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[House Report 112-117]
[From the U.S. Government Publishing Office]

112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    112-117

======================================================================

 
                BALANCED BUDGET CONSTITUTIONAL AMENDMENT

                                _______
                                

   June 23, 2011.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

Mr. Smith of Texas, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                          DISSENTING VIEWS AND

                      ADDITIONAL DISSENTING VIEWS

                       [To accompany H.J. Res. 1]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the 
joint resolution (H.J. Res. 1) proposing a balanced budget 
amendment to the Constitution of the United States, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the joint resolution as amended 
do pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     2
Purpose and Summary..............................................     2
Background and Need for the Legislation..........................     3
Hearings.........................................................    13
Committee Consideration..........................................    14
Committee Votes..................................................    14
Committee Oversight Findings.....................................    24
New Budget Authority and Tax Expenditures........................    24
Congressional Budget Office Cost Estimate........................    24
Performance Goals and Objectives.................................    26
Advisory on Earmarks.............................................    26
Section-by-Section Analysis......................................    26
Dissenting Views.................................................    28
Additional Dissenting Views......................................    39

                             The Amendment

  The amendment is as follows:
  Strike all after the resolving clause and insert the 
following:

That the following article is proposed as an amendment to the 
Constitution of the United States, which shall be valid to all intents 
and purposes as part of the Constitution when ratified by the 
legislatures of three-fourths of the several States within seven years 
after the date of its submission for ratification:

                              ``Article--

  ``Section 1. Total outlays for any fiscal year shall not exceed total 
receipts for that fiscal year, unless three-fifths of the whole number 
of each House of Congress shall provide by law for a specific excess of 
outlays over receipts by a rollcall vote.
  ``Section 2. Total outlays for any fiscal year shall not exceed 18 
percent of economic output of the United States, unless two-thirds of 
each House of Congress shall provide for a specific increase of outlays 
above this amount.
  ``Section 3. The limit on the debt of the United States held by the 
public shall not be increased unless three-fifths of the whole number 
of each House shall provide by law for such an increase by a rollcall 
vote.
  ``Section 4. Prior to each fiscal year, the President shall transmit 
to the Congress a proposed budget for the United States Government for 
that fiscal year in which total outlays do not exceed total receipts.
  ``Section 5. A bill to increase revenue shall not become law unless 
two-thirds of the whole number of each House shall provide by law for 
such an increase by a rollcall vote.
  ``Section 6. The Congress may waive the provisions of this article 
for any fiscal year in which a declaration of war is in effect. The 
provisions of this article may be waived for any fiscal year in which 
the United States is engaged in military conflict which causes an 
imminent and serious military threat to national security and is so 
declared by a joint resolution, adopted by a majority of the whole 
number of each House, which becomes law.
  ``Section 7. The Congress shall enforce and implement this article by 
appropriate legislation, which may rely on estimates of outlays and 
receipts.
  ``Section 8. Total receipts shall include all receipts of the United 
States Government except those derived from borrowing. Total outlays 
shall include all outlays of the United States Government except for 
those for repayment of debt principal.
  ``Section 9. This article shall take effect beginning with the later 
of the second fiscal year beginning after its ratification or the first 
fiscal year beginning after December 31, 2016.''.

                          Purpose and Summary

    H.J. Res. 1, proposing a balanced budget constitutional 
amendment, is designed to establish a balanced budget as the 
norm for Federal fiscal policy. To that end, the amendment 
requires a three-fifths majority of each House's total 
membership to approve a budget in which total Federal outlays 
exceed total receipts or to raise the limit on the public debt. 
Additionally, to help ensure that the budget is balanced, the 
amendment provides that annual outlays cannot exceed 18 percent 
of the country's annual economic output--a limit tied to the 
amount of annual revenues the Federal Government historically 
generates--unless two-thirds of each House of Congress votes to 
exceed this level. Moreover, to deter the Federal Government 
from consuming an increasing share of the national economy, the 
amendment requires a two-thirds vote of each House's total 
membership for a bill to increase revenue. This requirement 
also discourages excessive reliance on tax increases--rather 
than spending cuts--to achieve a balanced budget. The amendment 
allows Congress to waive the amendment's requirements for any 
fiscal year in which a declaration of war is in effect or in 
which Congress determines by a joint resolution signed by the 
President that ``an imminent and serious military threat to 
national security'' exists.

