StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between

Dopiest Constitutional Amendment of All Time?

31 Mar 2011
Posted by Bruce Bartlett

Today, all 47 Senate Republicans introduced a constitutional amendment to balance the federal budget. Full text available here. Presumably, this is the amendment that Republicans plan to demand as their price for increasing the federal debt limit. Of course, simply refusing the raise the debt limit would balance the budget overnight -- the nation would default on its debt and we would be plunged into the worst fiscal crisis in history, but the budget would be balanced. I have previously explained the idiocy of right wing advocates of debt default (here and here) and the idiocy of a balanced budget amendment (here and here). However, the new Republican balanced budget proposal is especially dimwitted. Let me focus on just one provision, Section 2:

Total outlays for any fiscal year shall not exceed 18 percent of the gross domestic product of the United States for the calendar year ending before the beginning of such fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific amount in excess of such 18 percent by roll call vote.

This is really mind boggling in its insanity. It appears to say that outlays in fiscal year 2012, which begins on October 1, 2011, may not exceed 18 percent of GDP in calendar year 2010, since that is the last full calendar year before the beginning of the next fiscal year. I assume that is so that members of Congress will have a guide for the coming year's appropriations. Right at the moment, we think GDP was $14,657.8 billion in 2010, so that means that outays in FY2012 could not be more than $2,638.4 billion. But GDP generally rises over time. The CBO expects that calendar year 2012 GDP will be $15,858 billion. Assuming that Congress was somehow or other able to meet its spending target of $2,638.4 billion, that would equal just 16.6 percent of calendar 2012 GDP. The same thing would happen year after year, forcing down spending as a share of GDP under the guise of balancing the budget.

I won't repeat all of my previous criticisms of the balanced budget amendment that can be found in the links. But let me discuss one other thing. The gross domestic product is not a concept defined in law and is revised constantly; from time to time, the Bureau of Economic Analysis revises the GDP data all the way back to 1929. And of course, the 18 percent figure is totally arbitrary; the proposal effectively assumes that all federal outlays consist of funds that are appropriated annually, rather than consisting primarily of mandatory programs such as Social Security, Medicare and interest on the debt. Even if Congress was willing to cut mandatory spending, it is practically impossible to do so quickly unless it is willing to reduce the monthly checks going to current retirees and other actions difficult to contemplate.

In short, this is quite possibly the stupidest constitutional amendment I think I have ever seen. It looks like it was drafted by a couple of interns on the back of a napkin. Every senator cosponsoring this POS should be ashamed of themselves.


The point I was trying to make by calling this amendment stupid was mainly about the incredibly slipshod and amateurish way it was drafted. As I have explained previously, I think a BBA is a really bad idea, but in principle it is not necessarily a stupid idea. If Senate Republicans had bothered to ask people who know something about such things they could have drafted an amendment that put in place budgetary procedures that might possibly have improved our nation's fiscal situation. But they didn't do that; they threw together some slapdash POS that was designed solely for the purpose of appealing to ignorant Tea Party types. At least that's what I think happened. What's really worrisome is that the senators are serious about this idiotic amendment, really believe it's a good idea, and will work hard to get it enacted. That's how we ended up with Prohibition.

Good comments from Ezra Klein and Jonathan Bernstein. I am reminded that I previously posted a pretty good list of academic articles on the subject of a BBA a while back. A friend has called my attention to this really good Robert Bork article about amending the Constitution from back in the days when he wasn't pandering to right wing nuts. Dave Weigel interviews Sen. Rand Paul and he endorses the idea of balancing the budget through debt default.

No Need to Cut Mandatory Programs

The RepubliCons can easily reach the 18% goal by cutting the Defense Department's budget each year. In fact, within a few years, the DoD's budget will be zeroed out entirely! Now that should be interesting.

Can you say Banana Republic

WOW WOW WOW. The sad part of all of this, is someone paid for their higher education. What a return on their investment. We should send each one a "Banana" because we are heading towards a Banana Republic faster than they can pass a free trade agreement.

These senators are not

These senators are not idiots, and they are 100% aware of how stupid and absurd this amendment is, and also that it has absolutely zero chance of ever being approved or ratified. It is nothing more than pandering to teabagger imbeciles.

