Balanced Budget Amendment

Floor Speech

Mr. President, a previous President of the United States once wrote that if he could add one amendment to the Constitution, it would prohibit the Federal Government from incurring more debt. That President's name was neither Bush nor Reagan but Jefferson. The 217 years since then have proven three things: The national debt crisis is growing, it is dangerous, and only the Constitution can compel Congress to act. We must act before it is too late.

The national debt was 19 percent of gross domestic product when Thomas Jefferson called for a balanced budget amendment. President George Washington told the House of Representatives that the regular redemption of the public debt was the most urgent fiscal priority. In his first report on the public credit in 1790, Treasury Secretary Alexander Hamilton warned that continuously accruing national debt interest would be a signal ``either of inability, or of ill faith, and will not cease to have an evil influence on public credit.''

The commitment to fiscal balance over the next 150 years was so strong that many referred to it as our unwritten fiscal constitution. Unfortunately, that commitment did not last. The national debt topped 40 percent of GDP for the first time in 1934, and 2 years later the first balanced budget amendment was introduced in Congress. Eighty years ago, Members of Congress began to realize that an unwritten constitution was no longer strong enough to limit the national debt. Good intentions are not enough to balance the Nation's checkbook.

Senator Millard Tydings, a Maryland Democrat, introduced the first balanced budget amendment to reach the Senate or House floor. The 1947 Appropriations Committee report on his proposal, S.J. Res. 61, opened with these words: ``In no other way except by an amendment to the Constitution can Congress be compelled to balance its budget in peacetime.'' The Judiciary Committee held its first balanced budget amendment hearing in 1956 on amendments introduced by Senator Harry Byrd, a Virginia Democrat, and Senator Carl Curtis, a Nebraska Republican. In current dollars, the national debt today is nearly five times what those distinguished Senators denounced as astronomical and staggering.

Here is where the national debt has gone as Congress has failed to propose a balanced budget amendment. Let me refer to this chart. As we can see, the national debt as a percentage of GDP is going up the charts today to the highest ever. The national debt was 32 percent of GDP when I first introduced a balanced budget amendment in 1979. It climbed to 34 percent of GDP in 1982 when the Senate--but not the House--passed a BBA; more than 62 percent of GDP in 1997 when we came within one vote of approving a BBA that I introduced; and 95 percent of GDP when the Senate voted on a BBA that I introduced in 2011. Today the national debt stands at 103 percent of GDP, literally swallowing the economy.

They say that the more things change, the more they stay the same. As the national debt continues to change in the wrong direction, BBA opponents make the same arguments they always have. First, they say the national debt is simply not a problem that needs a solution. The evidence, however, is all around us.

In a July 2010 policy paper, for example, the Congressional Budget Office outlined what it called the significantly negative consequences of our rising national debt and repeated those warnings in its latest budget outlook. Here are the consequences of a rising national debt--this is the Congressional Budget Office in 2015--reduced investment, resulting in lower national income and higher interest rates; Federal spending on interest payments would rise; less flexibility to address financial and economic crises; and increased likelihood of a fiscal crisis in the United States.

ADM Michael Mullen, former Chairman of the Joint Chiefs of Staff, says this national debt crisis is a serious threat to national security--a conclusion echoed by experts from the Brookings Institution to the Heritage Foundation--or we can listen to the Government Accountability Office, which warned in 2009 that every year since that ``the long-term fiscal outlook is unsustainable.''
A recent study published in the Journal of Economic Perspectives looked at periods in different countries over the last two centuries when national debt exceeded 90 percent of GDP for more than 5 years. The authors found that these periods not only lead to ``substantially slower'' economic growth but that ``even if such episodes are originally caused by a traumatic event such as a war or financial crisis, they can take on a self-propelling character.''

These findings are very important for us today because the national debt has been more than 90 percent of GDP since the recession ended in 2009. In fact, we are entering the longest period in American history with the national debt above this toxic level. CBO projects exactly what this study predicts--that the national debt will remain above 100 percent of GDP and that GDP will grow at a rate ``notably less'' than in the past. Our own actual experience already proves the same thing. In the 6 years since the recession ended, debt has been twice as high and GDP has grown at half the rate as during the same period after previous recessions. This really does look like a self-propelling crisis.

The second argument by BBA opponents is that even if the national debt is a problem, Congress can solve it by willpower. That willpower once existed, but it is long gone. The Federal budget has been balanced in only 7 of the 80 years since a balanced budget amendment was first introduced in Congress and total deficits over those years dwarf total surpluses by 23 to 1.

The third argument by balanced budget amendment opponents is that even if Congress won't solve the national debt by willpower, it can do so by legislation. In 1985 we enacted the Balanced Budget and Emergency Deficit Control Act of 1985 when the national debt was 42 percent of GDP. We have enacted one law after another as the national debt has continued to climb. Most recently, we enacted the Budget Control Act of 2011 when the national debt had swelled to 95 percent of GDP, but it failed, as did all the others. Willpower and legislation have both failed to tackle this crisis.

The national debt today stands at nearly $18.2 trillion. In its most recent budget outlook, CBO projects that under current law the national debt will swell to more than $25 trillion in the next decade. GAO issued its latest ``Federal Fiscal Outlook'' report in August. Without significant action by Congress, GAO says, Federal debt as a percentage of GDP could in the next 25 years climb to four times its historical average.