                Background and Need for the Legislation

    The Federal budget deficit has become one of America's most 
persistent political issues and a balanced Federal budget is a 
bipartisan goal of many Members of Congress. Since the 1930's, 
dozens of proposals have called for constitutional amendments 
to address Federal budget deficits. In recent years, efforts to 
secure a constitutional rule to require a balanced Federal 
budget have intensified, as the Federal Government's habitual 
failure to balance the budget has produced a debt of over $14 
trillion. In this Congress, H.J. Res. 1 proposes to amend the 
U.S. Constitution to require the annual Federal budget to be 
balanced by the later of the first fiscal year after December 
31, 2016, or the second fiscal year after its ratification by 
the states.
    Moving the Federal budget closer to balance is a long-term 
necessity because the national debt cannot grow as a percentage 
of the country's economic output indefinitely. Currently, the 
total national debt is over $14 trillion and deficits and 
spending continue to increase without regard to the burdens 
imposed on current and future taxpayers. Although persistent 
deficits threaten the country's long-term prosperity, the 
Federal Government has proven unwilling or unable to regularly 
balance the Federal budget. Statutory controls on government 
spending have largely proven unsuccessful in limiting deficit 
spending. For instance, Congress repeatedly relaxed deficit 
targets in the Balanced Budget and Emergency Deficit Control 
Act of 1985 (Gramm-Rudman-Hollings Act),\1\ and other budget 
control mechanisms, such as the Budget Enforcement Act of 
1990\2\ and Pay-As-You-Go rules, have not offered realistic 
long-term prospects of continued deficit reduction.
---------------------------------------------------------------------------
    \1\P.L. 99-177, 99 Stat. 1037.
    \2\P.L. 101-508; 104 Stat. 1388.
---------------------------------------------------------------------------
    A balanced budget amendment to the Constitution may be the 
only way to control Federal spending and provide the country 
with the long-term fiscal discipline it so desperately needs. 
The adoption of H.J. Res. 1 would be more than a mere symbolic 
act. A balanced budget constitutional amendment would 
establish, in the country's governing document, the basic 
principle that the Federal Government must not spend beyond its 
means. It would have a powerful impact on Federal fiscal 
policies by establishing a binding legal framework requiring 
Congress to make challenging decisions. H.J. Res. 1 is not a 
substitute for difficult legislative choices; rather, it is a 
catalyst for congressional action.
A. Constitutional Amendment Procedures
    Congress may propose an amendment to the Constitution 
whenever two-thirds of both houses of Congress deem it 
necessary.\3\ Alternatively, Congress must call for a 
constitutional convention for the purpose of proposing 
amendments on application of the legislatures of two-thirds of 
the states.\4\ This alternative method has not been used to 
date, although at one point 32 of the requisite 34 states 
called for a constitutional convention in response to the 
balanced budget issue.\5\ A constitutional amendment--whether 
proposed by two-thirds votes in Congress or by a constitutional 
convention--must be ratified by the legislatures or conventions 
in three-fourths of the states in accordance with the mode of 
ratification proposed by Congress.\6\ The preamble to H.J. Res. 
1 proposes ratification by state legislature.
---------------------------------------------------------------------------
    \3\U.S. Const. art. V.
    \4\Id.
    \5\James K. Rogers, The Other Way to Amend the Constitution: The 
Article V Constitutional Convention Amendment Process, 30 Harv. J.L. & 
Pub. Pol'y 1005, 1010 (2007).
    \6\U.S. Const. art. V.
---------------------------------------------------------------------------
B. The Federal Deficit
    The Founders and early U.S. Presidents were in almost 
unanimous agreement on the dangers of excessive public debt. 
According to Nobel Prize winning economist James Buchanan, 
``[p]oliticians prior to World War II would have considered it 
to be immoral to spend more than they were willing to generate 
in tax revenue, except during periods of extreme and temporary 
emergency.''\7\ Consequently, for over 140 years of this 
country's history--from 1789 to 1932--balanced budgets or 
surplus budgets were the norm. However, since 1960 the United 
States has run annual Federal budget deficits in all but 6 
fiscal years.
---------------------------------------------------------------------------
    \7\James M. Buchanan, ``Clarifying the Confusion About the Balanced 
Budget Amendment,'' 48 Nat'l Tax J. 347 (1995).
---------------------------------------------------------------------------
    Today, the United States is in the early stages of a severe 
fiscal crisis. The Federal debt has exceeded the Nation's 
economic output in only three fiscal years during U.S. 
history--1945 through 1947. However, President Obama's fiscal 
year 2011 budget estimated that beginning in 2012, the gross 
Federal debt will exceed gross domestic product for the 
foreseeable future. That budget also predicts that the Federal 
deficit will more than double between 2009 and 2020. Assuming 
that there are about 128 million U.S. households, the national 
debt will amount to over $200,000 per household by 2020. These 
figures do not even reflect the unfunded liabilities from 
Social Security and Medicare commitments to current and future 
participants in these programs. Over the next 75 years, Social 
Security has promised to pay $7.8 trillion more in benefits 
than it will receive in payroll taxes and, over that same 
period, Medicare faces an unfunded liability in excess of $30 
trillion.\8\
---------------------------------------------------------------------------
    \8\Heritage Foundation, Saving the American Dream: The Heritage 
Plan to Fix the Debt, Cut Spending, and Restore Prosperity 9, 13 
(Stuart M. Butler et al. eds., 2011).
---------------------------------------------------------------------------
    The tremendous amount of Federal spending does damage to 
the U.S. economy. By consuming such an overwhelming part of the 
capital in the economy, the government crowds out private 
sector investment. Thus, when government spending rises 
unchecked by fiscal responsibility, it chokes off the primary 
engines of economic growth and risks our long-term security.
C. Statutory Attempts to Control Federal Spending and Deficits
    Opponents of the balanced budget amendment argue that 
Congress does not need a constitutional amendment to balance 
the budget because Congress can address spending and the 
deficit statutorily without waiting for ratification of a 
constitutional amendment. However, past statutory efforts have 
shown that Congress simply does not have the will to balance 
the budget for an extended period of time. Statutory efforts to 
balance the budget have failed because it is too easy for 
Congress simply to reverse course and rescind its previous 
declarations. Over the past 50 years, Congress has had a dismal 
history of attempting to impose fiscal discipline on itself, 
despite numerous statutory proposals to achieve this end.
    Senses of the Congress. Congressional declarations that the 
budget should be balanced have had no effect of balancing the 
budget. For example, the Revenue Act of 1964 states that ``[t]o 
further the objective of balanced budgets in the near future, 
Congress by this action recognizes the importance of taking all 
reasonable means to restrain government spending,''\9\ and, the 
Humphrey-Hawkins Full Employment Act of 1978 included a 
provision calling for a balanced budget and declared that a 
balanced budget is an ``important national requirement[].''\10\ 
These and other pronouncements of the importance of balancing 
the budget--including the commitment codified in 31 U.S.C. 
Sec. 1103 ``that budget outlays of the United States Government 
for a fiscal year may be not more than the receipts of the 
Government for that year''\11\--have done nothing to ameliorate 
the ever-increasing Federal deficit.
---------------------------------------------------------------------------
    \9\P.L. 88-272, Sec. 1, 78 Sta. 19.
    \10\P.L. 95-523, 92 Stat. 1887.
    \11\31 U.S.C. Sec. 1103.
---------------------------------------------------------------------------
    Congressional Budget and Impoundment Control Act of 1974. 
The Congressional Budget Act of 1974\12\ requires the House and 
Senate to adopt a budget resolution each year, setting forth 
aggregate spending and revenue levels, and spending levels by 
major functional categories. The 1974 act includes an optional 
reconciliation procedure that provides for the development and 
consideration of revenue, spending, and debt-limit legislation. 
During the 1980's and much of the 1990's, reconciliation was 
used principally as a means of reducing the deficit. However, 
in recent years, the reconciliation process has been used 
mainly to expedite the passage of legislation that increases 
the deficit. Moreover, only in one 4-year period (1997-2001) 
after enactment of the 1974 act has the Federal budget been 
balanced.
---------------------------------------------------------------------------
    \12\P.L. 93-344, 88 Stat. 297.
---------------------------------------------------------------------------
    Byrd Amendments. After the Congressional Budget and 
Impoundment Control Act failed to achieve the fiscal discipline 
that was envisioned, Congress enacted a series of ``Byrd 
Amendments'' in 1978, 1980, and 1982 to try to balance the 
budget. The first, passed as part of the Bretton Woods 
Agreements Act, mandated that ``total budget outlays of the 
Federal Government shall not exceed its receipts'' beginning in 
fiscal year 1981.\13\ By 1980, the mandatory language of the 
1978 amendment had been watered down to state only that 
``Congress reaffirms its commitment'' to a balanced budget in 
fiscal year 1981.\14\ Finally, in 1982, the reference to fiscal 
year 1981 was deleted, such that under current law Congress 
perpetually ``reaffirms its commitment'' to a balanced Federal 
budget every year.\15\ Obviously, the statutory commitment of 
the Byrd Amendments has been ignored.
---------------------------------------------------------------------------
    \13\P.L. 95-435, Sec. 7, 92 Stat. 1053.
    \14\P.L. 96-389, Sec. 3, 94 Stat. 1553.
    \15\31 U.S.C. Sec. 1103.
---------------------------------------------------------------------------
    Gramm-Rudman-Hollings. The Balanced Budget and Emergency 
Deficit Control Act of 1985 (also known as Gramm-Rudman-
Hollings),\16\ mandated a balanced budget by fiscal year 1991. 
To reach that goal, the Act required automatic across-the-board 
spending cuts if Congress and the President could not agree on 
a balanced budget in a given year. This legislation proved 
inadequate at the task of closing the gap between the Federal 
Government's revenue and expenditures and the national debt 
continued to grow. As one scholar has observed, ``Gramm-Rudman-
Hollings failed because the enforcement mechanism was not 
credible. Congress's power to change the process was 
unconstrained. . . . As soon as punishments became too harsh, 
Congress could (and did) change the rules.''\17\
---------------------------------------------------------------------------
    \16\P.L. 99-177, 99 Stat. 1037.
    \17\David Primo, Rules and Restraint 112 (2007).
---------------------------------------------------------------------------
    Debt Ceiling. The Second Liberty Bond Act of 1917 
established a statutory limit on Federal debt of $11.5 
billion.\18\ Congress had previously approved each debt 
issuance separately. The statutory debt ceiling has done little 
to place a ceiling on the national debt. Since it was 
established, the debt ceiling has been raised nearly 100 times 
and currently stands at over $14 trillion.
---------------------------------------------------------------------------
    \18\P.L. 65-43, 40 Stat. 288.
---------------------------------------------------------------------------
    PAYGO. Statutory Pay-As-You-Go (PAYGO)\19\ and House and 
Senate PAYGO rules are supposed to help reduce spending and 
deficits by preventing tax cuts and new direct spending that is 
not deficit neutral. However, PAYGO does nothing to deal with 
the costs of existing direct spending programs. Moreover, there 
are loopholes in PAYGO that allow its caps on new direct 
spending to be avoided. Indeed, the Congressional Research 
Service has even prepared a report entitled ``Techniques for 
Preventing a Budget Sequester,'' explaining ways around the 
PAYGO requirements.
---------------------------------------------------------------------------
    \19\Part of the Budget Enforcement Act of 1990 and the Statutory 
PAYGO Act of 2010.
---------------------------------------------------------------------------
    Line-item Veto. Because the President must approve or veto 
a spending or revenue act in its entirety, many advocates of 
greater budget discipline have proposed the President be 
granted a line-item veto as a means of controlling Federal 
spending. In 1996, President Clinton signed into law the Line 
Item Veto Act.\20\ Under the Act, the President was authorized 
to strike individual items of discretionary spending, direct 
spending, and certain limited tax benefits in any law.\21\ 
While this law may have provided some measure of budget 
control, especially control over earmarks and other targeted 
spending, the law was declared unconstitutional by the Supreme 
Court in 1998.\22\
---------------------------------------------------------------------------
    \20\P.L. 104-130, 110 Stat. 1200.
    \21\The President was only to exercise the cancellation authority 
if he determined that such cancellation would reduce the Federal budget 
deficit and would not impair essential government functions or harm the 
national interest; and then notified the Congress in a special message 
of any such cancellation within five calendar days after enactment of 
the law providing such amount, item, or benefit. The act provided 30 
days for the expedited congressional consideration of disapproval bills 
to reverse the cancellations contained in the special messages received 
from the President.
    \22\Clinton v. City of New York, 524 U.S. 417 (1998).
---------------------------------------------------------------------------
    In one way or another, each of the statutory attempts to 
control Federal spending has failed to constrain Congress from 
spending beyond annual Federal revenues. This is in large part 
because no Congress can bind a succeeding Congress by a simple 
statute. Any statute Congress passes to reduce Federal spending 
or require balanced Federal budgets can be repealed by the 
simple expedient of adopting a new statute that conflicts with 
the earlier measure.
D. Legislative History of the Balanced Budget Amendment
    During the nineteenth and early twentieth centuries, when a 
balanced Federal budget was the norm and part of the 
``unwritten constitution,'' there was little need for Congress 
to focus on a balanced budget amendment. However, as the 
Federal Government has run regular budget deficits of an 
increasingly large magnitude, efforts to adopt a balanced 
budget constitutional amendment have become more intense. In 
1936, Representative Harold Knutson of Minnesota proposed the 
first constitutional amendment to balance the Federal 
budget.\23\ His proposal would have established a per capita 
limitation on the Federal public debt. Under the proposed 
amendment Congress could run budget deficits, but only to the 
extent that the per capita ceiling was not breached.
---------------------------------------------------------------------------
    \23\H.J. Res. 579, 74th Cong.
---------------------------------------------------------------------------
    Since Representative Knutson's proposed amendment, numerous 
constitutional amendments have been proposed to require a 
balanced budget. In the 78th Congress, Senator Millard Tydings 
and Representative Wesley Disney introduced constitutional 
amendments to prohibit government appropriations from exceeding 
receipts.\24\ Balanced budget constitutional amendments were 
introduced regularly in the 1950's. Amendments were first 
proposed by Senators Styles Bridges and Harry Byrd and later by 
Senators Strom Thurman and Carl Curtis, to require the 
submission by the President of an annual balanced budget and to 
prevent Congress from adjourning without having enacted such a 
budget.
---------------------------------------------------------------------------
    \24\S.J. Res. 97 (78th Cong.); H.J. Res. 195 (78th Cong.).
---------------------------------------------------------------------------
    More recent efforts for a balanced budget amendment 
commenced in 1975 when states began petitioning Congress for a 
constitutional convention under Article V of the Constitution 
for the purpose of considering a balanced budget constitutional 
amendment. As part of this effort, thirty-two states petitioned 
for a constitutional convention.
    The first real shot at Congress passing a balanced budget 
constitutional amendment did not come until the 1980's. A 
balanced budget amendment passed the Senate by a 69-to-31 vote 
in 1982,\25\ but, although a substantial majority of the House 
voted in favor of the House version of the amendment, the 236-
to-187 margin fell short of the required two-thirds 
threshold.\26\ After the 1982 failure to garner a two-thirds 
majority, successful discharge petition efforts in the House 
led to consideration of balanced budget proposals that passed 
by wide margins on three more occasions but failed to reach the 
two-thirds threshold--279-to-150 in 1990, 280-to-153 in 1992, 
and 271-to-153 in 1994. Additionally, in the Senate, in 1986, a 
balanced budget amendment failed by one vote (66 to 34)\27\ and 
again, in 1994, by four votes (63 to 37).\28\
---------------------------------------------------------------------------
    \25\S.J. Res. 58 (97th Cong.).
    \26\H.J. Res. 350 (97th Cong.).
    \27\S.J. Res. 225 (99th Cong.).
    \28\S.J. Res. 41 (103d Cong.).
---------------------------------------------------------------------------
    The balanced budget amendment came to the forefront in 1995 
as part of the Contract with America. In 1995, a balanced 
budget amendment, for the first time ever, passed the House by 
the required two-thirds margin (300 to 132)\29\ but fell one 
vote short in the Senate of being sent to the states for 
ratification.\30\ And, in 1997, the balanced budget amendment 
once again failed by to meet the two-thirds threshold in the 
Senate by one vote.\31\
---------------------------------------------------------------------------
    \29\H.J. Res. 1 (104th Cong.).
    \30\S.J. Res. 1 (104th Cong.). The actual vote total was 65 to 35, 
but Senator Dole switched his vote to ``no'' in order to preserve his 
right to call the balanced budget amendment up for reconsideration.
    \31\S.J. Res. 1 (105th Cong.).
---------------------------------------------------------------------------
E. The Current Proposal
    On January 5, 2011, Representative Goodlatte introduced 
H.J. Res. 1 to propose a balanced budget amendment to the 
Constitution and re-establish the formal and informal 
constitutional limitations on Federal spending and deficits 
that previously existed. The proposal has over 130 co-sponsors. 
H.J. Res. 1 is designed to discourage the Federal Government 
from engaging in deficit spending, increasing taxes, and 
raising the ceiling on debt held by the public.
    The basic provision in H.J. Res. 1 is that the Federal 
Government's outlays cannot exceed receipts unless approved by 
a three-fifths majority of both Houses of Congress. 
Additionally, the proposed balanced budget amendment requires a 
three-fifths vote in both Houses to increase the debt limit and 
a two-thirds vote to pass a bill to increase revenue. H.J. Res. 
1 further provides that total outlays for any fiscal year shall 
not exceed eighteen percent of economic output of the United 
States, unless approved by two-thirds of each House of 
Congress.
    Governmental flexibility is not compromised by the 
supermajority votes required by H.J. Res. 1 to overcome 
balanced budget requirements. Three-fifths vote provisions 
(with war and national security related exceptions) do not 
preclude deficit spending, tax increases, and increases in the 
debt ceiling but rather discourage such action from being taken 
lightly. The two-thirds vote required for legislation to 
increase tax revenue is an important feature of this 
constitutional amendment to discourage excessive reliance on 
tax increases rather than spending cuts to balance the budget. 
And, the supermajority vote requirement to increase the debt 
ceiling is to discourage government borrowing to pay for 
additional spending.
F. H.J. Res. 1 is Consistent with the Constitution
    The balanced budget amendment proposed by H.J. Res. 1 is 
consistent with the nature and purpose of the U.S. 
Constitution, which already addresses economic issues in 
various contexts. Congressional powers delineated in the 
Constitution include laying and collecting taxes, imposing 
customs duties and tariffs, paying debts of the United States, 
borrowing money, regulating interstate commerce and commerce 
with foreign nations, and coining money. The Fifth and 
Fourteenth Amendments include protections of property rights, 
and the Sixteenth Amendment authorizes the income tax. 
According to Professor Kenneth Dam, ``[w]hen one contemplates 
the Constitution as a whole, considering provisions not 
specifically directed to fiscal matters and taking into account 
the Federal structure created by the Constitution, an imposing 
edifice of fiscal powers and limitations can be perceived. The 
result is what I call the `fiscal Constitution.'''\32\ Because 
of the substantial attention the Constitution already gives to 
economics, arguments that fiscal policy does not belong in the 
Constitution are unconvincing.
---------------------------------------------------------------------------
    \32\Kenneth W. Dam, The American Fiscal Constitution, 44 U Chi. L 
Rev 271, 272 (1977).
---------------------------------------------------------------------------
    Indeed, the Constitution was born out of the fiscal 
problems caused by the Articles of Confederation. As historian 
Sidney Homer put it, ``[i]n spite of the great potential 
economic strength of the new country, its financial and 
political system broke down completely in 1786. Credit at home 
and abroad was no longer available. The impossibility of 
government without money, credit, or power led to the 
Constitutional Convention of 1787 and a new nation in 
1789.''\33\ In other words, the need to balance the budget and 
restore the good credit of the government led directly to the 
drafting of the Constitution in the first place.
---------------------------------------------------------------------------
    \33\Whether the Constitution Should be Amended to Address the 
Federal Deficit?: Hearing Before Subcomm. on the Constitution of the 
House Comm. on the Judiciary, 112th Cong. (2011) (testimony of Andrew 
Moylan, National Taxpayers Union); see also Aaron Wildavsky, How to 
Limit Government Spending 74 (1980) (``Dissatisfaction with monetary 
and debt policy under the Articles of Confederation spurred the 
devising of an entirely new document.'').
---------------------------------------------------------------------------
    Moreover, the Framers and leaders of the U.S. government 
during most of this Nation's history accepted balanced budget 
principles; accordingly, for approximately the first 150 years 
of this Nation's history--from 1789 to 1932--balanced budgets 
or surplus budgets were the norm. When deficits did occur they 
generally were insignificant, usually related to wartime 
circumstances, and generally were compensated for by subsequent 
surpluses. Thus, for much for the Nation's history, the 
requirement of budget balancing under normal economic 
circumstances was considered an unwritten constitutional rule. 
For this reason, mandating a balanced budget would have been 
superfluous in earlier times. According to Professor William 
Breit,

        [t]he balanced-budget rule which served as part of the 
        Constitution was, of course, not in the form of a 
        written statement that every expenditure had to be 
        balanced by a tax. But it nevertheless had 
        constitutional status. For expenditures in excess of 
        receipts were considered to be in violation of moral 
        principles. The imperative of the balanced budget was 
        an extra-legal rule or custom that grew up around the 
        formal document. It existed outside the precise letter 
        of the Constitution on all fours with the system of 
        political parties, the presidential cabinet, the actual 
        operation of the electoral college system, and the 
        doctrine of judicial review.\34\
---------------------------------------------------------------------------
    \34\William Breit, ``Starving the Leviathan: Balanced Budget 
Prescriptions Before Keynes,'' in Fiscal Responsibility in 
Constitutional Democracy (James M. Buchanan and Richard E. Wagner eds., 
1978).