Just to be clear, I don't

Just to be clear, I don't think this is any more sane than you do. What's not clear is your argument that this would drive down spending as a share of GDP. Assuming constant GDP growth, pegging the budget to GDP(n-2) just means the actual ratio of budget-to-GDP in any given year is 16.2 rather than 18 percent. What am I missing?

I was confused by that too.

I was confused by that too. The formula for spending as percentage of current year GDP is something like 18% divided by (1 + nominal growth rate)^2. Population growth, inflation and real economic growth all work to slow the growth of spending as a percentage of GDP. For example, nominal GDP grew 10.81% per year during the 70s. So during the 70s, this law would typically reduce spending to 14.66% of GDP.


...What happens the year after a system shock like a recession?

And does outlays include things paid for by fees or special taxes, like tolls for bridges, parks, SSDI or social security?

The American People

are getting the government they deserve.

Sleeping Dog on target

Americans are so badly uninformed
They get misinformation 24/7 via TV
They are not educated.
It is amazing
Ok for zillionaires to get Social Security and Medicare. "They paid for it"

There are no LEADERS who will inform the people
Those programs were designed to lift elderly poor out of povery into decent standard of living. Each worker put few pecos in pot.

Medicaid Is Means Tested For the Poor????

Why not Means Test for the Rich???

Want fun! Try getting SS to give numbers of those gettting SS with incomes $200,000 and up and how much total they get. Ha! I got tired of asking.
Dear pal Income over one million got it- Rationale "I paid for it" BS

Workers pay 6.2% of Total Income
Important to one making $15,000.

One making 10 Million pays 1% not 6.2%
100M pays 1/10th of one percent
Billionaire pays 1/100th of one percent.

It is unfair.It is dumb.Warren Buffet paid smaller perent than his secretary.

FAIR FAIR ALL pay same Percent of Total Inocme.
6.2% hurts lower incomes more than those with highest incomes.

clarenceswinney olduglymeanhonest mad mad mad at Inequality in America
comments welcome

Nice rant

Nice rant, next time, try to use even more ad-homonym attacks, it really helps make you sound credible. Oh, and through in a few more "stupid"s or "idiot"s as well, this was okay for a temper-tantrum, but you can do better if you really want to be taken as a credible writer. Still, this is a really valuable addition to the political echo chamber that's been feeling a little too empty these days.

Sarcasm aside, the meaning of your arguments are completely wasted here because the childish manner in which it's delivered. You'll have a host of comments from folks who already hate Republicans about how right you are, a handful from Republicans about how you don't understand the real problems, and you probably won't convince anyone on the fence. As such, I hope writing this was therapeutic, as that's likely to be the extent of this blog's positive impact.


What's the point of a blog unless it is to rant? Anyway, I've given up hope of changing the minds of right-wingers.  

Actually, I think you

Actually, I think you underestimate the positive impact of todays blog. I'm going to send it to AARP; and it should effectively prevent the election of any future Republicon majority in our lifetimes.


Ad homonym? Against words that sound the same? :)

I think you mean "ad hominem"

Against homonyms

Well, since he also says Bruce should "through in a few more 'stupid's or 'idiot's," clearly the chap does have an adversarial relationship with homonyms. Although come to think of it, you'd have to have a pretty funny accent for "through" and "throw" to sound the same.

Even words are not sacred

It's entirely possible that Chad meant ad homonym.

Bruce makes powerful arguments, and it's not outside of the bounds of reason that some of these arguments terrorize the very words used to make them.

I, for one, am calling for a unilateral moratorium on attacking homophones. If you value our civilization, you will join with me.

hard to believe

someone in this day and age is endorsing homophonia. if two words want to sound different, that is their business and theirs alone.

Oh, and through in a few more

Oh, and through in a few more "stupid"s or "idiot"s as well

Next time, when you wish to be condescending and try to make someone feel small or stupid because you don't agree with what they say, please use spellcheck - it gives you more credibility!

Shorter Chad: I don't have

Shorter Chad: I don't have to listen to the facts because you used mean names.

Fool me once...

Appropriate choice for April Fools Day.