New data show that the deficit for fiscal year 2015 will likely be lower than expected. If the best thing to say about our current fiscal condition is that it could be worse, we are really in trouble. In its June long-term budget outlook, CBO says that after a few years at a more modest level, deficits will once again increase, especially when interest rates start to rise.

Since President Obama took office, we have seen both the greatest buildup of debt and the lowest interest rates in history. This is the perfect fiscal storm. Even a small rise in interest rates will explode the cost of servicing this massive debt and contribute to higher deficits and greater debt. CBO projects that interest rates will indeed rise, and, as a result, ``the government's net interest costs are projected to more than double relative to the size of the economy over the next decade.'' Both CBO and the Concord Coalition anticipate that over the next decade, interest costs alone will approach $1 trillion a year--that is with a ``t''--$1 trillion a year.

The fourth argument by BBA opponents really amounts to plain old scare tactics. They figure that Americans may want a balanced budget but only if their own favorite spending continues. So BBA opponents claim that a BBA will automatically cut this or that program. Not only is this a cynical approach to a very serious problem, but it is not true. A balanced budget amendment will require that Congress finally get serious about priorities and decide which spending is the most important and the most cost-effective. Long-term fiscal responsibility is more important than any one spending item in the budget.

I introduced my first balanced budget constitutional amendment in June 1979. I said then and I repeat today that a balanced budget amendment ``requires that Congress think in order of budget priorities.'' Nothing short of the Constitution will make that happen.

One definition of insanity is doing the same thing over and over and expecting different results. Neither willpower nor legislation can tackle the growing national debt crisis. It has been nearly 70 years and more than $15 trillion of debt since the Appropriations Committee declared in 1947 that only a constitutional amendment can compel Congress to balance its budget. That is the only option left.

The last gasp of BBA opponents isn't really an argument at all. They say that adopting a balanced budget amendment will not by itself solve the debt crisis. I have introduced 7 and cosponsored 20 balanced budget amendments since I was first elected. In all this time, during all the hearings and floor debates, I have never once heard anyone claim that adopting a balanced budget amendment will, by itself, magically make the debt disappear. Of course it won't. Neither did enacting all of those so called budget control acts. Congress will still have to make the decisions to determine whether we continue drowning in debt or chart a different course.

Congress cannot amend the Constitution by itself. Article V of the Constitution provides that constitutional amendments may be proposed by either two-thirds of Congress or by a convention called at the request of two-thirds of the States. In either case, a proposed amendment does not become part of the Constitution until at least three-fourths or three-quarters of the States ratify it. Congress can do nothing more than propose a balanced budget amendment so that the American people may decide whether they want to add it to their Constitution.

Government does not get to set its own rules. The Constitution is the law that governs government, and it belongs to the American people. It is the primary way the American people set rules for how their government must operate.

Mr. HATCH. Mr. President, Congress has proven, over decades of failure resulting in trillions of dollars of debt, that it will not exercise its fiscal authority properly. The American people must be given a chance to decide whether to make fiscal responsibility mandatory. It is the American people who ought to decide this. The only way they can is to propose a balanced budget amendment and send it to the States for consideration.

I have looked at dozens of national polls since I was first elected to the Senate conducted by major polling firms or national news organizations. Three-quarters of Americans supported a balanced budget amendment in 1976 and three-quarters supported it last year. Is it possible, however, that all of those polls over all those years are actually wrong?

The American people might be content with the national debt swallowing the economy. They may not be bothered by being on an unsustainable fiscal path. Who knows, they might welcome soaring national debt interest payments crowding out other budget priorities. They might be OK with slower economic growth and a greater threat to national security. The American people might believe, with balanced budget amendment opponents here in Washington, that the national debt is no big deal or that Congress can solve it on its own. If so, then the American people will decline to ratify a balanced budget amendment, but the choice has to be theirs, not ours.

The Peter G. Peterson Foundation also does polling, each month compiling the Fiscal Confidence Index of Americans' opinions about the national debt. The results are both clear and consistent: 71 percent of Americans are concerned about national debt, as seen here--let me just define it a little bit--71 percent say their concerns about the national debt have increased; 63 percent say addressing the national debt is on the wrong track; 81 percent say addressing the national debt should be among Congress's top three priorities; 83 percent say Congress should spend more time addressing the national debt; 62 percent expect the national debt crisis to get worse in the next few years.

Some of my colleagues may believe we have no obligation to handle the American people's money responsibly. They might still claim that Congress can get its fiscal act together on its own or they may deny that the American people should be able to set the fiscal rules for the government they elect, using the Constitution that belongs to them.

Those colleagues should remember what the American people think about Congress. Disapproval of this institution is 83 percent today, higher than 98 percent of the time since the early 1970s. The percentage of Americans with very little or no confidence at all in Congress is the highest since Gallup started asking in May of 1973.

I am continually amazed at the wisdom and foresight of America's Founders. Thomas Jefferson was right in 1798 that one of the most effective ways of keeping the Federal Government within constitutional principles is to require a balanced budget. The Appropriations Committee was right in 1947 that Congress will not balance its budget unless the Constitution requires it. After seven more decades of attempting to tackle the debt by willpower or legislation, the crisis is worse than ever.

Continued failure is not an option, and there is only one solution. We must act before it is too late.

Mr. President, I yield the floor.

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