    But the country's early political leaders were aware of the 
dangers of a Federal deficit. As Thomas Jefferson stated, ``I 
place economy among the first and most important of republican 
virtues, public debt as the greatest of dangers to be 
feared.''\35\ Thus, Jefferson wished ``it were possible to 
obtain a single amendment to our Constitution . . . taking from 
the Federal Government the power of borrowing.''\36\ In fact, 
early U.S. Presidents were in virtually unanimous agreement on 
the dangers of excessive public debt. In his first annual 
address to Congress, President John Adams stated that, ``[t]he 
consequences arising from the continual accumulation of public 
debts in other countries ought to admonish us to be careful to 
prevent their growth in our own.''\37\ President James Madison 
stated that one of the primary goals of his Administration 
would be ``to liberate the public resources by an honorable 
discharge of public debts.''\38\ President James Monroe held a 
similar position observing that, after the elimination of the 
public debt, the government ``would be left at liberty . . . to 
apply such portions of the revenue as may not be necessary for 
current expenses to such other objects as may be most conducive 
to the public security and welfare.''\39\ President John Quincy 
Adams also found a balanced budget to be a sound maxim: ``among 
the maxims of political economy which the stewards of the 
public money should never suffer without urgent necessity to be 
transcended is that of keeping the expenditures of the year 
within the limits of its receipts.''\40\
---------------------------------------------------------------------------
    \35\Letter from Thomas Jefferson to Governor William Plumer of New 
Hampshire (July 21, 1816) in 7 The Writings of Thomas Jefferson 19 
(H.A. Washington ed. 1855).
    \36\Letter from Thomas Jefferson to John Taylor (Nov. 26, 1798) in 
4 The Writings of Thomas Jefferson 259 (1869).
    \37\President John Adams, First Annual Address to Congress (Nov. 
23, 1797).
    \38\President James Madison, First Inaugural Address (March 4, 
1809).
    \39\2 Messages and Papers of the Presidents 823 (J. Richardson ed. 
1897).
    \40\President John Quincy Adams, Third Annual Message to Congress 
(Dec. 4, 1827).
---------------------------------------------------------------------------
    Today, in an era of deficit spending, the balanced budget 
constitutional amendment is needed to give expression to a 
practice accepted widely for so many years--namely, spending 
within the country's means. The balanced budget amendment is a 
major step toward securing an environment in which fiscally 
responsible policies are more easily attainable. The current 
environment is biased in favor of ever-increasing levels of 
Federal Government spending.
    Consistent with the Constitution's framework, H.J. Res. 1 
is needed to overcome the current bias in favor of increasing 
government spending by restoring the balanced budget principles 
that existed for much of the Nation's history. The purpose of 
the amendment is not to write economic policy into the 
Constitution, nor does it propose to intrude the Constitution 
into Congress's day-to-day spending and taxing decisions. 
Rather, the balanced budget amendment merely proposes to create 
a fiscal environment in which spending decisions will once 
again be constrained by available revenues.
G. The Supermajority Voting Requirements in H.J. Res. 1 Are Consistent 
        with the Constitution
    Opponents of the balanced budget constitutional amendment 
have asserted that the amendment's supermajority voting 
requirements should not be placed into Constitution. This 
argument, of course, ignores the nine other supermajority 
voting requirements already included in the Constitution.\41\ 
But more fundamentally it fails to acknowledge the structure of 
the government created by the Constitution with its system of 
checks and balances and separation of powers designed to impose 
restraints on the actions of the people's elected 
representatives. Over the years, Americans have suffered from 
the removal of written and unwritten constraints that were 
intended by the framers to limit the authority of Congress. 
Rather than being contrary to the Constitution, the balanced 
budget constitutional amendment's supermajority voting 
requirements aim to restore necessary structural constraints on 
the Congress.
---------------------------------------------------------------------------
    \41\U.S. Cont. art. I, Sec. 3 (``No person shall be convicted 
without the concurrence of two thirds of the Members present.''); U.S. 
Cont. art. I, Sec. 5 (``Each House may determine the Rules of its 
Proceedings, punish its Members for disorderly Behavior, and, with the 
Concurrence of two-thirds, expel a Member.''); U.S. Cont. art. I, 
Sec. 7 (``If after such Reconsideration two thirds of that House shall 
agree to pass the Bill, it shall be sent, together with the Objections, 
to the other House, by which it shall likewise be reconsidered, and if 
approved by two thirds of that House, it shall become a Law.''); U.S. 
Cont. art. II, Sec. 2 (``[The President] shall have Power . . . to make 
Treaties, provided two thirds of the Senators present concur.''); U.S. 
Cont. art. V (``The Congress, whenever two thirds of both Houses shall 
deem it necessary, shall propose Amendments to this Constitution.)''; 
U.S. Cont. art. II, Sec. 1 (``[When choosing the President in the 
House,] a quorum for this Purpose shall consist of a Member or Members 
from two thirds of the States, and a Majority of all the States shall 
be necessary to a Choice.''); U.S. Const. art. VII (``The Ratification 
of the Conventions of nine States, shall be sufficient for the 
Establishment of this Constitution between the States so ratifying the 
Same.''); U.S. Const. amend. XIV, Sec. 3 (``No person shall . . . hold 
any [US] office . . . who, having previously taken an oath . . . to 
support the Constitution . . . shall have engaged in insurrection or 
rebellion. . . . But Congress may by a vote of two-thirds of each 
House, remove such disability.''); U.S. Const. amend. XXV, Sec. 4 (``If 
Congress . . . determines by two thirds vote of both Houses that the 
President is unable to discharge the powers and duties of his office, 
the Vice President shall continue to discharge the same as Acting 
President.'').
---------------------------------------------------------------------------
    One of the fundamental problems of with any democratic form 
of government is ``that concentrated interest groups have more 
influence with legislators than diffuse groups, even if the 
diffuse groups represent a numerical majority. Our present 
budget crisis is in large measure a reflection of repeated 
instances of this dynamic.''\42\ The taxes and borrowing 
required to pay for expenditures do not impose a substantial 
constraint on Congress because the true cost of taxes and 
borrowing by the Federal Government is diffused over the entire 
population and, in many cases, future generations. As Professor 
E. Donald Elliott has explained,
---------------------------------------------------------------------------
    \42\John O. McGinnis and Michael B. Rappaport, The 
Constitutionality of Legislative Supermajority Requirements: A Defense, 
105 Yale L.J. 483, 509 (2005).

        Most government spending programs provide significant 
        benefits to relatively concentrated, and, therefore, 
        relatively well-organized and politically effective 
        constituencies. On the other hand, the costs of 
        government spending are spread over a large and diffuse 
        group--taxpayers. Because the incremental cost of each 
        government spending decision is relatively 
        insignificant to individual taxpayers, and because the 
        benefits from organizing to oppose government spending 
        are speculative and difficult to appropriate, . . . it 
        will be difficult, if not impossible, to organize the 
        broad mass of taxpayers, as such, into an effective 
        counterweight to spending that benefits ``special 
        interest groups'' with more narrowly focused interests. 
        Thus, . . . there is an inherent bias built into the 
        political system in favor of spending to benefit 
        organized constituencies, even when the total costs of 
        a program exceed its benefits. . . .
          The basic institutional checks designed by the 
        framers of the Constitution to limit the power of 
        interest groups have long since eroded. First, the 
        seventeenth amendment provided direct popular election 
        of Senators. Second, the electoral college has now 
        become largely vestigial, so that as a practical 
        matter, the President is also popularly elected. Third, 
        a vast ``administrative state'' with broad delegated 
        powers has arisen that lies largely outside the system 
        of checks and balances crafted so carefully by the 
        framers. Finally, as both the country and the nature of 
        government have changed, the principle of geographic 
        diversity of interests, upon which the framers placed 
        primary reliance, is no longer as potent a check on the 
        power of special interest groups as it may once have 
        been. Today there are many interest groups that are 
        more or less evenly distributed throughout the country 
        (Social Security recipients, for example), and they can 
        bring potent electoral pressures to bear on 
        Representatives, Senators, and Presidents alike.
          The cumulative effect of these changes is to render 
        our political institutions systematically vulnerable to 
        the influence of well-organized, narrowly-focused 
        groups seeking subsidies or other forms of preferential 
        treatment from the Federal Government. The current 
        deficit is merely the outward symptom of these more 
        fundamental problems, resulting from the way in which 
        our political institutions have evolved.\43\
---------------------------------------------------------------------------
    \43\E. Donald Elliott, Constitutional Conventions and the Deficit, 
1985 Duke L.J. 1077, 1090-91, 1095 (1985).

    In other words, the concept of ``limited government'' or 
``enumerated powers'' that was at the root of the Constitution 
and that served to check the growth of the public sector during 
most of the Nation's history has been altered drastically by 
the evolution of public policy and constitutional 
interpretation during the 20th century in a manner that never 
could have been predicted by the framers of the Constitution. 
As Milton Friedman observed, constraints in the Constitution 
and originally envisioned by the framers ``to limit Federal 
action in the economic area . . . have now been swept 
away.''\44\ According to Professor Friedman, these constraints 
``cannot be restored in their initial form. But some 
replacement is desperately needed.''\45\ The supermajority 
voting requirements in H.J. Res. 1 provide that restraint.
---------------------------------------------------------------------------
    \44\Proposed Balanced Budget/Tax Limitation Constitutional 
Amendment: Hearing on S.J. Res. 5 Before the Subcomm. on the 
Constitution of the Sen. Comm. on the Judiciary, 98th Cong. (1984) 
(statement of Professor Milton Friedman).
    \45\Id.
---------------------------------------------------------------------------
    As James Madison wrote in the Federalist Papers, 
``[g]overnment is the greatest of all reflections on human 
nature. If men were angels no government would be necessary. If 
angels were to govern man, neither external nor internal 
controls on government would be necessary.''\46\ The 
supermajority rules H.J. Res. 1 proposes are necessary 
``controls on government'' spending and budget deficits. 
Madison emphasized the paramount responsibility of the new 
Government to ``break and control the violence of 
faction.''\47\ According to Madison, the causes of ``factions'' 
are ``sown in the nature of man'' and must be controlled by the 
institutions created by the Constitution.
---------------------------------------------------------------------------
    \46\The Federalist No. 51 (James Madison).
    \47\The Federalist No. 10 (James Madison). Madison defined 
``faction'' as a ``majority or minority of the whole, who are united 
and actuated by some common impulse or passion, or of interest adverse 
to the rights of other citizens, or to the permanent and aggregate 
interests of the whole.''
---------------------------------------------------------------------------
    The Federal Government's present financial crisis, in part, 
is the creation of, and continues because of, the role of 
factions within the political process. The supermajority voting 
requirements proposed by H.J. Res. 1 should be understood as an 
attempt to counteract those interests and restore the original 
constitutional balance on deficits and spending and are 
entirely consistent with the framers understanding of a 
constitutional republic.
H. The Balanced Budget Amendment and Social Security and Medicare
    A continuation of deficit spending poses the greatest long-
term threat to the integrity of Social Security, Medicare, and 
other government benefit programs. Yet, during committee 
consideration of the balanced budget, members of the minority 
offered five amendments to in some way limit the application of 
balanced budget principles to Social Security, Medicare, or 
other government benefit programs. But the balanced budget 
amendment is exactly what these programs need if they are to 
continue providing benefits into the future. The balanced 
budget amendment will help save these worthy government 
programs by strengthening the economy, reducing interest rates 
and inflation (which helps senior citizens living on fixed 
incomes), and ensuring that the Federal Government has the 
funds available to meet its Social Security and Medicare 
obligations when they become due.
    The best way to ensure that Social Security, Medicare, and 
other programs will have enduring value is for the Federal 
Government to get its fiscal house in order. As Robert Myers, 
Social Security's former chief actuary and deputy commissioner, 
wrote, in support of a balanced budget amendment,

        If we continue to run Federal deficits year after year, 
        and if interest payments continue to rise at an 
        alarming rate, we will face two dangerous 
        possibilities. Either we will raid the trust funds to 
        pay for our prolificacy, or we will print money, 
        dishonestly inflating our way out of indebtedness. Both 
        cases would devastate the real value of the Social 
        Security Trust Funds. Regaining control of our fiscal 
        affairs is the most important step that we can take to 
        protect the soundness of the Social Security trust 
        funds.\48\
---------------------------------------------------------------------------
    \48\143 Cong. Rec. S1865 (daily ed. March 4, 1997).

    It appears that the motivation of those offering amendments 
to exempt or otherwise limit the balanced budget amendment's 
application to government benefit programs is to attempt to 
prevent the benefits those programs provide from being reduced. 
This concern is misplaced. Adoption of a balanced budget 
constitutional amendment will not in any way mean that 
government benefits, such as Social Security benefits, will be 
reduced. There is no reason to believe that the balanced budget 
amendment will cause the Federal Government to abandon its 
commitment to older Americans; Social Security and Medicare 
enjoy broad congressional support. The balanced budget 
amendment should enhance, not detract from the protection these 
programs enjoy in the future.

