Despite the failure Thursday of the U.S. House of Representatives to muster the two-thirds majority needed to pass it, the proposed constitutional amendment to require a balanced federal budget has accomplished at least one thing:
It has focused public attention as never before on a government spending spree whose dimensions should unnerve even the most placid of taxpayers.Since Washington has persistently ignored laws requiring a balanced budget, there was little reason for hoping that much more impact would have been made by an amendment.
What's needed, in any event, is not an amendment but sheer willpower on the part of the public as well as political leaders.
Whichever way the task is approached, consider the sobering dimensions of the problem:
- The federal government has not had a balanced budget since 1969. As a result, the deficit currently stands at $400 billion while the national debt comes to $3 trillion.
- This means that the deficit is growing $756,000 every minute, $45 million an hour, or $1 billion a day.
- This fiscal year the federal government will spend more on interest on the national debt (some $304 billion) than it will on defense programs, which will cost $298 billion.
- If the federal government were to pay off its debt in one lump sum today, the tab would come to $15,500 for each man, woman and child in the country.
Now consider just how painfully difficult it would be to start taking big bites out of the deficit:
- One popular proposal is to slash military spending. Forget about the impact on national security. Even if defense spending were completely eliminated, the savings would still fall $100 billion short of wiping out the deficit.
- Another persistent suggestion is to eliminate waste. Certainly there's no shortage of federal flab. But even if Washington eliminated all domestic spending, not just the wasteful kind, the savings would still reduce the deficit by only slightly more than half. Eliminating every cent of foreign aid would save only another $21 billion.
- As the recession fades, economic growth should help cut the deficit by increasing federal revenue and reducing government expenses for such programs as unemployment compensation. But the Congressional Budget Office reports that even at the height of the boom in 1989, the deficit fell only to $154 billion. Once the economy turned sour, the deficit went right back up again.
- How about biting the bullet and accepting a tax increase? It would have to be a historically stiff tax hike. Cutting the deficit in half in one year would require a 37 per cent tax increase.
- Just close tax loopholes? Fine. But how many taxpayers are willing to give up their deduction for mortgage interest payments, a reform that would raise $35 billion? And how many would be happy about losing the federal deduction for state and local taxes, a change that would raise $3 billion?
In principle, balancing the budget is really quite simple. Either taxes must be increased or spending must be slashed. Neither would be painless or popular. The only sane approach would be a combination of both, which also would hurt.
All things considered, what's needed is not a constitutional amendment. Instead, what needs amending is the attitude of a public that keeps demanding more and more government programs without higher taxes. Americans simply cannot have it both ways - not if they want to get the federal budget out of the red. That's what they should want. But do they really?