Shameless Ranting

I agree, what is a blog but a place to rant? Having said that look at what we have produced! The "No child left behind/everybody gets a trophy" crowd have bequeathed us stupid people. This has to be just the most completely uneducated, math-challenged proposal I've ever seen. These people wouldn't make it through one of my 101 classes.

And I think it's important to call people stupid. The tea party types are stupid. Period. They can't even do simple math. And they don't even know what an entitlement is. Their ideas are stupid as long as they don't include cutting military spending. And if anyone suggests touching Social Security, I'm just going to make popcorn and watch the movie. It will be a doozy!

Chad has a case of the

Chad has a case of the vapors.

Couldn't this be just an

Couldn't this be just an April fools joke? HA,HA,HA,HA. Jokes on us though with these fools in charge.

I enjoyed the post!

Don't listen to Chad! I'm on the fence about whether the current GOP session is the incredibly ignorant on budgetary and economic matters, or whether it's just extremely ignorant on budgetary and economic matters. This post might help me decide!

Joking aside, the reality of the situation is that many Democrats have been drinking the same tea party koolaid. They too cannot grasp simple fundamentals and are unable to clearly explain alternatives to these childish tea party budget bills. The fact that they rarely ever even try means the narrative continually gets driven by the tea party crowd. It's very unfortunate that so few have taken or grasped basic Econ 101.


stop that spending
enrich those rich owners
2010 Spending 33% of Total National Income
2010 Revenue 16% of Total National Income

Easiest And least painful Increase Revenue
100M families affected by Expenditure cuts
15M famlies affected by Revenue Increases

The 15M got almost all Income-Wealth Increases since 1980
1980-2009 top 1% got 281% Increase in Income
Middle 20% got 25% or less than inflation. A Pay cut.

2001-2009--10% took all Income Increase

1980--Top 1% owned 20% Total Financial Wealth
1989--36% or 80% increase good old Ron 60% Tax Cut for them.
120,000,000 workers owned 7%

A vote for a Republican is a vote for Triple A Party
clarenceswinney olduglymeanhinest mad mad mad at Inequality in America.
Thanks ot Mexico we ocme in second in Inequality among major nations.

America has two national Parties

As anybody can see, the Republican Party is incapable of good governance. America needs to become a One Party (Democratic) State before the GOP manages to destroy us all. Or perhaps the GOP can regain it's sanity???

Clarence's rant

Even with all the bluster and rant quality, ol'Clarence's main point -- the growth of income inequality -- is a crucial one. The modern GOP is all about protecting the wealth of the wealthy. The Atlantic Magazine had an article recently that explored the fact that many of our nation's wealthiest families have developed a decreasing attachment to the weal of the nation, because the basis of their fortunes is no longer attached to any one country. These are issues that must be addressed. We cannot have a nation of vast wealth where that wealth and security is in the hands of an increasing (and vanishingly small) minority.

balanced budget amendments

The appalling thing about balanced budget amendments is that the encourage absolute flagrant spending during times when revenues are coming in and the government spending is least required while imposing austerity at a time when increased government spending is necessary. Even though I've taught economics for many years, I'm still amazed at how many people really don't understand basic economics and just want to go living on wishful thinking. Many those types are the others of the abusive comments above. Bet they never had ONE economics or finance course.

If these legislative idiots hadn't given away their states' and the federal government revenues during the first 8 years of the century, this wouldn't be the situation. Money came in and it went out like water through a sieve. No discipline then at all. They give away tax breaks to businesses that don't need them and to rich people that don't even want them and repeatedly ignored the basics of job creation and economic development. Businesses will not move to states where the standard of living stinks. A few property tax breaks are less valuable to companies than are good schools, good roads, excellent recreational facilities, and employees that come in prepared to get a job done. This balanced budget amendment is just more voodoo economics. We don't do anything based on science and reason any more. Every one has some mythic religion they follow that's just supposed to work magically. This austerity budget business is going to send us right back into a recession and likely a bad one.

Second that comment:

"A few property tax breaks are less valuable to companies than are good schools, good roads, excellent recreational facilities, and employees that come in prepared to get a job done."