                                Hearings

    The Committee's Subcommittee on the Constitution held 1 day 
of hearings on proposed amendments to the Constitution to 
control the Federal budget deficit on May 13, 2011. Testimony 
was received from the Honorable Bob Goodlatte; David Primo, 
Associate Professor of Political Science, University of 
Rochester, and Senior Scholar, Mercatus Center, George Mason 
University; Robert Greenstein, Founder and President, Center on 
Budget and Policy Priorities; and Andrew Moylan, Vice President 
of Government Affairs, National Taxpayers Union. Additional 
material was submitted by Pass the Balanced Budget Amendment, 
Renewing American Leadership Action, National Tax Limitation 
Committee, and the 60 Plus Association.

                        Committee Consideration

    On June 15, 2011, the Committee met in open session and 
ordered the joint resolution H.J. Res. 1 favorably reported 
with an amendment, by a rollcall vote of 20 to 12, a quorum 
being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following rollcall votes occurred during the Committee's 
consideration of H.J. Res. 1.
    1. An amendment by Mr. Conyers: (1) exempting from the 
calculation of total receipts all receipts derived from the 
Federal Hospital Insurance Trust Fund, and (2) exempting from 
the calculation of total outlays all outlays of the Federal 
Hospital Insurance Trust Fund and the Federal Supplementary 
Medical Insurance Trust Fund. Defeated 9 to 17.

                                                 ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................                              X
Mr. Issa........................................................
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................
                                                                 -----------------------------------------------
    Total.......................................................              9              17
----------------------------------------------------------------------------------------------------------------

    2. An amendment by Mr. Gohmert to lower the annual cap on 
Federal outlays from 20 percent of the economic output of the 
United States to 18 percent of economic output. Approved 13 to 
11.

                                                 ROLLCALL NO. 2
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................              X
Mr. Gallegly....................................................              X
Mr. Goodlatte...................................................
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................              X
Mr. Franks......................................................              X
Mr. Gohmert.....................................................              X
Mr. Jordan......................................................              X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Griffin.....................................................              X
Mr. Marino......................................................              X
Mr. Gowdy.......................................................              X
Mr. Ross........................................................              X
Ms. Adams.......................................................              X
Mr. Quayle......................................................              X
Mr. Conyers, Jr., Ranking Member................................                              X
Mr. Berman......................................................
Mr. Nadler......................................................                              X
Mr. Scott.......................................................                              X
Mr. Watt........................................................                              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................
Ms. Waters......................................................                              X
Mr. Cohen.......................................................                              X
Mr. Johnson.....................................................                              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu.........................................................                              X
Mr. Deutch......................................................                              X
Ms. Sanchez.....................................................
                                                                 -----------------------------------------------
    Total.......................................................             13              11
----------------------------------------------------------------------------------------------------------------

    3. An amendment by Mr. Watt to strike the balanced budget 
constitutional amendment's requirements that: (1) the public 
debt limit shall not be increased unless three-fifths of each 
House votes to provide for such an increase, and (2) a bill to 
increase revenue shall not become law unless three-fifths of 
each House votes to provides for such an increase. Defeated 7 
to 17.

                                                 ROLLCALL NO. 3
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................
Mr. Gallegly....................................................
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................                              X
Mr. Issa........................................................
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................
                                                                 -----------------------------------------------
    Total.......................................................              7              17
----------------------------------------------------------------------------------------------------------------

    4. An amendment by Mr. Nadler to exclude oil and natural 
gas companies with annual gross receipts in excess of $10 
billion from the balanced budget constitutional amendment's 
requirement that a bill to raise revenue must be approved by 
three-fifths of each House. Defeated 7 to 12.

                                                 ROLLCALL NO. 4
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................
Mr. Chabot......................................................
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................                              X
Mr. Griffin.....................................................
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson.....................................................
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................
                                                                 -----------------------------------------------
    Total.......................................................              7              12
----------------------------------------------------------------------------------------------------------------

    5. An amendment by Mr. Nadler to allow Congress to waive 
the requirements of the balanced budget constitutional 
amendment for up to 2 fiscal years if real economic growth is 
or will be negative for two consecutive quarters. Defeated 9 to 
17.

                                                 ROLLCALL NO. 5
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................                              X
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................                              X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................                              X
Mr. Poe.........................................................                              X
Mr. Chaffetz....................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................
                                                                 -----------------------------------------------
    Total.......................................................              9              17
----------------------------------------------------------------------------------------------------------------

    6. An amendment by Mr. Scott to strike the balanced budget 
constitutional amendment's requirement that a bill to increase 
revenue shall not become law unless three-fifths of each House 
votes to provide for such an increase. Defeated 7 to 16.

                                                 ROLLCALL NO. 6
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................                              X
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................                              X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................                              X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................
                                                                 -----------------------------------------------
    Total.......................................................              7              16
----------------------------------------------------------------------------------------------------------------

    7. An amendment by Mr. Scott to strike the balanced budget 
constitutional amendment's requirement that the public debt 
limit shall not be increased unless three-fifths of each House 
votes to provide for such an increase. Defeated 7 to 17.

                                                 ROLLCALL NO. 7
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................                              X
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................                              X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................
                                                                 -----------------------------------------------
    Total.......................................................              7              17
----------------------------------------------------------------------------------------------------------------

    8. An amendment by Ms. Jackson Lee to allow Congress to 
waive the requirements of the balanced budget constitutional 
amendment for any fiscal year in which the United States is 
engaged in the use of military force. Defeated 5 to 18.

                                                 ROLLCALL NO. 8
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................                              X
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................                              X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................
Mr. Scott.......................................................              X
Mr. Watt........................................................                              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu.........................................................              X
Mr. Deutch......................................................
Ms. Sanchez.....................................................
                                                                 -----------------------------------------------
    Total.......................................................              5              18
----------------------------------------------------------------------------------------------------------------

    9. An amendment by Mr. Conyers: (1) exempting from the 
calculation of total receipts all receipts derived from the 
Federal Old-Age and Survivors Insurance Trust Fund and the 
Federal Disability Insurance Trust Fund, and (2) exempting from 
the calculation of total outlays all outlays of the Federal 
Old-Age and Survivors Insurance Trust Fund and the Federal 
Disability Insurance Trust Fund. Defeated 8 to 19.

                                                 ROLLCALL NO. 9
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................                              X
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................                              X
Mr. Issa........................................................                              X
Mr. Pence.......................................................
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................                              X
Mr. Poe.........................................................
Mr. Chaffetz....................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................                              X
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................
                                                                 -----------------------------------------------
    Total.......................................................              8              19
----------------------------------------------------------------------------------------------------------------

    10. An amendment by Mr. Jordan to require a two-thirds, 
rather than a three-fifths, majority of each House of Congress 
to pass a bill to increase revenue. Approved 17 to 8.

                                                 ROLLCALL NO. 10
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................              X
Mr. Gallegly....................................................              X
Mr. Goodlatte...................................................              X
Mr. Lungren.....................................................              X
Mr. Chabot......................................................              X
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes......................................................              X
Mr. King........................................................              X
Mr. Franks......................................................              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................              X
Mr. Poe.........................................................
Mr. Chaffetz....................................................              X
Mr. Griffin.....................................................              X
Mr. Marino......................................................              X
Mr. Gowdy.......................................................              X
Mr. Ross........................................................              X
Ms. Adams.......................................................              X
Mr. Quayle......................................................              X
Mr. Conyers, Jr., Ranking Member................................                              X
Mr. Berman......................................................
Mr. Nadler......................................................                              X
Mr. Scott.......................................................                              X
Mr. Watt........................................................                              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................                              X
Ms. Waters......................................................
Mr. Cohen.......................................................
Mr. Johnson.....................................................                              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................
Ms. Chu.........................................................                              X
Mr. Deutch......................................................                              X
Ms. Sanchez.....................................................
                                                                 -----------------------------------------------
    Total.......................................................             17               8
----------------------------------------------------------------------------------------------------------------

    11. Two amendments by Ms. Jackson Lee considered en bloc 
to: (1) require a three-fifths majority of each House to pass a 
bill to limit funding for or privatize Social Security or 
Medicare, and (2) require a three-fifths majority of each House 
to pass a bill to limit funding for Medicaid. Defeated 7 to 21.

                                                 ROLLCALL NO. 11
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................                              X
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................                              X
Mr. Issa........................................................
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................                              X
Mr. Jordan......................................................                              X
Mr. Poe.........................................................
Mr. Chaffetz....................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................                              X
Mr. Watt........................................................                              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................
Mr. Quigley.....................................................                              X
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................
                                                                 -----------------------------------------------
    Total.......................................................              7              21
----------------------------------------------------------------------------------------------------------------

    12. An amendment by Mr. Deutch to exempt from the balanced 
budget constitutional amendment's calculation of total outlays, 
outlays authorized under section 215(i) of the Social Security 
Act. Defeated 12 to 15.

                                                 ROLLCALL NO. 12
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................                              X
Mr. Sensenbrenner, Jr...........................................
Mr. Coble.......................................................
Mr. Gallegly....................................................                              X
Mr. Goodlatte...................................................                              X
Mr. Lungren.....................................................                              X
Mr. Chabot......................................................
Mr. Issa........................................................
Mr. Pence.......................................................                              X
Mr. Forbes......................................................                              X
Mr. King........................................................                              X
Mr. Franks......................................................                              X
Mr. Gohmert.....................................................
Mr. Jordan......................................................                              X
Mr. Poe.........................................................
Mr. Chaffetz....................................................                              X
Mr. Griffin.....................................................                              X
Mr. Marino......................................................                              X
Mr. Gowdy.......................................................                              X
Mr. Ross........................................................
Ms. Adams.......................................................                              X
Mr. Quayle......................................................                              X
Mr. Conyers, Jr., Ranking Member................................              X
Mr. Berman......................................................
Mr. Nadler......................................................              X
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Ms. Chu.........................................................              X
Mr. Deutch......................................................              X
Ms. Sanchez.....................................................
                                                                 -----------------------------------------------
    Total.......................................................             12              15
----------------------------------------------------------------------------------------------------------------

    13. Motion to report H.J. Res. 1 favorably, as amended. 
Passed 20 to 12.

                                                 ROLLCALL NO. 13
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman.............................................              X
Mr. Sensenbrenner, Jr...........................................              X
Mr. Coble.......................................................
Mr. Gallegly....................................................              X
Mr. Goodlatte...................................................              X
Mr. Lungren.....................................................              X
Mr. Chabot......................................................
Mr. Issa........................................................              X
Mr. Pence.......................................................              X
Mr. Forbes......................................................              X
Mr. King........................................................              X
Mr. Franks......................................................              X
Mr. Gohmert.....................................................              X
Mr. Jordan......................................................              X
Mr. Poe.........................................................              X
Mr. Chaffetz....................................................              X
Mr. Griffin.....................................................              X
Mr. Marino......................................................              X
Mr. Gowdy.......................................................              X
Mr. Ross........................................................              X
Ms. Adams.......................................................              X
Mr. Quayle......................................................              X
Mr. Conyers, Jr., Ranking Member................................                              X
Mr. Berman......................................................                              X
Mr. Nadler......................................................                              X
Mr. Scott.......................................................                              X
Mr. Watt........................................................                              X
Ms. Lofgren.....................................................
Ms. Jackson Lee.................................................                              X
Ms. Waters......................................................                              X
Mr. Cohen.......................................................                              X
Mr. Johnson.....................................................                              X
Mr. Pierluisi...................................................                              X
Mr. Quigley.....................................................
Ms. Chu.........................................................                              X
Mr. Deutch......................................................                              X
Ms. Sanchez.....................................................
                                                                 -----------------------------------------------
    Total.......................................................             20              12
----------------------------------------------------------------------------------------------------------------

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the joint resolution, H.J. Res. 1, the following 
estimate and comparison prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 21, 2011.
Hon. Lamar Smith, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.J. Res 1, a joint 
resolution proposing a balanced budget amendment to the 
Constitution of the United States.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Barry Blom.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                  Director.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member
H.J. Res. 1--A joint resolution proposing a balanced budget amendment 
        to the Constitution of the United States.
    H.J. Res. 1 would propose an amendment to the Constitution 
that would prohibit total outlays of the United States from 
exceeding total receipts in a fiscal year; such a requirement 
could be overridden by a three-fifths vote in each House. The 
amendment also would require that:

         LTotal outlays in any fiscal year not exceed 
        18 percent of gross domestic product (GDP), unless the 
        Congress approves a specific increase over that amount 
        by a two-thirds vote;

         LA three-fifths vote be taken in each House to 
        raise the limit on federal debt held by the public and 
        a two-thirds vote to approve any bill that increases 
        revenue; and

         LThe proposed budget submitted by the 
        President be in balance.

