This week on Facing the Future, Kurt Couchman, senior fellow in fiscal policy at Americans for Prosperity, explained why he thinks a balanced budget amendment to the Constitution is needed to restore a fiscal responsibility norm on Capitol Hill. Couchman, a former Capitol Hill staffer, is the author of the newly released book, Fiscal Democracy in America: How a Balanced Budget Amendment Can Restore Sound Governance.
Calls for a Balanced Budget Amendment (BBA) to the Constitution tend to arise when federal budget deficits reach alarming heights and debt projections look unsustainable. That’s a good description of where we are now. Couchman recommends, however, that policymakers should learn from past failed attempts to enact a BBA before they take up the issue again.
One of the most important lessons, he said, is that “if you have provisions in your BBA proposal that one side or the other really doesn’t like, then you’re dead in the water, because it takes two-thirds of both houses of Congress and three-fourths of state legislatures to pass and then ratify a constitutional amendment. So you just have to focus on the basics and do them in a way that makes sense.”
Coming from the conservative side of the political spectrum, Couchman noted that, “a lot of conservatives believe that a balanced budget amendment is a vehicle to enshrine conservative fiscal and economic policy forever. And I think that’s a mistake, because I don’t even know if you get majority support for that, I suppose it depends on the Congress. But you certainly don’t get two-thirds supermajority support in Congress to send a BBA proposal to the states, and you don’t get three-fourths of state legislatures to approve that. You need to have something that is neutral, predictable, stable, a real tool for governance that encourages Congress to fix its budget process so that it’s possible to reach and stay in balance, while also representing the vast diversity of the American people.”
He also said that striving for “annual balance doesn’t make a whole lot of sense. You want to balance over the medium term, or the business cycle. Budget wonks call it structural balance. That’s exactly what Switzerland and Sweden and lots of other places do.” Emergency relief should be allowed with a two-thirds vote for situations such as war, recession or a pandemic.
“Another thing is you need a reasonable period of time to get to balance,” he continued. “I think a decade is probably the best that we can do. And then the question is, what kind of balance? Is it primary balance, where you don’t count interest costs, or is it full balance, where you do count interest costs? It’s a question of feasibility versus effect. Primary balance would stabilize the debt burden for a while, but then we’d probably have to go to primary surpluses in order to really get the debt burden down into the safety zone.”
Couchman advocates what he calls a “principles-based balanced budget amendment” that doesn’t try to put in all the mechanics. “Most constitutional provisions,” he said, “are broad principles that we could all agree on, or at least the founding generation could agree on, and it takes statutes to clarify what the details are and how they actually work in practice. If you look at ‘to raise and support armies,’ that’s a couple of words. There’s thousands of words of statute that clarify what that means, how it’s done. And so the principles-based BBA takes that approach. The core line of it is that revenue and expenditures shall be balanced, which may occur over more than one year. So that raises a lot of questions, right? And you need implementing legislation to fill that in. That’s a broad principle that we should be able to reach consensus on, and future generations, for all time to come, should be able to agree that that’s a pretty reasonable thing to do.
“When you think about the implementing legislation for that, there’s two pieces. There’s the targets and the enforcement, and then there’s how do you have a budget process that will empower Congress to turn all the different dials you need, get the bipartisan consensus on what those are, strike the deals, and make it happen?”
Hear more on Facing the Future. Concord Coalition Senior Advisor Bob Bixby hosts the program each week on WKXL in Concord N.H., and it is also available via podcast. Join us as The Concord Coalition team discusses issues relating to national fiscal policy with budget experts, industry leaders, and elected officials. Past broadcasts are available here. You can subscribe to the podcast on Spotify, Pandora, iTunes, Google Podcasts, Stitcher, or with an RSS feed. Follow Facing the Future on Facebook, and watch videos from past episodes on The Concord Coalition YouTube channel.