Add in sewer, water, other utilities and other "Government services".
Businesses want to focus on things they are good at.
Businesses want government to take care of the things they are not good at. As long as government is providing good value for the tax dollars, there is no problem. The problem is when the government fails to deliver or offers a bad deal.

Not That One

I am in favor of a balanced budget amendment, but that one is unacceptable. Section 2 didn’t bother me too much until I read the discussion and Mr. Barlett’s links. It’s a couple others that got my dander up.

Section 1 talks about outlays, but all the others talk about budgets. Budgets are estimates, and you can’t know the receipts or outlays even before disasters. Of course, this amendment has no teeth because most of it can be overridden by 2/3 vote of both houses.

Section 3 requires the president to submit a balanced and capped budget. I learned in elementary school that the Congress makes the laws and the President enforces them. To me, that means the president should submit a budget that includes the full cost of following all the laws the Congress enacts. In this section the Congress attempts to abdicate their primary responsibility of legislating.

Section 4 restricts taxation. The two thirds requirement to pass a tax increase seems a bit excessive and will hamper actually getting the budget balanced. The second sentence (not needing 2/3 if you get more revenue by lowering tax rates) attempts to “enshrine a particular economic policy” in the constitution.

I just had a thought about section 8 and courts not being allowed to increase revenue. The amendment does not prevent the courts from balancing the budget by, for example, reducing expenditures for the legislative and executive branches to zero.


I believe a balanced budget amendment should be something more like “The Receipts shall be greater than the outlays for each rolling five year period.” Or “The Receipts shall be greater than the outlays for three years out of each five year rolling period.”

Enforcement would be a problem. Maybe something where ALL members of Congress eligible to vote on the budget and tax bills for the five year period are no longer eligible for any appointed or elected office of the United States.

I’ve got at least one Republican Senator. Sounds like time to express my disappointment to him.

So what is the alternate to EXTREME budget deficits ?

So now that everybody has had their good laugh, the alternate is ?

Why not let's try to 1) tell

Why not let's try to 1) tell the truth to the American people, so they understand why there is a deficit and what its implications are (it is not just a matter of welfare, waste fraud and abuse); 2) educate the voters so they know where the money goes in the budget (so, for example, they understand that foreign aid is not 10% of all spending); demand that proponents of such nonsense explain what they would do to get to a balanced budget in one year that would not crash the economy. Calling for a balanced budget amendment is a coward's way out -- if they have a plan, come forward and present it. It isn't an answer, it is no answer.

You are absolutely right, but you forgot one thing

Politicians don't tell the American people the truth because when they do, the American people punish them by voting them out of office and replacing them with someone who will them what they want to hear even if it is not true.

If politicians were rewarded for telling the people the truth, they would do it all the time.

How Would It Be Enforced?

In his prior posts on the subject, Bartlett has addressed the problem of how a balanced budget amendment would be enforced. The very assumption for the need of the amendment is that Congress lacks the fortitude to balance the budget on its own. But if Congress won't to it, what will make them do it?

Usually, it's the courts. But does Congress, and especially Republicans, want to give an unelected and unaccountable judge the power to determine if a budget really is balanced (which they're not well-qualified to do), and then raise taxes and/or cut spending as the judge sees fit? Can the judge hold Congress in contempt until it fixes the budget? What about the appeals process? Who would be able to sue in the first place? The enforceability problem is so profound that any amendment that doesn't address it should be laughed out of the Capitol.

This version of the amendment does say that courts can't enforce it by raising revenue (follow the post's link to the text), so apparently the proponents envision some kind of judicial intervention. What an unholy mess it would be. I don't know whether the supporters of this amendment really believe in it or whether it's cynical posturing. Both possibilities are so absurd that it's hard for me to choose between them.