    Such provisions could be waived for any fiscal year in 
which a declaration of war is in effect or if a majority of 
each House determines that the United States is engaged in a 
military conflict that poses an imminent and serious military 
threat to national security.
    The amendment would have to be ratified by three-fourths of 
the states within 7 years of its submission for ratification, 
although no state would be required to take action on the 
resolution, either to reject or approve it. If ratified by the 
required number of states, the amendment would take effect 
beginning with fiscal year 2018 or the second fiscal year after 
its ratification, whichever is later.
    The budgetary impact of adopting this amendment to the 
Constitution is very uncertain because it depends on when it 
would take effect and the extent to which the Congress would 
exercise the discretion provided by the amendment to approve 
budget deficits. Ultimately, changes in budgetary outcomes 
would depend on what future legislation was adopted to meet the 
requirements set by the amendment and how effective that 
legislation would be in meeting those targets.
    Under the assumptions governing CBO's latest baseline 
projections (namely that current laws remain unchanged), the 
budget deficit in 2018--the first year the amendment could 
potentially take effect--would total $585 billion (2.8 percent 
of GDP). Under those assumptions, outlays in 2018 would equal 
23.2 percent of GDP, while revenues would total 20.4 percent. 
Outlays have averaged close to 21 percent of GDP over the past 
40 years.
    By itself, enacting H.J. Res. 1 would not affect direct 
spending or revenues; therefore, pay-as-you-go procedures do 
not apply.
    H.J. Res. 1 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Barry Blom. The 
estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.J. 
Res. 1 proposes an amendment to the U.S. Constitution to 
require the annual Federal budget to be balanced (unless three-
fifths of each House votes to pass a budget in which total 
outlays exceed total receipts) to restore fiscal discipline 
over Federal spending and protect the country's future economic 
strength and national standard of living.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.J. Res. 1 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.

                      Section-by-Section Analysis

    Section 1. This section provides that total outlays for any 
fiscal year shall not exceed total receipts for that fiscal 
year, unless three-fifths of the whole number of each House of 
Congress provide by law for a specific excess of outlays over 
receipts by a rollcall vote. This provision forces Congress to 
commit itself each year to implementing a balanced budget, but 
recognizes the need for congressional flexibility to respond 
appropriately to unforeseen circumstances.
    Section 2. This section provides that total outlays for any 
fiscal year cannot exceed eighteen percent of annual economic 
output of the United States, unless two-thirds of each House of 
Congress approves a specific increase in outlays above this 
amount. This limit reflects the share of economic output that 
Federal revenues have typically represented since World War II. 
Because spending should be linked to the average and customary 
revenues of the Federal Government if the annual budget is to 
be balanced, capping total outlays at eighteen percent of 
economic output furthers the overall purpose of the balanced 
budget amendment.
    Section 3. This section provides that the limit on the 
public debt of the United States cannot be increased unless 
three-fifths of both Houses of Congress provide for an increase 
by law. Section 3 is designed to ensure that increases in the 
ceiling on debt held by the public require greater consensus 
than ordinary legislation. Such a requirement reflects 
sensitivity to the impact debt increases have on the interest 
burden imposed on future generations.
    Section 4. This section requires the President to transmit 
a balanced budget to Congress prior to each fiscal year. It 
imposes a responsibility on the Executive Branch to make 
difficult choices among competing national priorities rather 
than permitting the President to distance himself (or herself) 
from the hard work of proposing spending cuts. The goal of 
bringing outlays into line with receipts is important enough to 
provide roles for both the Executive and Legislative Branches.
    Section 5. This section imposes a supermajority voting 
requirement to increase Federal revenues. A bill increasing the 
Federal revenues must have the support of two-thirds of each 
House's total membership. The objective is to discourage 
excessive reliance on tax increases--rather than spending 
cuts--to achieve a balanced budget. Tax increases can depress 
economic activity and prove counterproductive to deficit 
reduction efforts.
    Section 6. This section delineates circumstances that 
permit a waiver of the balanced budget amendment's provisions. 
Congressional authority to exercise a waiver ``for any fiscal 
year in which a declaration of war is in effect'' provides a 
very limited remedy because declarations of war are 
anachronistic in modern times. United States military actions 
since World War II have not involved declarations of war. The 
waiver based on an ``imminent and serious military threat to 
national security'' is more likely to be utilized. Under the 
language of Section 6, Congress may declare such a threat by 
enacting a joint resolution, supported by a majority of each 
House's total membership and signed into law by the President. 
The need for congressional action on a joint resolution and 
presidential assent (or a veto override) helps to ensure that 
this waiver mechanism will not be abused.
    Section 7. This section provides for Congress to ``enforce 
and implement this article by appropriate legislation.'' This 
mandate for continued congressional involvement recognizes that 
the broad language of the constitutional amendment cannot be 
effectuated without an active congressional role in delineating 
the details of implementation.
    Section 8. This section defines ``total outlays'' and 
``total receipts''--terms that appear in Section 1. All monies 
received by the Treasury except borrowed funds are embraced by 
the term ``total receipts,'' and all disbursements from the 
Treasury except funds for repayment of principal on the Federal 
debt are embraced by the term ``total outlays.''
    Section 9. This section delineates the effective date of 
the constitutional amendment. It will take effect at the 
beginning of the first fiscal year after December 31, 2016, or 
on the second fiscal year beginning after its ratification, 
whichever is later. Since the Article's preamble requires 
ratification by three-fourths of the states ``within 7 years 
after the date of its submission for ratification,'' Section 
9's effective date provision is not open-ended. If Congress 
submits the balanced budget constitutional amendment to the 
states for ratification this year, the 7-year deadline will 
expire in the year 2018 and the amendment will take effect--if 
at all--not later than the beginning of fiscal year 2021.
    Section 9 contemplates a transition period of sufficient 
duration to permit the United States to move from deficit 
spending to a balanced budget without major economic 
disruption. Although substantial spending cuts will require 
many adjustments, the implementation date provided for in 
section 9 is sufficiently long to facilitate an orderly 
transition.

                            Dissenting Views

                            I. INTRODUCTION

    The Balanced Budget Amendment to the U.S. Constitution (BBA 
or Amendment) ostensibly mandates a balanced budget in each 
fiscal year beginning as soon as 2018. In reality, however, 
this Amendment does a great deal more, much of which is 
inimical to the fundamental tenets of a republican form of 
government. It may, in fact, actually undermine the goal of a 
balanced budget. The BBA threatens the survival of such 
critical programs as Social Security and Medicare, which serve 
as fundamental safety nets for millions of hardworking 
Americans. It undermines other important priorities including 
national security, veterans' health care, aid to education and 
the poor, support for family farmers, a vital national 
infrastructure, and all manner of government functions that are 
necessary to the needs of a western industrialized democracy. 
The Amendment skews all future budget debates in favor of deep 
spending cuts while virtually taking any additional revenues, 
or tax reforms, off the table. Its shortsighted restrictions 
threaten the standing of the dollar as a stable, reliable 
global reserve currency by undermining confidence in the full 
faith and credit of the United States in a manner unprecedented 
in the Nation's history.
    And, the BBA could hobble the ability of the Federal 
Government to promote growth during economic downturns and to 
invest in future needs, thereby threatening to condemn America 
to permanent status as a second rate economy.
    The BBA is opposed by numerous organizations committed to 
the economic well being of the United States as well as 
organizations concerned with the needs of the elderly, the 
middle class, our children, and other basic needs of national 
importance. These groups include a coalition of 123 religious, 
labor, education, civil rights, child advocacy, and other 
organizations;\1\ a coalition of six national environmental 
organizations representing more than one million members and 
activists;\2\ OMB Watch;\3\ AFL-CIO;\4\ Service Employees 
International Union;\5\ the American Federation of State, 
County, and Municipal Employees;\6\ the National Education 
Association;\7\ the National Women's Law Center;\8\ Committee 
for Education Funding;\9\ and the Coalition on Human Needs.\10\
---------------------------------------------------------------------------
    \1\Letter from 9to5 National Association of Working Women, AFL-CIO; 
All Education Matters; Alliance for Retired Americans; American 
Association of People with Disabilities; American Association of 
University Women; American Federation of Government Employees; American 
Federation of State, County, and Municipal Employees; American 
Federation of Teachers; American Network of Community Options and 
Resources; The Arc of the United States; Asian American Justice Center; 
Association of Women's Health, Obstetric and Neonatal Nurses; Bazelon 
Center for Mental Health Law; Campaign for America's Future; Campaign 
for Community Change; CenterLink: The Community of LGBT Centers; 
Central Conference of American Rabbis; Corporation for Enterprise 
Development; Children Now; Children's Defense Fund; Cities for 
Progress, Institute for Policy Studies; the City Project, CLASP; 
Coalition on Human Needs; Commission on Social Action of Reform 
Judaism; Committee for Education Funding; Communications Workers of 
America; Community Action Partnership; Demos; Direct Care Alliance; 
Disability Rights and Education and Defense Fund; Easter Seals; Equal 
Justice Society; Families USA, Family Equality Council; Farmworker 
Justice; Food Research and Action Center; Friends of the Earth; Gay, 
Lesbian and Straight Education Network; Health & Disability Advocates; 
Health Care for America Now; International Union, United Automobile, 
Aerospace and Agricultural Implement Workers of America (UAW); Japanese 
American Citizens League; Jewish Funds for Justice; Jewish Labor 
Committee; Latinos for a Secure Retirement; Lawyers' Committee for 
Civil Rights Under Law; Leadership Conference on Civil and Human 
Rights; League of Women Voters of the U.S.; Legal Momentum; Mental 
Health America; Minority Business Enterprise Legal Defense and 
Education Fund; NAACP; NAACP Legal Defense and Educational Fund; 
National Advocacy Center of the Sisters of the Good Shepherd; National 
African American Drug Policy Coalition; National AIDS Housing 
Coalition; National Alliance on Mental Illness; National Asian Pacific 
American Women's Forum; National Association for Children's Behavioral 
Health; National Association for Hispanic Elderly; National Association 
of Colored Women's Clubs; National Assocation of Human Rights Workers; 
National Association of Social Workers; National Center for Lesbian 
Rights; National Center for Transgeder Equality; National Coalition for 
Asian Pacific Americans Community Development; National/Community 
Reinvestment Coalition; National Congress of American Indians; National 
Congress of Black Women; National Council of Jewish Women; National 
Council on Independent Living; National Disability Rights Network; 
National Education Association; National Employment Law Project; 
National Fair Housing Alliance; National Focus on Gender Education; 
National Gay and Lesbian Task Force Action Fund; National Health Law 
Program; National Immigrration Law Center; National Korean American 
Service & Education Consortium; National Latina Institutue for 
Reproductive Health; National Legal Aid & Defender Association; 
National Low Income Housing Coalition; National Organization for Women; 
National Partnership for Women & Families; National Priorities Project; 
National Senior Citizens Law Center; National Skills Coalition; 
National Urban League; National Women's Law Center; NETWOR, A National 
Catholic Social Justice Lobby; Not Dead Yet; Office of Gender and 
Racial Justice, RE&WM, GAMC, Presbyterian Church (USA); OMB Watch; 
Paralyzed Veterans of America; PHI--Quality Care Through Quality Jobs; 
Physicians for Social Responsibility; PolicyLink; Poverty & Race 
Research Action Council; ProgressNow; Racial and Ethnic Health 
Disparities Coalition; RESULTS: The Power to End Poverty; SER--Jobs for 
Progress National; Service Employees International Union; Sexuality 
Information and Education Council of the U.S.; Sisters of Mercey 
Institute Justice Team; Social Security Works; South Asian Americans 
Leading Together; Southeast Asia Resource Action Center; Southern 
Poverty Law Center; Unitarian Universalist Association of 
Congregations; United Church of Christ, Justice and Witness Ministries; 
United Food and Commercial Workers International Union; United for a 
Fair Economy; United States Student Association; United Steelworkers; 
U.S. Psychiatric Rehabilitation Association; USAction; Voices for 
Progress; Wider Opportunities for Women; Women's Missionary Society of 
the African Methodist Episcopal Church to Members of the House 
Judiciary Committee (June 1, 2011) (on file with the Subcommittee on 
the Constitution).
    \2\Letter from Defenders of Wildlife, Friends of the Earth; 
National Resources Defense Council, Population Action International, 
Public Citizen, Wilderness Society, Voices for Progress to House 
Judiciary Committee Chairman Lamar Smith and Ranking Member John 
Conyers, Jr. (June 15, 2011) (on file with the Subcommittee on the 
Constitution).
    \3\Letter from Craig Jennings, Director, Federal Fiscal Policy, OMB 
Watch, to House Judiciary Committee Chairman Lamar Smith and Ranking 
Member John Conyers, Jr. (June 1, 2011) (on file with the Subcommittee 
on the Constitution).
    \4\Letter from William Samuel, Director, Government Affairs 
Department, AFL-CIO, to House Judiciary Committee Chairman Lamar Smith 
and Ranking Member John Conyers, Jr. (June 2, 2011) (on file with the 
Subcommittee on the Constitution).
    \5\Letter from Michelle Nawar, Director of Legislation, Service 
Employees International Union, to House Judiciary Committee Chairman 
Lamar Smith and Ranking Member John Conyers, Jr. (June 3, 2011) (on 
file with the Subcommittee on the Constitution).
    \6\Letter from Charles M. Loveless, Director of Legislation, 
AFSCME, to Members of the U.S. House of Representative (June 1, 2011) 
(on file with the Subcommittee on the Constitution).
    \7\Letter from Kim Anderson, Director of Government Relations, and 
Mary Kusler, Manager of Federal Advocacy, National Education 
Association, to Members of the U.S. House of Representatives (June 2, 
2011) (on file with the Subcommittee on the Constitution).
    \8\Letter from Nancy Duff Campbell, Co-President, and Joan 
Entmacher, Vice President for Family Economic Security, National 
Women's Law Center, to House Judiciary Committee Chairman Lamar Smith 
and Ranking Member John Conyers, Jr. (June 1, 2011) (on file with the 
Subcommittee on the Constitution).
    \9\Letter from Abigail Evans, President, and Joel Packer, Executive 
Director, Committee for Education Funding, to Members of the House 
Judiciary Committee (June 14, 2011) (on file with the Subcommittee on 
the Constitution).
    \10\Letter from Deborah Weinstein, Executive Director, Coalition on 
Human Needs, to House Judiciary Committee Chairman Lamar Smith and 
Ranking Member John Conyers, Jr. (June 3, 2011) (on file with the 
Subcommittee on the Constitution).
---------------------------------------------------------------------------
    For these reasons, and those discussed below, we 
respectfully dissent and urge our colleagues to reject this 
dangerous and destructive constitutional amendment.

