The Balanced-Budget Amendment: Panacea or Cop-Out?

19 Pages Posted: 21 Oct 2008

See all articles by George Collins

George Collins

affiliation not provided to SSRN

Peter Williams

University of Virginia - Darden School of Business

Mark R. Eaker

University of Virginia - Darden School of Business

Abstract

This case raises the issue of whether the United States should adopt a balanced-budget amendment. It is useful for discussions of fiscal policy, the role of government, and the budget process.

Excerpt

UVA-BP-0337

THE BALANCED-BUDGET AMENDMENT:

PANACEA OR COP-OUT?

On Thursday, June 11, 1992, the U.S. House of Representatives, after intense lobbying by Democratic leaders and an unusual coalition of interest groups, narrowly defeated a constitutional amendment that would have required the U.S. government to balance its budget. The vote effectively ended, for the time being, a movement that had been building steam over the previous year. Most lawmakers believed that the amendment would sail through Congress, propelled by the gale-force winds of anti-Washington sentiment in the country during the most unusual election year in recent memory.

Proponents argued that Congress failed to balance the budget and that increased discipline was needed. Amending the Constitution, they said, was the only sure way to attain the important goal of taming the national debt. With the federal budget deficit running in the range of $ 300 billion a year and no realistic plan in place for balancing the budget, Congressman Rod Chandler (R., WA) observed that, “the American people are angry. They look on in disbelief as this institution is floundering around.”

Behind the scenes, however, House Speaker Thomas Foley (D., WA) and Majority Leader Richard Gephardt (D., MO) confronted their colleagues. They argued that approval of the amendment could lead to deep cuts in Social Security—if it worked at all. Indeed, critics argued that the amendment would only add to the public's frustration. “The people are fed up, everybody knows that,” said Congressman Jack Brooks (D., TX). “But the amendment would have created only a process, not the substance of deficit reduction, and would have led to `another round of games and charades.'”

. . .

Keywords: economic policy, public administration, diversity case

Suggested Citation

Collins, George and Williams, Peter and Eaker, Mark R., The Balanced-Budget Amendment: Panacea or Cop-Out?. Darden Case No. UVA-BP-0337, Available at SSRN: https://ssrn.com/abstract=907795

George Collins

affiliation not provided to SSRN

No Address Available

Peter Williams

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Mark R. Eaker (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
703-995-2166 (Phone)

HOME PAGE: http://www.darden.edu/faculty/Eaker.htm

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
63
Abstract Views
671
rank
408,378
PlumX Metrics