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Progressive Caucus Hour: The Balanced Budget Amendment

Floor Speech

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Location: Washington, DC

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Mr. JACKSON of Illinois. I wanted to ask the gentlelady a question because I think she touched upon a thoughtful comment in her remarks.

I can imagine since every Member of Congress and every candidate for Congress is running for office and they run to uphold the Constitution of the United States, they swear to uphold the Constitution and its various provisions within the context of the debate that we have here on the floor of the Congress. In my district, I run on a campaign to try and provide better housing for my constituents. I run a campaign trying to provide health care for the health care-less, those who don't have health care. I run trying to say that the Federal Government has an obligation to address issues of unemployment and provide jobs. And when the private sector won't invest its money in and on the south side of Chicago, that it should do more. I run my campaigns arguing that people should get involved in the political process because if they vote for me, I can provide them some hope. I will come to the floor of the Congress and have their grievances redressed by the Government of the United States.

Under the balanced budget amendment as proposed by the gentleman from Virginia, it seems to me that anyone running for Congress in the future isn't going to be running making promises or commitments to do anything about the social ills or the gaps that exist within our society. They will be running for office saying, What I guarantee is you cannot have better housing, that you cannot concern yourself about the Federal Government's role in health care, or that the Federal Government should have no role in addressing issues of unemployment. Let the private sector work its way to the south side of Chicago or to Houston, Texas.

The gentlelady's argument seems to suggest that the balanced budget amendment itself changes the framework and the structure of America; and instead of candidates running for office making the case for hope and making the case for change and encouraging the promise of America, it's just the opposite.

Would the gentlelady comment on that, please.

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Mr. JACKSON of Illinois. I thank the gentlelady for yielding, and I'm not so sure that many of the distinguished colleagues appreciate that the distinguished gentlelady from Texas was a jurist before she came to the Congress of the United States. And so we heard from the author of the amendment, the distinguished gentleman from Virginia, that a three-fifths requirement would be required by this House, I believe, to raise taxes.

Now, unlike the Senate, which has a staggered election process, every 6 years is usually the tenure of a Senator, here in the House, Members of Congress run every 2 years. Essentially they're elected a year, then they run a year, then they are elected a year, then they run a year. And I'm finding it nearly impossible to imagine that in the event that revenues are at a shortfall in the Congress of the United States that there will ever be a Congress under the three-fifths requirement as spoken of in this amendment that would ever be willing to raise taxes on wealthy Americans in order to help balance the Nation's budget or to pay for programs. The politics of the way in which Congress is elected, that we serve 2 years, that we essentially serve a year, run a year, serve a year, do politics a year, which is a fundamental tenet of our system and a Constitutional requirement for the House, it just seems to me that inherent in the idea that somehow this Congress is going to have enough political courage in an election year, which, by the way, is every year for Members of Congress, that they're going to be willing to raise taxes in order to help provide for necessary needs of the American people.

As a jurist, would the gentlelady please comment on this idea of a three-fifths requirement in order to move revenue through this building.

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Mr. JACKSON of Illinois. Thank you, Mr. Speaker.

Over the course of this session of Congress, I have given a number of Special Order speeches in order to get across to this body the basic needs of the American people and how the Constitution is the best means of meeting those needs.

In April, I came to the floor and denounced a balanced budget amendment as the end of progress in our society. It would appear that my colleagues on the other side of the aisle didn't pay close attention. Perhaps, as they often do, they blatantly ignored what I believe was the logic and the reason behind my arguments.

Either way, Mr. Speaker, here we are just a few months from my original statement against the BBA and the House leadership has brought a balanced budget amendment to the floor. This week, we will cast our vote on what Ezra Klein referred to in the Washington Post as ``the worst idea in Washington.''

In a New York Times editorial published on July 4, the dangers of the balanced budget amendment are laid out in plain English--no frills, none of the rhetoric that our constituents fall prey to. As simple as the BBA sounds, requiring the Federal Government to balance its books every year would be like ``telling families they cannot take out a mortgage or a car loan or do any other kind of borrowing, no matter how sensible the purchase or how credit worthy they may be.''