  II. THERE IS NO NEED FOR A CONSTITUTIONAL AMENDMENT TO BALANCE THE 
                                 BUDGET

    During the 1990's, Congress was able to eliminate the 
deficit and run surpluses without the aid of a balanced budget 
amendment. It took the reckless fiscal policies of President 
George W. Bush and a Republican Congress to turn that record 
surplus into record deficits in record time. That 
``accomplishment'' is not evidence that our Constitution is in 
need of amendment. Rather, it demonstrates the result of 
disastrous choices made by those in power. The record calls not 
for a constitutional amendment, but for greater political 
courage, accountability, prudence, foresight, and restraint by 
our elected officials, including some of those who now support 
this Amendment.
    While waging war on two fronts, the Bush Administration 
championed tax cuts for the wealthy and increases in defense 
spending as well as new expenditures for such salutary programs 
as Medicare Part D. These were among the significant 
contributors to the resulting deficit in the Federal budget. In 
particular, tax cuts in 2001 and 2003 caused revenue to fall as 
of 2004 by more than 4 percentage points of GDP. At the same 
time, Federal spending rose from 18.2 percent of GDP in 2000 to 
19.6 percent of GDP in 2007, all while the economy was showing 
signs of weakness, leading to its near collapse just a year 
later.\11\
---------------------------------------------------------------------------
    \11\Mindy R. Levit, The Federal Debt: An Analysis of Movements from 
World War II to the Present, Congressional Research Service, 
Congressional Research Service Report RL34712 (Sept. 17, 2010).
---------------------------------------------------------------------------
    From 2001 to 2010, the Bush Administration's tax cuts added 
$2.6 trillion to the public debt,\12\ nearly fifty percent of 
the total debt accrued during this period.\13\ Congressional 
Budget Office (CBO) and Joint Committee on Taxation (JCT) 
projections estimate that maintaining the tax cuts of 2001 and 
2003 (which were to sunset in 2010) for the wealthiest 2 
percent of Americans will reduce revenues by about $690 billion 
over the next 10 years.\14\ When the interest payments are 
factored in to these numbers, the true price of maintaining the 
tax cuts for the wealthy jumps by almost $140 billion.\15\ In 
total, keeping the cuts for the richest 2 percent of Americans 
will cost almost $830 billion over the next 10 years.\16\
---------------------------------------------------------------------------
    \12\James Horney & Kathy Ruffing, Economic Downturn and Bush 
Policies Continue to Drive Large Projected Deficits, Center on Budget 
and Policy Priorities, (May 10, 2011), available at http://
www.cbpp.org/cms/index.cfm?fa=view&id=3490.
    \13\OMB, Historical Tables: Table 7.1--Federal Debt at the End of 
the Year: 1940-2016, (2011), available at http://www.whitehouse.gov/
sites/default/files/omb/budget/fy2012/assets/hist07zl1.xls (last 
visited June 20, 2011).
    \14\In a January 2010 report, ``The Budget and Economic Outlook: 
Fiscal Years 2010 to 2020,'' the CBO projects that a full extension of 
Pres. Bush's tax cuts, plus a permanent fix to the alternative minimum 
tax, will cost $3.7 trillion over 10 years, not including debt service 
costs. The JCT estimated in a March 2010 report, ``Present Law and The 
President's Fiscal Year 2011 Budget Proposals Related to Selected 
Individual Income Tax Provisions Scheduled to Expire Under the Sunset 
Provisions of the Economic Growth and Tax Relief Reconciliation Act of 
2001,'' that the cost of extending just those cuts that affect people 
making less than $250,000 and permanently fixing the alternative 
minimum tax will cost $3 trillion. The difference--a bit less than $700 
billion--is the cost of extending just those cuts for the wealthiest. 
See Michael Linden & Michael Ettlinger, Three Good Reasons to Let the 
High-End Bush Tax Cuts Disappear This Year, (July, 29, 2010) available 
at http://www.americanprogress.org/issues/2010/07/let_cuts_expire.html.
    \15\The interest rates implied in the CBO's baseline budget 
projection used in the March 2010 report entitled, ``An Analysis of the 
President's Budgetary Proposals for Fiscal Year 2011,'' were used to 
calculate the additional debt service cost. Id.
    \16\Id.
---------------------------------------------------------------------------
    While revenues were decreasing as a result of the Bush tax 
cuts, defense spending jumped dramatically to fund both the 
Iraq and Afghanistan Wars. There were also substantial spending 
increases for enhanced security measures necessitated by the 
Global War on Terror, including the creation of the Department 
of Homeland Security. During the 7 years President Bush was in 
office after the terrorist attacks of September 11, 2001, 
nearly $800 billion was spent on these two wars and enhanced 
security measures.\17\
---------------------------------------------------------------------------
    \17\Amy Belasco, The Cost of Iraq, Afghanistan, and Other Global 
War on Terror Operations Since 9/11, Congressional Research Service 
Report RL33110, at 3 Table 1: Estimated War Funding by Operations: 
FY2001-FY2012 War Request (Mar. 29, 2011).
---------------------------------------------------------------------------
    Among the Bush Administration's other initiatives was the 
creation of Medicare Part D in 2003. This worthwhile program, 
unfortunately, was unfunded. Its cost has been estimated by the 
Congressional Budget Office at $395 billion over its first 10 
years.\18\
---------------------------------------------------------------------------
    \18\Marc Labonte & Margot L. Crandall-Hollick, The Impact of Major 
Legislation on Budget Deficits: 2001 to 2010, CRS Report R41134 (May 
20, 2011).
---------------------------------------------------------------------------

         III. THE BALANCED BUDGET AMENDMENT IS ANTI-DEMOCRATIC

    Apart from its economic weaknesses, the proposed BBA 
undercuts the very principle upon which our Nation was founded, 
namely, majority rule. By requiring a supermajority to pass 
certain legislation, the Amendment would shift power away from 
the majority of the American people to a determined minority.
    The framers of the Constitution wisely rejected the 
principle of requiring a supermajority for basic government 
functions.\19\ James Madison vehemently argued against 
supermajorities. He stated:
---------------------------------------------------------------------------
    \19\It is significant to note that, because of population patterns, 
Senators representing some 7.5 percent of the population could prevent 
a bill from obtaining a two-thirds majority. U.S. Census Bureau, 
available at http://2010.census.gov/2010census/data/apportionment-pop-
text.php (last visited June 20, 2011).

        That some advantages might have resulted from such a 
        precaution cannot be denied. It might have been an 
        additional shield to some particular interests, and 
        another obstacle generally to hasty and partial 
        measures. But these considerations are outweighed by 
        the inconveniences in the opposite scale. In all cases 
        where justice or the general good might require new 
        laws to be passed, or active measures to be pursued, 
        the fundamental principle of free government would be 
        reversed. It would be no longer the majority that would 
        rule: the power would be transferred to the minority. 
        Were the defensive privilege limited to particular 
        cases, an interested minority might take advantage of 
        it to screen themselves from equitable sacrifices to 
        the general weal, or, in particular emergencies to 
        extort unreasonable indulgences.\20\
---------------------------------------------------------------------------
    \20\The Federalist No. 58, at 361 (James Madison).

At a Constitution Subcommittee hearing during the 104th 
Congress, Rep. Henry J. Hyde (R-IL), then-Chair of the House 
---------------------------------------------------------------------------
Committee on the Judiciary, echoed similar concerns:

        I am troubled by the concept of divesting a Member of 
        the full import of his or her vote. You are diluting 
        the vote of Members by requiring a supermajority of 
        them to do something as basic to government as acquire 
        the revenue to run government. It is a diminution. It 
        is a disparagement. It is a reduction of the impact, 
        the import, of one man, one vote.\21\
---------------------------------------------------------------------------
    \21\Proposing An Amendment to the Constitution of the United States 
to Require Two-Thirds Majorities for Bills Increasing Taxes: Hearing on 
H.J. Res. 159, Before the Subcomm. on the Constitution of the House 
Comm. on the Judiciary, 104th Cong., 2d Sess. 107 (1996).

    Supporters of the BBA have sought to justify the departure 
from majority rule by pointing to other provisions in the 
Constitution that require a two-thirds vote, such as approving 
a treaty or obtaining a conviction in a congressional 
impeachment trial.\22\ This argument, however, overlooks the 
fact that not one of these supermajority requirements pertain 
to the day-to-day operations of the government. Limiting such 
congressional authority is an invitation to gridlock.
---------------------------------------------------------------------------
    \22\There are 9 matters for which a supermajority vote is required 
under the Constitution: art. I, Sec. 3, cl. 6 (conviction in 
impeachment trials); art. I, Sec. 5, cl. 2 (expulsion of a Member of 
Congress); art. 1, Sec. 7, cl. 2 (override a Presidential veto); art. 
II, Sec. 1, cl. 3 (quorum shall consist of one or more members from 
two-thirds of the States to elect the President); art. II, Sec. 2, cl. 
2 (consent to a treaty); art. V (proposing amendments to the 
Constitution); amend. XII (quorum of members representing two-thirds of 
the States to elect the President and the Vice President); amend. XIV, 
Sec. 3 (to remove disability); and amend. XXV, Sec. 4 (removal of 
President for disability).
---------------------------------------------------------------------------
    Rep. Melvin L. Watt (D-NC) offered an amendment that would 
have struck the supermajority requirements to increase revenues 
and to raise the debt limit. The amendment was rejected on a 
party line vote.\23\
---------------------------------------------------------------------------
    \23\Unofficial Tr. of Markup of H.J. Res. 1, Proposing a Balanced 
Budget Amendment to the Constitution of the United States, Before the 
H. Comm. on the Judiciary, 112th Cong. at 6-39 (June 3, 2011).
---------------------------------------------------------------------------
    The BBA would also open the possibility of life-tenured 
Federal judges making decisions on taxing and spending policy 
instead of directly-elected and accountable Members of Congress 
and the President. This concern has long-dogged proposals that 
would place budgetary decisions in the Constitution, but which 
has consistently been dismissed by proponents as not worthy of 
consideration. For example, when the BBA was being considered 
by Congress in 1990, former U.S. Court of Appeals Judge Robert 
Bork issued the following warning:

        Scores or hundreds of suits might be filed in Federal 
        district courts around the country. Many of these suits 
        would be founded on different theories of how the 
        amendment had been violated. The confusion, not to 
        mention the burden on the court system, would be 
        enormous. Nothing would be settled, moreover, until one 
        or more of such actions finally reached the Supreme 
        Court. That means we could expect a decision [about a 
        given fiscal year 5 years after it has passed]. Nor is 
        it at all clear what could be done if the Court found 
        that the amendment had been violated 5 years 
        earlier.\24\
---------------------------------------------------------------------------
    \24\Letter from Robert H. Bork to Thomas S. Foley, Speaker of the 
House, (July 10, 1990), reprinted in Op. Ed., Robert H. Bork, A 
Seasoned Argument, Wash. Post, at A23 (June 10, 1992).

The BBA clearly presents the possibility that courts would be 
asked to determine whether legislation did in fact increase 
revenues, whether outlays did in fact exceed receipts, and any 
number of other complex budgetary issues that would acquire a 
constitutional dimension. It also begs the question whether a 
court, in crafting a remedy for a violation, could order cuts 
to spending or increases in taxes in order to meet the 
requirements of the BBA.