Enforcing a balanced budget amendment

This version of a balanced budget amendment (SJ Res 10) once again ducks the enforcement question for one very understandable, if irresponsible, reason: turning the job over to the courts is unthinkable (epecially for Republicans), but leaving the courts out of the picture means that there will be no enforcement. Under current Supreme Court doctrine, it is virtually certain that no one would have standing to sue to enforce this amendment if it became law. That means that, unless a specific enforcement mechanism were included in the amendment itself, it would be a toothless tiger. Senator Lee's version (SJ Res 5) created standing by one third of either House, which would have turned the courts loose to deal with the budget when Congress did not do its job, but that provision is missing from SJ Res 10. All that is left is a ban on court orders raising revenue, which is only an issue if someone has the right to sue in the first place. This refusal to confront the issue of enforcement is completely consistent with what happened in 1997 when the amendment came within one vote of passing both Houses of Congress, but contained not a word on enforcement, despite repeated pleas to address this issue. Will any of the 47 Senators who are sponsors of SJ Res 10 tell the American people whether they want the amendment to be supervised by the court, or would they prefer that it be enacted and then be just a fig leaf to pretend that Congress is doing something about budget deficits?

Desperate Times Call for Desparate Measures....

or how the Republicans grasp at straws would be a better title to this travesty. They are doing a pretty good job so far of setting themselves up for a big election debacle in 2012. As long as the economy shows continuing signs of improving and even accelerates later this year, Obama comes out looking better than any of their alternatives.

The Tea Party pandering will lead them to ruin since the demographics of the electorate and the greater turnout in Presidential elections will make the 2010 election a footnote in American history.

A dastardly libel


Many years ago, I was an intern on Capitol Hill. My colleagues and I would never have drafted such drivel, even on a napkin, even after drinking. Your post is a grievous insult to the entire intern class.

May not be such a bad idea!

Since everyone knows that the wealthy dominate the government and that much of the 18% would be eaten up by mandatory spending anyway, then a cap like this would cut deeply into corporate welfare, defense spending, and would make looting by the banks with TARP-like bailouts virtually impossible. To me a person on the left could find this a win-win situation. I think the urge to block this comes from the antiquated notion that government is there to help the little guy. Sorry but three decades ago that stopped being the case. Government is now just a racket to protect the big guy. And so limiting the power of this racket to loot the American people seems to be a very good idea.

Stupid is as stupid does

I'm afraid Bruce is right to use this language. Getting policy right is hard work, whatever your ideology. This 'amendment' is lazily and ignorantly constructed. The more committed to meaningful budgetary reform you are, the worse it seems.

Thanks a bunch Bruce: sometimes it really does makes sense to call stupid things "Stupid"!

Read the Fine Print

It's much wimpier than all that:
18% does not apply in years in which the US is involved in a military conflict,
does not take effect until 5 years after ratification,
does not apply to borrowed money.

So (future) congresses will have to decide to lose their seats (due to cutting "needed" funding for their state) or stay at war, or just borrow the money instead of cutting expenses or taxes.

I think the amendment is still silly, but please read it before commenting, ok?

Bruce, Re: "simply refusing


Re: "simply refusing the raise the debt limit would balance the budget overnight -- the nation would default on its debt"

Why would that necessarily (or even likely) occur. Revenues would still be much greater than the amount required for debt service, correct? Therefore, given that default would be disastrous, why wouldn't we service the debt and cut planned spending elsewhere in the budget?


It's a problem of cash flow and priorities established by law. The Treasury can't just pick and choose which bills to pay each month. It is required by law to pay Social Security benefits whether or not it has sufficient cash. 

Thanks Bruce, but if I may

Thanks Bruce, but if I may follow up to seek a clearer answer:

1. Are you saying that such (non-debt-service) legal obligations, in total, would exceed total revenues? If you're not asserting that, you're confirming that we wouldn't necessarily default unless we chose to do so rather than cut other spending.

2. Even if the answer to #1 above is "yes", is debt service also a legal obligation of the Treasury? If so, I would think there would be some established priorities among claims on revenue. Is that the case? And if so, do higher obligations, in total, exceed total revenues?

Bruce, Apparently the answer


Apparently the answer is contrary to what you have implied (twice, including your reply to my comment).

"Even with no increase in the ceiling, the Treasury can easily service its existing debt; it is free to roll over maturing issues, and tax revenue covers monthly interest payments by a large multiple. But in that case it would have to postpone paying something else: tax refunds, Medicare or Medicaid payments, civil-service salaries, or Social Security (pensions) cheques."

