As the United States appears on track to add $19 trillion to the national debt over the next decade, Republican senators from Utah and Iowa reintroduced a balanced budget amendment Thursday.
Sen. Mike Lee, R-Utah, and Sen. Chuck Grassley, R-Iowa, want to amend the Constitution to require the federal government to balance its budget each year. Lee has long pushed for binding, structural spending reforms embedded in a constitutional amendment.
“Every household in America must balance its checkbook,” according to Lee. “Surely the government should do so as well.”
In his first Senate Budget Committee hearing Wednesday, Lee attributed the national debt to runaway government spending and said the federal budget has never been in a “worse state of disrepair.”
Congress can’t rely on self-imposed, statutory spending limits that lawmakers can waive with a simple majority, Lee said.
“To restore fiscal responsibility, we must enact a permanent structural spending restraint. If we want to eliminate deficits, reduce the national debt, reduce spending, preserve our constitutional priorities, and save our economy, it starts with the balanced budget amendment. It is the only solution that guarantees the enforcement of future reforms,” he said Thursday in a statement.
Proposed balanced budget amendments go back decades in Congress. The late Republican Utah Sen. Orrin Hatch introduced such a resolution more than two dozen times during his 42 years in the Senate.
Lee and Grassley say a balanced budget amendment is needed now more than ever. They also introduced the amendment in 2019.
The national debt, now at more than $31 trillion, has for the first time since World War II reached 100% of GDP, meaning the federal government will soon owe more in debt than the annual size of the American economy, according to the senators.
That number is projected to double to 200% by 2050, when net interest payments will be the single largest budget item, exceeding the size of Social Security and Medicare.
According to the Congressional Budget Office, the country is projected to add $19 trillion to the deficit over the next 10 years, $3 trillion more than previously forecast, as a result of rising costs for interest payments, veterans’ health care, retiree benefits and the military.
New forecasts, released Wednesday, project a $1.4 trillion gap this year between what the government spends and what it takes in from tax revenues. Over the next decade, deficits will average $2 trillion annually, as tax receipts fail to keep pace with the rising costs of Social Security and Medicare benefits for retiring baby boomers, The New York Times reported.
Lee’s amendment would force Congress to balance its budget each year, limit spending to no more than 18% of GDP and require a supermajority vote in both the House and Senate before raising taxes or increasing the nation’s debt ceiling.
Perpetual deficits and debt debilitate economic growth, according to Lee and Grassley. For all the gains realized through economic expansion, debt and deficits rob the American people of their future.
In a 2018 analysis, the Center for Budget and Policy Priorities, a progressive think tank in Washington, D.C., said a balanced budget amendment would be an unusual and economically dangerous way to address the nation’s long-term fiscal problems. It also would raise a host of problems for the operation of Social Security and other federal programs.
“By requiring a balanced budget every year, no matter the state of the economy, such an amendment would raise serious risks of tipping weak economies into recession and making recessions longer and deeper, causing very large job losses,” according to the center.
“That’s because the amendment would force policymakers to cut federal programs, raise taxes, or both when the economy is weak or already in recession — the exact opposite of what good economic policy would advise.”