   IV. THE AMENDMENT IS NOT LIMITED TO A BALANCED BUDGET REQUIREMENT

    While the BBA purports to require a balanced budget and to 
provide the tools necessary to facilitate and enforce that 
requirement, several provisions are either unrelated to that 
goal, or would make a balanced budget more difficult to attain.
A. Supermajority Requirements Will Promote Greater Deficits.
    While the ostensible purpose of the supermajority 
requirements in the Amendment are intended to make it more 
difficult for Congress to exceed the balanced budget 
requirement, as Rep. Robert C. ``Bobby'' Scott (D-VA) argues, 
the need to obtain a three-fifths vote to run a deficit may 
require a great deal more legislative ``horse-trading'' in 
order to secure the necessary number of votes.\25\ We have all 
been involved in the legislative process generally, and the 
budgetary process in particular, long enough to have witnessed 
the extent to which legislative leaders have had to accede to 
individual members' demands for specific pork-barrel projects, 
in order to gather the needed votes to pass legislation, 
raising the overall cost.
---------------------------------------------------------------------------
    \25\During the markup of H.J. Res. 1, Rep. Scott made the following 
remarks:

      The fact of the matter is the core provision of this 
      underlying constitutional amendment will make it impossible 
      to ever balance the budget from a practical point of view. 
      If you need 60 percent to pass the budget--and you are 
      going to need 60 percent. Any budget on the table requires 
      60 percent. Now, are you more likely to pass the Republican 
      Study Group and explain to your constituents 70 percent 
      cuts or, since you need 60 percent anyway, are you more 
      likely to have more tax cuts and more spending increases? 
      When you get to the last couple of votes to pass a tough 
      bill like a tough budget, the last couple of votes you pick 
      up are not--and I am not going to vote for it unless you 
      increase some more taxes or unless you do some more 
      spending cuts. The last few votes are bought with spending 
      increases and tax cuts. And so the core provision of the 
      bill will make it less likely that we can achieve the goals 
---------------------------------------------------------------------------
      that my colleagues from Virginia have spoken of.

Unofficial Tr. of Markup of H.J. Res. 1, Proposing a Balanced Budget 
Amendment to the Constitution of the United States, Before the H. Comm. 
on the Judiciary, 112th Cong. at 53 (June 2, 2011) (statement of Rep. 
Robert C. ``Bobby'' Scott (D-VA)).
    The need to obtain supermajorities--especially in times of 
economic distress when revenues decline, demands for government 
services increase, and deficits grow--would likely increase the 
power of individual holdouts, resulting in increased, rather 
than decreased spending. Thus, the multiple supermajority 
requirements in the Amendment would have the tendency to 
increase, rather than decrease the deficit.
B. Tax Limitation Amendment Would Promote Deficits
    Section 5 of the BBA provides that a ``bill to increase 
revenue shall not become law unless three-fifths of the whole 
number of each House shall provide by law for such an increase 
by a roll-call vote.'' An amendment offered by Rep. Jim Jordan 
(R-OH) and passed by the Committee further exacerbated this 
requirement by raising the threshold to two-thirds.\26\ It 
should be noted, however that during past Republican-controlled 
Congresses, beginning with the Republican ``Contract with 
America,'' a separate tax limitation constitutional amendment 
was routinely considered, and just as routinely rejected.\27\
---------------------------------------------------------------------------
    \26\Unofficial Tr. of Markup of H.J. Res. 1, Proposing a Balanced 
Budget Amendment to the Constitution of the United States, Before the 
H. Comm. on the Judiciary, 112th Cong. at 157-67 (June 3, 2011).
    \27\In 2001, a similar measure, H.J.Res. 41, failed by a vote of 
232-189. 147 Cong. Rec. H1582 (daily ed. Apr. 25, 2001) (Roll no. 87). 
Its predecessor, H.J. Res. 94, was taken straight to the floor and 
failed by a vote of 234-192 in 2000. 146 Cong. Rec. H2146 (daily ed. 
Apr. 12, 2000) (Roll no. 119). In 1999, H.J. Res. 37 was taken straight 
to the floor and failed by a vote of 229-199. 145 Cong. Rec. H2097 
(daily ed. Apr. 15, 1999) (Roll no. 90). In 1998, H.J. Res. 111 was 
taken straight to the floor and failed by a vote of 238-186. 144 Cong. 
Rec. H2170 (daily ed. Apr. 22, 1998) (Roll no. 102). In 1997, H.J. Res. 
62 passed the Committee by a vote of 18-10, but failed in the full 
House by a vote of 233-190. 143 Cong. Rec. H1506 (daily ed. Apr. 15, 
1997) (Roll no. 78). In 1996, H.J. Res. 159 was taken straight to the 
floor and failed by a vote of 243-177. 142 Cong. Rec. H3304 (daily ed. 
Apr. 15, 1996) (Roll no. 117).
---------------------------------------------------------------------------
    Adopting a supermajority tax requirement would repeat the 
very mistakes made in the 1780's under the Articles of 
Confederation, which required a vote of nine of the 13 States 
to raise revenue. It is because this system worked so poorly 
that the founding fathers sought to fashion a national 
government that could operate through majority rule.\28\
---------------------------------------------------------------------------
    \28\Proposing An Amendment to the Constitution with Respect to Tax 
Limitations on H. J. Res. 62, Before the Subcomm. on the Constitution 
of the H. Comm. on the Judiciary, 105th Cong. 1st Sess. (1997) 
[hereinafter 1997 Judiciary Committee Hearing] (statement of Robert 
Greenstein, Executive Director, Center on Budget and Policy 
Priorities).
---------------------------------------------------------------------------
    While some may believe that a tax limitation is a desirable 
policy, this requirement will make it more difficult to balance 
the budget by making increased revenues difficult, if not 
impossible, to obtain. Although the imposition of new taxes or 
increased taxes may be a policy some would prefer to reject, it 
is by no means the case that the Constitution should place the 
option beyond reach for all time.
    In addition, the language of the BBA is not clear and could 
present difficult implementation problems, possibly placing tax 
policy, in the final analysis, in the hands of Federal judges. 
For example, it is unclear from the text what a ``bill to 
increase revenue'' would include. While it would likely apply 
to a new tax or an increase in a tax rate, it could also 
include a repeal of a special interest tax loophole. As a 
result, the BBA could allow a special interest tax loophole, 
even one that was the result of clear corruption, to pass by a 
simple majority, or even a voice vote, but would impose a 
constitutional requirement of a two-thirds roll call vote of 
each house to repeal it. The BBA would essentially enshrine in 
the Constitution some of the most unfair and--in some 
circumstances--corrupt features of our tax code and thereby 
undermine the widely accepted goal of removing such special 
interest provisions from law and simplifying compliance.
    As the National Commission on Fiscal Responsibility and 
Reform recently observed:

        In the quarter century since the last comprehensive tax 
        reform, Washington has riddled the system with 
        countless tax expenditures, which are simply sending by 
        another name. These tax earmarks--amounting to $1.1 
        trillion a year of spending in the tax code--not only 
        increase the deficit, but cause tax rates to be too 
        high. Instead of promoting economic growth and 
        competitiveness, our current code drives up health care 
        costs and provided special treatment to special 
        interests. The code presents individuals and businesses 
        with perverse economic incentives instead of a level 
        playing field.\29\
---------------------------------------------------------------------------
    \29\National Commission on Fiscal Responsibility and Reform, The 
Moment of Truth, at 28 (Dec. 2010) (emphasis in original).

    Rep. Scott offered an amendment to strike this section.\30\ 
Rep. Jerrold Nadler (D-NY) offered an amendment that would 
allow special interest tax breaks for large producers of oil or 
natural gas to be repealed by a simple majority vote.\31\ Both 
amendments were rejected on a party line vote.
---------------------------------------------------------------------------
    \30\Unofficial Tr. of Markup of H.J. Res. 1, Proposing a Balanced 
Budget Amendment to the Constitution of the United States, Before the 
H. Comm. on the Judiciary, 112th Cong. at 77-109; 39-49 (June 3, 2011).
    \31\Id. at 39-49.
---------------------------------------------------------------------------
    The BBA presents various questions of interpretation. Would 
the Amendment's restriction apply to a 1, 5, or 10-year budget 
window? Would a bill resulting in increased revenues in years 1 
and 2, but lower revenues thereafter require a two-thirds vote? 
The Amendment is also silent on when the revenue impact would 
be assessed. Would it, as provided in section 7, rely solely on 
estimates of outlays and receipts, or would an error in an 
estimate of the impact of the tax measure that in fact resulted 
in an increase in revenues require a retroactive change--and 
court ordered refunds--based on actual receipts? If this is not 
the case, could estimates be used to circumvent the two-thirds 
requirement? If an adjustment and tax refund were necessary, 
would the loss in revenues and existing assets trigger the 
other requirements of the Amendment, necessitating either 
offsetting budget cuts or a three-fifths vote to permit the 
resulting imbalance?
C. A Cap on Outlays Is a New and Dangerous Innovation
    The BBA includes a provision that would cap total Federal 
outlays at 18 percent of ``economic output of the United 
States, unless two-thirds of each House of Congress shall 
provide for a specific increase of outlays above this 
amount.''\32\ We assume that by ``economic output of the United 
States'' the resolution's authors mean ``gross domestic 
product,'' which is defined as the ``market value of goods and 
services produced by labor and property in the United States, 
regardless of nationality.''\33\
---------------------------------------------------------------------------
    \32\H.J.Res 1, 112th Cong. Sec. 2 (2011). The bill, as introduced 
capped outlays at ``one-fifth.'' An amendment offered by Rep. Louie 
Gohmert (R-TX) changed this to 18 percent.
    \33\Bureau of Economic Analysis, U.S. Department of Commerce, 
Glossary, available at http://www.bea.gov/glossary/glossary_g.htm (Last 
visited: June 20, 2011).
---------------------------------------------------------------------------
    This cap, however, appears to be arbitrary. No arguments 
supporting the idea that 18 percent is an economically ideal 
rate have been put forward any more than for the 20 percent cap 
in the bill as introduced, or the 19 percent cap in an 
amendment filed by Rep. Louie Gohmert (R-TX), but not 
considered by the Committee. The sole argument was to appeal to 
historical experience which by no means supports the 18 percent 
figure. It is, as with other parts of the BBA, merely a policy 
preference posing as a constitutional principle. In reality, 
the historical record indicates that outlays, as a percentage 
of GDP, have varied significantly.
    Federal outlays have not dropped below 18 percent since FY 
1967, and have not dropped below 17 percent since FY 1957.\34\ 
According to the Congressional Budget Office:
---------------------------------------------------------------------------
    \34\Office of Management and Budget, Table 15.3 Total Government 
Expenditures as Percentages of GDP: 1948-2010, at 344-5, Fiscal Year 
2012 Historical Tables Budget of the United States (2010).