"It is not clear what the legal priority is among the Treasury’s obligations, whether contractual such as bond debt or statutory such as social security. “This is an area where the federal government itself is often the interpreter,” says a former official. Yet if it came to it, deciding between the two should not be hard. Delayed payments may hurt pensioners and cause political damage, but a default on Treasury debt would unleash global financial chaos."

And for more, see

Is the above somehow incorrect? If not, seems to me you should admit that your post and your response to me were misleading (hopefully not deliberately so, although it's hard to think you would misunderstand this matter).


You have to remember that the Treasury's cash flow is not constant. There are quarterly bulges followed by months of negative cash flow. There is no assurance that on any given day it will have the cash to redeem maturing notes, bonds and bills and also have the cash to pay interest. If payments are not made in a timely manner then a default occurs. But Treasury is also required by law to make Social Security payments exactly on schedule. In theory this is not a problem so long as there are enough Treasury securities in the trust fund. But to pay the benefits, Treasury can't send people bonds; those bonds have to be converted to cash. Normally, Treasury would just use its own cash. But what if it doesn't have enough owing to an inability to borrow on the open market? The securities in the trust fund are not marketable and there is no mechanism for instantaneously converting them to marketable securities, selling them on the open market and raising cash. At some point the debt limit would be breeched. 

The relevance of negative net

The relevance of negative net cash flow is at best an unclear, because that's net of all our current spending, and my question presumes that level of spending could be reduced sufficiently to service our debt and stay within the debt limit.

Given the numbers shown by the Economist on a full-year basis, I'm skeptical of your implication that variations in revenue would necessarily (or even likely) be insufficient to cover interest on the debt even after (per your premise) paying all Social Security benefits on time.

Are you saying if we spent on nothing but interest expense plus what you're saying law requires we spend on Social Security, at some point over the course of a year the combined cost would exceed the debt limit?

Even if your answer is "yes", I assume April is a "bulge" revenue month, and of course we'd have some further revenue each month. How soon are you saying it would be likely we'd reach that breaking point?

Do numbers really support what you're asserting -- if we look at projected (or recent historical) monthly revenues, projected SS spending, and interest expense?

I would add that you speak of

I would add that you speak of redeeming maturing notes. A relevant point by the Economist is that we can roll it over (at least in effect).

And I'd add further that the

And I'd add further that the figures in my second Economist link, the Economist blog post that followed-up on the article (again it's ) seem to disprove your implication.

SS spending is around $60 billion per month on average, and I assume there is not great variability in that figure month-to-month.

Add $60 billion to the interest expense per month in that Economist chart and the total never gets anywhere near monthly revenue.

Are you saying that there is so much variability by DAY that The Economist is still wrong? If so, I'd sure like to see the data that support your assertion.

Treasury finances

vary a lot on a day to day basis:

That link is not very

That link is not very helpful, since one would have to open the table for each date one at a time for numerous dates just to see if the figures could possibly fit your assertion (and for each table one would also have to subtract interest expense and SS expenditures from revenue).

But regardless, it seems to me your assertion could only make sense if BOTH:

1. There would likely be some day in the near future for which that day's expenditures only for Social Security and interest on the debt exceeded that day's revenue,


2. Over the days and months prior to that day in #1 above, during which there would be massive surpluses at that level of expenditures, the Treasury were not able to retain those surpluses in liquid form (as opposed to buying back Treasury bonds) to cover a shortfall such as on that day in #1.

Are you saying both of the above are true? Or that I'm incorrect in thinking that both would have to be true for your assertion to be valid (if so, please explain why the Treasury couldn't be retain surpluses in liquid form to cover any such shortfall)?

Balance Budget Amendment

Discussion of the Balanced Budget Amendment is a positive sign that lawmakers may finally be ready to address the fiscal irresponsibility of the past few years. But the House's unwillingness to carve time for floor debate out of its spending-bill schedule underscores that too few members take the issue seriously.

Still, because the Balanced Budget Amendment wrongly focuses on the budget deficit, rather than the larger problem of runaway federal spending, its delay is no tragedy. Lawmakers should instead implement spending controls that both reduce the budget deficit and avoid painful tax increases.

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