Worse than just balancing our budget, the amendments that we will see in the coming weeks will force the supermajority to approve any borrowing to finance spending and cap all spending at under 20 percent of GDP. Additionally, a two-thirds majority would be required to raise taxes, making that process effectively impossible.

Sometimes a meaningful investment leads to greater returns in the long run. The average American can't afford to purchase a car, a house, or an education outright. They need a loan or some arrangement in which they owe money. They might be expected to pay installments at a later date, but the product of that loan could get them to a job interview, in a house, or in a university. A car could get them home after a long night at the office. A car lets them purchase groceries and, in turn, contribute to the success of the car industry. A house provides safety and security for one's family. An education adds to the quality of a person's life and the betterment of society. A loan may not always be the most desirable situation, but no one would deny its necessity.

The chief argument used to sway forlorn Americans to the misguided belief that a BBA would benefit our Nation is this: each and every home has to balance its checkbook every month, so why shouldn't our Federal Government do the same? First of all, let me be clear: you cannot compare the budget of the Government of the United States to the budget of a household. It's simply not realistic.

Aside from that critical flaw, the truth is that while each and every American home must balance its bank account, this doesn't include the mortgage, the car note, or the car loans that haven't been paid back yet. A true balanced budget is unrealistic in almost any scenario.

Lest my words again fall on deaf ears, Mr. Speaker, let's start at the beginning. For my colleagues who did not hear me the first time, this may be a little bit redundant, but I'd like to address the history of the balanced budget amendment. It's been a long road.

In fact, Mr. Speaker, if I weren't so appalled by the nature of this effort, I'd be apt to congratulate my friends across the aisle for never letting go of their dream. I can absolutely relate, as I have a few constitutional amendments myself. I guess the Disney phrase, ``Anything can happen when you believe'' really did stick with them.

They believed since 1936 when, in reaction to FDR's New Deal, Republican Congressman Harold Knutson of Minnesota introduced the first version of the amendment in 1936. Like many constitutional amendments, this resolution did not receive a hearing or a vote.

During President Dwight D. Eisenhower's first term, the Judiciary Committee of a barely Democratic Senate held its first hearing on this amendment. It, again, did not receive a vote.

After these partial defeats, the BBA supporters shifted their focus to the States. From 1975 to 1980, 30 State legislatures passed resolutions calling for a constitutional convention to propose this amendment directly to the States.

The election of President Ronald Reagan and a Republican Senate in 1980 renewed hopes for the balanced budget amendment passed by Congress. While the Senate did adopt the amendment in 1982, it failed to garner the necessary two-thirds majority in the House. This failure energized conservative groups such as the National Taxpayers Union and the National Tax Limitations Committee to refocus on State action.

In 1982 and 1983 the Alaska and Missouri legislatures passed resolutions supporting the BBA, bringing the total of number of these resolutions to 32, two short of the 34 needed for a convention. However, a growing concern about the scope of a constitutional convention led some States to withdraw their resolutions, re-shifting focus to congressional action.

From 1990 to 1994 Congress would make three additional attempts to codify this amendment. All failed to garner the necessary two-thirds majority. However, the BBA made a comeback when it was included in former Speaker Newt Gingrich's Contract with America. Twenty-six days after taking office, the newly empowered Republican majority adopted the BBA, giving conservatives their first congressional win in a decade. Disappointment awaited in the Senate however, when two separate votes fell short of its adoption. This failure, along with the balanced budget and the balanced budget surplus at the decade's end, sapped any remaining congressional support for the BBA.

There was renewed Republican support for the amendment in 2000, as it was included in the party's platform. The Bush tax cuts, wars in Afghanistan and Iraq, the passage of Medicare Part D, all unpaid for, led to massive deficit spending by Republicans that eventually led them to sweep the balanced budget amendment back under the rug. In fact, by 2004 the Republican party had created such debt and was so embarrassed that they left any mention of a balanced budget amendment out of their platform.

Again, in recent years, with the advent of the Tea Party and the return of extreme fiscal conservatism in the Republican party, there are currently 12 balanced budget amendments in the House and three in the Senate.

Mr. Speaker, we have a troubling national debt and deficit, but the balanced budget amendment is not the solution. I've already addressed for you the chief argument that proponents of the BBA use to draw in more misinformed worshipers of flawed austerity, comparisons to everyday families.

