
Debt service - transfer payments, that is, from U.S. taxpayers to U.S. government creditors, many of them foreigners - now takes up more than 20 percent of federal spending, and is about 5 percent the size of the American economy. Both percentages are double what they were in the years before 1980. Meeting the interest-payment demands of old debt fuels the big deficits that create new debt.
The Clinton administration has made deficit-reduction progress. In nominal dollars, the 1993 deficit was the smallest since 1990; as a percentage of gross domestic product, smaller also than those from 1983 through 1986. If the economy continues to grow at an annual rate of 3 percent, and if the deficit gets knocked down to the projected $190 billion by 1995, the deficit as a percentage of gross domestic product would be back down to pre-1980 levels.
Those, however, are big ifs. Worse, the result would be only to slow, and not to stop, the continued climb of the federal debt (currently $4.5 trillion) as a percentage of gross domestic product.
Conservatives, of course, have no monopoly on fiscal irresponsibility. Once regarded as the kookie pet of the ideological right, the balanced-budget constitutional amendment had as its chief Senate sponsor this year Paul Simon of Illinois, a liberal Democrat. Though the proposal is dead for now, having failed by four votes last week to win the required two-thirds majority in the Senate, the Democrat-majority House is expected to pass it soon, as it did last year. A vote for it looks good on the old campaign resume.
Too, support for the middle-class subsidies that contribute heavily to the debt/deficit difficulty transcends ideological and partisan lines. If you're a Western senator, regardless of party, you oppose raising the absurdly below-market fees for grazing livestock on public lands. If you're a House member from a rural Midwest district, regardless of party, you block any effort to put agribusiness on a diet. Other interest groups are greedy, one's own is entitled, whatever the fiscal damage.
To that, add a political atmosphere in which even a paltry increase in the federal gas tax could be held up as the greatest assault on American pocketbooks since the Stamp Act. The answer to big deficits is attitude adjustment, not constitutional amendment.
by CNB