Solving the Federal Spending Crisis with a Balanced Budget Amendment

Publication Date: June 1992

Publisher: Heritage Foundation (Washington, D.C.)

Author(s): Daniel J. Mitchell

Research Area: Banking and finance

Keywords: Budget

Type: Report

Coverage: United States

Abstract:

While a weak balanced budget amendment like the Simon or Stenholm versions would be better than nothing, the impact will be much less than supporters expect.The difference between a weak amendment and one with tax limitations would be profound. With a weak amendment, the only thing standing between the economy and a repeat of the 1990 budget deal is the political judgment of lawmakers. Under a tax limitation/balanced budget amendment, however, taxes as well as borrowing would be restricted, leaving lawmakers with no choice but to hold down spending. If history is any guide, the best balanced budget amendment is the one that would leave lawmakers with as little discretion as possible.