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Legislative Updates

NALC joins national organizations in opposing ‘balanced budget’ constitutional amendment

Today, NALC signed onto a letter from 296 other national organizations, urging Congress to oppose any balanced budget amendment to the United States Constitution. Such an amendment would require a balanced budget for the federal government each year, regardless of the state of the economy, unless a supermajority of both chambers overrode that requirement.

“Demanding that policymakers cut spending and/or raise taxes even when the economy slows is the opposite of what is needing to stabilize a weak economy and avert recessions,” the letter said.

A 2011 analysis of the balanced budget amendment by Macroeconomic Advisors, an economic forecasting firms, found that such a policy would have devastating consequences for the entire country’s economy. According to its analysis, should a balanced budget amendment have been in place during 2012, nearly 15 million more people would have been out of work, the unemployment rate would have risen from 9 percent to 18 percent, and the U.S. economy would have shrunk by 17 percent.

“In short, a balanced budget amendment is a recipe for making recessions more frequent, longer, and deeper,” the letter noted. “And it would almost certainly necessitate massive cuts in major programs such as Social Security, Medicare, Medicaid and veterans’ benefits.”

Similar constitutional amendments have been considered annually, but have never gained traction in either chamber. Should any movement occur, the NALC will provide updates.

To view the letter, click here.

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