        Spending by the Federal Government grew from 
        approximately 3 percent of GDP in 1925 to 15.6 percent 
        in 1950. Following the Depression, World War II 
        abruptly boosted Federal spending to approximately 42 
        percent of GDP, but afterward it dropped and resumed a 
        less volatile trend.''\35\
---------------------------------------------------------------------------
    \35\Congressional Budget Office, A 125-Year Picture of the Federal 
Government's Share of the Economy, 1950-2075, at 2 (July 3, 2002).
---------------------------------------------------------------------------
D. BBA's Debt Ceiling Is Arbitrary
    The Amendment would impose a three-fifths vote requirement 
in order to increase the debt ceiling.\36\ Recent experience 
demonstrates, however, that even obtaining a simple majority 
vote can be elusive.\37\ The current budgetary deadlock has 
placed the creditworthiness of the United States in question 
for the first time since the adoption of the 14th Amendment to 
the Constitution.\38\
---------------------------------------------------------------------------
    \36\H.J. Res. 1, 112th Cong. Sec. 3 (2011).
    \37\See, e.g., 157 Cong. Rec. H 3783 (daily ed. May 31, 2011) (vote 
on A Bill to Implement the President's Request to Increase the 
Statutory Limit on the Public Debt, H.R. 1954, 112th Cong. (2011)).
    \38\Section 4 of the 14th Amendment states, ``The validity of the 
public debt of the United States, authorized by law, including debts 
incurred for payment of pensions and bounties for services in 
suppressing insurrection or rebellion, shall not be questioned. But 
neither the United States nor any State shall assume or pay any debt or 
obligation incurred in aid of insurrection or rebellion against the 
United States, or any claim for the loss or emancipation of any slave; 
but all such debts, obligations and claims shall be held illegal and 
void.'' Although section 4 ``was undoubtedly inspired by the desire to 
put beyond question the obligations of the Government issued during the 
Civil War, its language indicates a broader connotation. . . . `[T]he 
validity of the public debt'. . . [embraces] whatever concerns the 
integrity of the public obligations,'' and applies to government bonds 
issued after as well as before adoption of the Amendment. Perry v. 
United States, 294 U.S. 330, 354 (1935). In Perry, the Court concluded 
that the Joint Resolution of June 5, 1933, insofar as it attempted to 
override the gold-clause obligation in a Fourth Liberty Loan Gold Bond 
``went beyond the congressional power.'' Id. On a Confederate bond 
problem, see Branch v. Haas, 16 F. 53 (C.C.M.D. Ala. 1883) (citing 
Hanauer v. Woodruff, 82 U.S. (15 Wall.) 439 (1873), and Thorington v. 
Smith, 75 U.S. (8 Wall.) 1 (1869)); see also The Pietro Campanella, 73 
F. Supp. 18 (D. Md. 1947).
---------------------------------------------------------------------------
    The consequences of a default by the United States on its 
obligations, or even the growing concern in the world markets 
about the risk of such a default, could be catastrophic. 
Recently, Moody's Investors Service warned that it might soon 
downgrade the credit rating of the United States because of 
mounting concerns that the government will default on its 
obligations.\39\ Moody's stated, ``The heightened polarization 
over the debt limit has increased the odds of a short-lived 
default.''\40\ In April, Standard & Poor's, citing continued 
gridlock in budget negotiations, lowered its outlook on the 
Federal debt position from ``stable'' to ``negative.''\41\ 
Similarly, Fitch Ratings warned of a downgrading of our 
national debt obligations in the event of a technical 
default.\42\
---------------------------------------------------------------------------
    \39\Zachary A. Goldfarb & Felicia Sonmez, Moody's Warns of 
Downgrade, Wall St. J. (June 3, 2011), at A11.
    \40\Id.
    \41\Clifford Marks & Humberto Sanchez, S&P Lowers U.S. Debt Outlook 
from `Stable' to `Negative'--Ratings Agency Reaffirms `AAA' Rating, but 
Worries Policymakers Will Fail to Agree on Deficit Reduction, National 
Journal.com (Apr. 19, 2011), available at http://nationaljournal.com/
economy/s-amp-p-lowers-u-s-debt-outlook-from-stable-to-negative-
20110418.
    \42\Peter Schroeder, Fitch Warns US Would eEdanger AAA Rating With 
Even `Technical' Default, The Hill (June 8, 2011), available at http://
thehill.com/blogs/on-the-money/budget/165365-fitch-warns-against-
default-of-any-length.
---------------------------------------------------------------------------
    Regrettably, Republican leaders seem to be unaware of, or 
indifferent to, the dangers of this brinkmanship over the debt 
ceiling. Republican Budget Committee Chairman Paul Ryan appears 
not to grasp the gravity of the situation. For example, he 
recently opined, ``If a bondholder misses a payment for a day 
or two or three or four--what is more important is you are 
putting the government in a materially better position to 
better pay its bills going forward.''\43\ This is precisely the 
``technical default'' about which Fitch has recently warned. 
When an individual goes into technical default, as described by 
Rep. Ryan, he or she pays substantial penalties in the form of 
penalties and in ballooning interest rates. The same fate does 
befall nations, and the consequences are uniformly 
catastrophic.
---------------------------------------------------------------------------
    \43\Amy Scott, Some Republicans OK with short-lived debt default, 
Marketplace Morning Report (June 8, 2011), available at http://
marketplace.publicradio.org/display/web/2011/06/08/am-some-republicans-
ok-with-shortlived-debt-default/?refid=0.
---------------------------------------------------------------------------
    The debt, while a substantial problem, is not the cause of 
our current precarious position in the eyes of the bond market. 
As Bloomberg News reports, ``For all the debate about the 
deficit in Washington, bond market yields in the U.S. are lower 
now than when the government was running a budget surplus a 
decade ago, even though Treasury Department data show that the 
amount of marketable debt outstanding has risen to $9.13 
trillion from $4.34 trillion in mid-2007.''\44\
---------------------------------------------------------------------------
    \44\David Lerman, Ryan, Geithner Offer Different Views on Agreement 
to increase Debt Ceiling, Bloomberg News (Apr. 18,2011). http://
www.bloomberg.com/news/2011-04-17/ryan-geithner-offer-different-views-
of-agreement-to-increase-debt-ceiling.html.
---------------------------------------------------------------------------
E. The Amendment recognizes only military emergencies
    Although there are many reasons why a nation might need to 
run a deficit, section 6 of the BBA permits such to occur only 
during ``any fiscal year in which the United States is engaged 
in a military conflict which causes an imminent and serious 
military threat to national security and is so declared by a 
joint resolution, adopted by a majority of the whole number of 
each House, which becomes law.''
    Interestingly, while the BBA's waiver only applies if the 
United States is at war, any military necessity that might 
require a buildup in preparation for hostilities is not 
recognized. It is also not clear whether the Global War on 
Terror would be covered by the waiver. If the waiver does 
apply, then--at least for the foreseeable future--it could be 
argued that the United States will always be in a conflict 
``which causes an imminent and serious military threat to the 
national security,'' and therefore render this proposed 
constitutional amendment a nullity. Rep. Sheila Jackson Lee (D-
TX) offered an amendment that would have clarified that the 
exception applied to all military conflicts. The amendment was 
rejected.\45\
---------------------------------------------------------------------------
    \45\Unofficial Tr. of Markup of H.J. Res. 1, Proposing a Balanced 
Budget Amendment to the Constitution of the United States, Before the 
H. Comm. on the Judiciary, 112th Cong. at 125-138 (June 3, 2011).
---------------------------------------------------------------------------
    There are, however, other types of emergencies in which 
deficit spending may be needed. Periods of depression or 
serious recession sometimes call for deficit spending. It would 
be a mistake for the Constitution--as proposed to be amended by 
the BBA--to prohibit, categorically, this type of stimulus 
spending absent the concurrence of a supermajority.
    For example, the CBO, in its most recent periodic report, 
estimates that in the first quarter of calendar year 2011, the 
American Recovery and Reinvestment Act of 2009 raised real GDP 
by between 1.1 and 3.1 percent, lowered the unemployment rate 
by between .06 and 1.8 percent, increased the number of people 
employed by between 1.2 million and 3.3 million, and increased 
the number of full time equivalent jobs by 1.6 million to 4.6 
million compared with what would have occurred otherwise. CBO 
estimates that the effects of ARRA on output peaked in the 
first half of 2010 and have since diminished.\46\ Rep. Nadler 
offered an amendment that would have allowed Congress, by a 
majority vote of both Houses, to suspend the application of the 
BBA if economic growth has been, or will be, negative for 2 
consecutive quarters. While there is disagreement among members 
of the Committee on the utility of deficit spending during a 
recession or a depression, it is a matter of economic policy, 
and the people's elected representatives, not the Constitution, 
should make that judgment. The Nadler amendment was rejected on 
a party line vote.\47\
---------------------------------------------------------------------------
    \46\Congressional Budget Office, Estimated Impact of ARRA on 
Employment and Economic Output from January 2011 through March 2011 at 
3 (May 2011).
    \47\Unofficial Tr. of Markup of H.J. Res. 1, Proposing a Balanced 
Budget Amendment to the Constitution of the United States, Before the 
H. Comm. on the Judiciary, 112th Cong. at 49-75 (June 3, 2011).
---------------------------------------------------------------------------

              V. THE AMENDMENT WOULD DESTROY MEDICARE AND 
                            SOCIAL SECURITY

    The BBA requires a balanced budget by as soon as fiscal 
year 2018. Given the current deficit, it is fair to ask how the 
proponents foresee this objective being attained. Rep. Nadler 
asked the sponsor, Rep. Bob Goodlatte (R-VA) that precise 
question. And, Rep. Nadler pointed out that the recently passed 
Republican Budget projected balance only by fiscal year 2040. 
Rep. Goodlatte responded, ``I would direct to you the House 
Republican Study Committee Budget which balances it in 9 
years.''\48\
---------------------------------------------------------------------------
    \48\Whether the Constitution Should be Amended to Address the 
Federal Deficit?: Hearing Before the Subcomm. on the Constitution of 
the H. Comm. on the Judiciary, 112th Cong. (2011) (statement of Rep. 
Bob Goodlatte (R-VA)).
---------------------------------------------------------------------------
    It should be noted that what the Republican Study Committee 
(RSC) proposed in its budget was rejected by House. It is also 
important to understand what the consequences of meeting this 
deadline would be. Under the RSC plan, which would require the 
Nation's budget to achieve balance in 2020, Federal 
expenditures would be cut by more than $9 trillion over the 
coming decade, compared with current amounts. And, it would cut 
total non-defense discretionary programs by approximately 70 
percent by 2021, and by more than $3 trillion over the next 10 
years. It contains deeper Medicare cuts than the Ryan budget, 
which recently passed the House. The RSC budget includes the 
Ryan budget proposal to convert Medicare to vouchers and raise 
its eligibility age from 65 to 67, but it raises the 
eligibility age sooner than the Ryan budget would. It would 
raise the Social Security retirement age to 70. In 2021, 
Medicaid, the Supplemental Nutrition Assistance Program (SNAP, 
formerly known as food stamps), and Supplemental Security 
Income would be cut in half.\49\ Given the size of projected 
shortfalls, and the proposed constitutional impediment to 
increasing revenues, these cuts, or ones very much like them, 
would be necessitated by the BBA.
---------------------------------------------------------------------------
    \49\Robert Greenstein, James R. Horney & Kelsey Merrick, Balanced 
Budget Amendment Would Require More Extreme Cuts than Ryan Plan: Chief 
Sponsor Cites Republican Study Committee Budget, Which Would Cut $9 
Trillion Over Next Decade, as Model, Center for Budget and Policy 
Priorities (June 6, 2011), available at http://www.cbpp.org/files/6-6-
11bud.pdf (Last visited: June 21, 2011).
---------------------------------------------------------------------------
    Ranking Member John Conyers, Jr. (D-MI), Rep. Ted Deutch 
(D-FL), and Rep. Jackson Lee offered amendments that would have 
protected Medicare and Social Security, by removing them from 
the budget calculations. The amendments were rejected on party 
line votes.\50\
---------------------------------------------------------------------------
    \50\Unofficial Tr. of Markup of H.J. Res. 1, Proposing a Balanced 
Budget Amendment to the Constitution of the United States, Before the 
H. Comm. on the Judiciary, 112th Cong. at 36-79 (June 2, 2011); 138-157 
(June 3, 2011); 41-51 (June 15, 2011).
---------------------------------------------------------------------------

                             VI. CONCLUSION

    Never before, with the exception of the disastrous 
experiment of Prohibition, has this Nation written specific 
policy preferences into the Constitution.\51\ The Constitution 
is a document intended to lay out policies to allow Americans 
to express their preferences in a political system that 
safeguards the rights of all, and to permit the popular will to 
find expression in law. Amending the Constitution to settle 
certain economic and policy questions for all time not only 
violates the underlying purpose of that document, but risks 
economic catastrophe and hardship for the middle class, the 
poor, the very young, and the elderly. It would forever consign 
the concept of one person one vote to the dustbin of history. 
It would represent a catastrophic historic turning point for 
this country, and we urge our colleagues to reject it.
---------------------------------------------------------------------------
    \51\Justice Holmes, in his famous dissent, warned against using the 
Constitution as a tool of economic policy. He wrote, ``The 14th 
Amendment does not enact Mr. Herbert Spencer's Social Statistics.'' 
Lochner v. People of the State of New York, 198 U.S. 45, 75 (1905).

                                   John Conyers, Jr.
                                   Howard L. Berman.
                                   Jerrold Nadler.
                                   Robert C. ``Bobby'' Scott.
                                   Sheila Jackson Lee.
                                   Maxine Waters.
                                   Steve Cohen.
                                   Henry C. ``Hank'' Johnson, Jr.
                                   Pedro R. Pierluisi.
                                   Mike Quigley.
                                   Judy Chu.
                                   Ted Deutch.
                                   Linda T. Sanchez.

                      Additional Dissenting Views

    The discussion about this proposed amendment to the 
Constitution has totally been about the title of the amendment 
and not about its provisions. Incredibly, the provisions of 
this amendment do not require a balanced budget and actually 
will make it more difficult for future Congresses to balance 
the budget.
    Every budget considered by the House earlier this year, and 
in fact nearly every budget over the last decade, was not 
balanced in the first fiscal year. Each of these budgets would 
have required a three-fifths majority to pass the House and the 
Senate under the provisions of this amendment. Commonsense 
would suggest that a meaningful deficit reduction plan would be 
more difficult to pass with a supermajority rather than a 
simple majority, and therefore the enactment of the Balanced 
Budget Amendment would make it more difficult to the balance 
budget. Other than the title, there is nothing in this 
amendment which makes it more likely that Congress will pass a 
fiscally responsible budget instead of a fiscally irresponsible 
budget. In fact the supermajority requirement to raise revenues 
will obviously make it more difficult to balance the budget. 
The December 2010 extension of the Bush-era tax cuts added $800 
billion to the deficit and easily passed both houses of 
Congress. If this amendment had been in effect, its provisions 
would not have prevented Congress from adding $800 billion to 
our deficit, because tax cuts could be passed with a simple 
majority.
    Furthermore, a two-thirds requirement to pass a spending 
plan over 18% of our nation's Gross Domestic Product (GDP) 
would jeopardize Social Security and Medicare. Total outlays of 
the federal government have not been below 18% of GDP since the 
passage of Medicare. An 18% spending cap would put immediate 
pressure on Congress to make significant cuts to Medicare and 
Social Security. Under the provisions of the amendment, 
Congress could drastically cut Medicare and Social Security by 
a simple majority to meet the 18% of GDP threshold but in order 
to save these important programs with either new taxes or 
spending above 18% of GDP would require a two-thirds majority 
in the House and the Senate.
    In conclusion, we should be debating the provisions of the 
amendment, not just the title. The amendment does not require a 
balanced budget, and in fact will make it more difficult to 
balance the budget. Furthermore, the amendment jeopardizes 
Medicare and Social Security by allowing cuts in these programs 
with a simple majority while requiring a supermajority to save 
these programs with new taxes. Balancing the budget requires 
tough choices; the Balanced Budget Amendment will make it less 
likely that those tough choices will be made.

                                   Robert C. ``Bobby'' Scott.

                                  
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