In the same vein of bandwagon fallacies, my colleagues across the aisle have consistently pointed to another entity that is required to balance its books, the States.

Mr. Speaker, I, again, can't continue without pointing out a serious dilemma in comparing the governments of individual States to the Federal Government. Perhaps if our Founding Fathers had seen fit to stick with the Articles of Confederation, this argument might be more legitimate. But at the end of the day we, instead, find ourselves under the guidance of the Constitution of the United States, by which I'm able to stand here before you tonight as an elected official conveying the views of my constituents.

The requirements and expectations of our Federal Government, to the great and continuous dismay of some of my colleagues, are now and forever different from those of the States. The Federal Government is bound to protect, via military force, and provide for the collective security of our Nation; maintain the national currency; determine the scope of the Federal courts; promote and encourage our Nation's scientific and technological advancements via patents; and even regulate trade between the States that make up this great Union. At the end of the day, the States rely on the Federal Government, much like the citizens of the United States.

Alas, Mr. Speaker, since this logic doesn't seem to carry with my conservative friends, I would like to point out a few technical problems with this impressively mature ``the States do it'' argument. On its face, I'm willing to say this may be true. Nearly every State in the union has some form of a balanced budget requirement. Unfortunately, however, this has not kept them out of debt.

Furthermore, their amendments have restricted their ability to care for their citizens in times of austerity or emergency. Quite frankly, I don't think that's an option for the Federal Government. And in the face of such an emergency, I think every constituent we represent would agree.

According to a Forbes analysis of the global debt crisis in January of 2010, every single State in the country is carrying some form of debt. These debts range from as little as $17 per capita in Nebraska to $4,490 in Connecticut.

In fiscal year 2012 approximately 44 States will face revenue shortfalls. Many are desperately looking for ways to declare their State bankrupt. Bankrupt. I say it again, Mr. Speaker, because this proposed amendment would place the Federal Government in an equally unacceptable predicament.

For instance, in Rhode Island, judges and court workers have cut pay and left 53 positions unfilled. This is still not enough to balance their budget. As a desperate last resort, the chief justice has begun to dispose of cases on backlog. Literally, the judge is tossing them out. Florida is in the same predicament.

This past week I spoke to the Federal courts in the Northern District of Illinois. Federal workers being laid off and furloughed, and men and women who have pensions and long investments in the system being told that the Federal courts in the Northern District of Illinois can no longer sustain themselves. I told them I would bring their message back to this Congress.

If this Congress can spend billions of dollars to fight a war in Afghanistan and Iraq, we can spend billions of dollars on scientific exploration, we can spend billions of dollars to put a man on the Moon, why can't we find the money in this Congress to put a man or a woman on their own two feet right here in America?

My colleagues across the aisle are so concerned about handing our children and grandchildren any amount of national debt that they fail to realize we are setting future generations up for failure. States are already cutting too many services that make the American workforce strong and competitive. Should the Federal Government do the same, our legacy will be an America that is undereducated, ill-equipped to compete on a global level.

What happens to America when both State and Federal Governments can't make the investments in the education our youth need to compete at the global level? When our State and national capitals are both hiding behind balanced budget amendments? What happens to America?

The ones who will suffer won't be the conservatives pushing for this amendment. It will be our poor, our children, our veterans, our elderly, the disabled, the America that doesn't have an interest in corporate tax rates, subsidies for big oil companies, or whether the Federal Government or insurance company underwrites their flood insurance. Everyday America will suffer.

The balanced budget amendment is the wrong key to the doors of prosperity. It fits inside the keyhole, it seems like a perfect match, but it really doesn't open the door. We twist it, we shake it, we fiddle with it, but wind up stripping the lock, doing more harm than good. And at the end of the day, we've moved no further, made no progress from where we started.

A BBA is not going to solve America's deficit crisis. According to the Center for Budget and Policy Priorities, Citizens for Tax Justice, and others, a Federal balanced budget amendment would damage our economy by making recessions deeper and more frequent, heighten the risk of default, and jeopardize the full faith and credit of the U.S. government, lead to reductions in needed investments in the future, favor wealthy Americans over middle- and low-income Americans by making it far more difficult to raise revenues and easier to cut programs. It would weaken the principle of majority rule, making balancing the budget more difficult.

And no one, to my satisfaction, not on the Democratic side and not on the Republican side, has explained to me yet what qualifies a Federal judge to intervene in this budget process and make a judgment about what programs to cut.

Do they have degrees in economics? Have they studied programs? Have they studied the needs of constituents around the country? Have they been to Appalachia? Have they been to the barrios, the ghettos, and the trailer parks of our Nation?

What qualifies a Federal judge to determine when someone's benefit or assistance should not be given to them? Nothing qualifies them, and yet this Congress votes tomorrow to change the Constitution of the United States as if their opinion should matter in this particular process.

Mr. Speaker, I want to go into a little bit more detail about these faults because I need my colleagues to understand the level of damage they'll cause if they continue to sugar this bill and force it down the throats of the American people.

First, a balanced budget amendment would damage the economy and make recessions deeper and more frequent. Under a BBA, Congress would be enforced to adopt a rigid fiscal policy requiring the budget to be balanced or in surplus every year regardless of the current economic situation or threat to the Nation's security. A sluggish economy with less revenue and more outgoing expenditures creates a deficit, as we've seen from recent events. A deficit necessitates economic stimulation in order to reverse negative growth.

This is why in the last session of Congress the American Recovery and Reinvestment Act invested in roads, bridges, mass transit, and other infrastructure. It provided 95 percent of working Americans with an immediate tax cut, extended unemployed insurance and COBRA for Americans hurt by the economic downturn through no fault of their own. If Congress were forced to function under a BBA, deficit reduction would be mandated, even more so during periods of slow or stalled economic growth, which is the opposite of what is needed in this situation.

My Republican colleagues have taken to finger-pointing about the stimulus package. Every day I see a commercial laughing about the embarrassing and painful ways it failed to push our economy out of recession. I find it funny that no one has talked about what would have happened without it.

Here in the Halls of Congress, we're expected to legislate on a vast number of issues; but we always try to take our advice from the experts. And the experts, the economists, told us we should have done more.

The BBA risks making the Nation's recessions more common and more catastrophic for middle class families, senior, veterans, the disabled, the poor. Under such an amendment, Congress is stripped of any power to adequately respond.

Secondly, a BBA would risk default and jeopardize the full faith and credit of the United States. We've already been down this road. We already know how dangerous that turn really is. In August, we teetered on the brink of default playing political games and pointing fingers. We couldn't pass a respectable debt ceiling increase, and we only needed a simple majority to do so.

A balanced budget amendment would bar the government from borrowing funds unless a three-fifths vote in both Houses of Congress permitted a raise in the debt limit. Under such a scenario, we wouldn't have been able to raise the debt limit in the last debate. A budget crisis in which a default becomes a threat is more likely and because of the limits placed on the fluidity of the debt ceiling, that default becomes more likely to occur.

After the chaos we just experienced a few short months ago after the downgrade of our Nation's credit rating, not because of our debt but because of our lack of ability to lead and govern, I would think, Mr. Speaker, that we would try to avoid an identical future situation. A BBA would exacerbate the same issues we saw in the August debt ceiling debacle.

Third, Mr. Speaker, a BBA would lead to reductions in needed investments for the future. Since the 1930s, our Nation has consistently made public investments that improve long-term productivity and growth in education, infrastructure, research and development. These efforts encourage increased private sector investment leading to budget surpluses and a thriving economy.

A balanced budget amendment which requires a balanced budget each and every year would limit the government's ability to make public investments, thereby hindering future growth.

For years, conservatives have abused the debt and the deficit as a springboard from which to argue for smaller government and cuts to programs that serve as social safety nets to the American families. Although we must consider the debt and deficit, the larger and more significant issue is the nature of the debt and what it created.

If you invest $50,000 in a business, a house, or an education, you can expect future returns on your investment. If you invest the same $50,000 in a gambling

debt, what is the future return? Both expenditures result in a $50,000 debt. But only one results in a return that can transform that debt into a long-term asset or gain.

Social investments provide the potential for greater returns in the long run in the same fashion as personal investments. Even small expenditures on social programs lay a foundation for great wealth in the long term. If the Nation chose to invest over a 5-year period $1.5 trillion in building roads and bridges and airports and railroads, mass transit, schools, housing, health care, we would create a debt. But the increased ability of companies to interact and shift their goods over well-paved and planned roads, the new businesses that would sprout around freshly built or newly expanded airports, the high wages of a student who is well-educated and able to attend college resulting in more tax revenue, the improved productivity of employees at their healthiest would eventually result in greater returns for our country.

The extension of Bush-era tax cuts for corporations and the rich brought about some short-term stimulus for consumer spending; but similar to the Reagan tax cuts, which resulted in record government deficits and debt, the long-term damage outweighs the immediate effects. Reagan's tax cuts for the rich came at the expense of investing in our Nation's need for long-term, balanced economic growth.

The Reagan administration neglected and cut back our Nation's investment in infrastructure, education, health care, housing, job training, transportation, energy conservation, and more.

The inclination of most conservatives in both parties--I'm not picking on Republicans today--in both parties, is to cut the debt by cutting programs for the most vulnerable amongst us--our poor, our children, our elderly, our disabled, and minorities. This approach, however, has proven false too many times. A balanced budget amendment would take us back to this archaic and ineffective system permanently.

Fourth, Mr. Speaker, a balanced budget amendment favors wealthy Americans over middle- and low-income Americans by making it harder to raise revenue and easier to cut programs. Under current law, legislation can pass by a majority of those present and voting by a recorded vote.

The BBA requires that legislation raising taxes must be approved on a rollcall vote by a majority of the full membership of both Houses. Before I even finish this point, Mr. Speaker, I want to make this point: look at the supercommittee. Look at what they're wrestling with. We don't even have a balanced budget amendment. Look at who they're targeting. Look at the emphasis of their cuts.

So instead of a balanced budget amendment in the Constitution, we already see that Congress is ineffective in light of what we've already passed. Imagine if it were a constitutional requirement.

The point is so simple, Mr. Speaker. The BBA would make it harder to cut the deficit by curbing special interest tax breaks of the oil and gas industries and making it easier to reduce programs such as Medicare, Medicaid, Social Security, veterans benefits, education, environmental programs, and assistance to poor children.

Wealthy individuals and corporations receive most of their government benefits in the form of tax entitlements while low-income and middle-income Americans receive most of their government benefits through programs.

As evidenced by the cuts that both parties agreed upon recently, it's far easier to cut social welfare programs than to cut spending on our military or to increase taxes. As long as spending is a political issue, cuts to those programs that assist those with the smallest voice in Washington will always happen first.

Raising taxes, the only option to address a budget deficit aside from cutting programs, is already a burdensome issue. The additional requirements of a BBA further complicate the process of raising taxes. This means the richest Americans will likely keep the benefits they receive from our government via tax cuts.

Meanwhile, the poor, they lose their programs that provide them with housing, with food, with health care, and the means to survive. This will further reinforce the growing gap between the rich, the rest of our society, middle class, working poor, and the destitute alike.

The BBA insists that the total government expenditures in any year, including those for Social Security benefits, not exceed total revenues collected in that same year, including revenues from Social Security payroll taxes. Thus, the benefits of the baby boomers would have to be financed in full by the taxes of those working and paying into the system then. This undercuts the central reforms of 1983.

Finally, Mr. Speaker, the BBA weakens the principle of majority rule and makes balancing the budget much more difficult. Most balanced budget amendments require that, unless three-fifths of the Members of Congress agree to raise the debt ceiling, the budget must be balanced at all times. They also require that legislation raising taxes must be approved on a roll call vote by a majority of the membership.

Mr. Speaker, in no way is this an exhaustive list. I know that my time is up, but this is my second attempt to bring my conservative friends to their senses. The only parties served by a balanced budget amendment are corporate interests and the wealthy, whom they seem to be serving instead of everyday working Americans.

My answer is ``no,'' Mr. Speaker, to the balanced budget amendment tomorrow. My answer is ``yes'' if my colleagues agree there is no way that they can pass the balanced budget amendment unless we, ourselves, agree that we must invest, build, and grow this economy and work our way out of this problem as Americans.

Mr. Speaker, I yield back the balance of my time.

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