A Modest Balanced Budget Proposal

“The Impossible Dream” was not written as a theme song for conservatives. Conservatives are supposed to be realists. They are supposed to understand statesmanship as the art of making the best of what is often a bad, and always an imperfect, situation. They are supposed to leave the utopianism to liberals and progressives.

Some American conservatives, however, insist on dreaming the impossible dream by aspiring to a balanced budget amendment to the Constitution. Senator Mike Lee of Utah began the year by introducing an amendment in Congress. More recently, Governor John Kasich of Ohio has publicly called for a similar proposal.

It is difficult to think of a public policy proposal that is more certainly doomed to failure. It takes the approval of two-thirds of each house of Congress, or two-thirds of the state legislatures requesting a convention, merely to propose changes to the Constitution. Ratification of such proposals requires the consent of three-fourths of the states. While it is true that the public generally deplores deficit spending, it does not deplore it so forcefully or overwhelmingly as to overcome the serious obstacles posed by the amendment process.

Moreover, a balanced budget amendment is not only impracticable but also undesirable, as I have argued before at Public Discourse. If it were framed as a simple prohibition on deficit spending, it would make effective government impossible. Crises will predictably arise that require any government to borrow, as the founders recognized when they authorized Congress to borrow money on the credit of the United States. On the other hand, if a balanced budget amendment were framed such as to avoid this problem, it would simply create others. If it were to require supermajorities in Congress to authorize deficits, for instance, then it would depart from our fundamental commitment to democratic self-government, since it would allow legislative minorities routinely to forbid what majorities desire.

Nevertheless, the conservative impulse toward a balanced budget, at least as the norm in public policy, is reasonable. Among the founders, Alexander Hamilton argued vigorously that the borrowing power is essential to good government. Yet even Hamilton would probably have balked at our ongoing deficits. He thought debt inseparable from government because governments are intended to live forever, and they therefore continually encounter new crises that often require going into debt. But habitual deficit spending, built into the government’s ordinary operations, he would have regarded as poor administration. Even contemporary Keynesians, who understand deficit spending as a tool whereby government can manage the economy, cannot defend habitual deficits, since Keynsianism likewise regards budget surpluses as a necessary tool of economic management under the right circumstances.

Conservatives, therefore, should seek to do what they can within reason to promote balanced budgeting. Leaving aside unrealistic plans to pass a balanced budget amendment, they should seek more limited policy reforms that move us in the direction of a balanced budget.

Herewith, then, a modest proposal: conservatives should introduce legislation requiring the president to submit a balanced budget to the Congress each year. Such a reform would be helpful with a view to fiscal discipline, but would not be subject to the policy objections that attend a balanced budget amendment. In addition, it is politically attainable.

The beginning of movement toward any desired policy objective is conceiving it and planning for it. Under our current budgeting procedures, no actor in the government of the United States is obliged to undertake these elementary first steps toward fiscal responsibility. As a result, all deliberation about balancing the budget has an air of abstraction and even unreality about it. No one proposes a budget that is balanced for the present fiscal year under present economic conditions. They instead propose budgets that attain balance in, say, ten years, on the basis of necessarily speculative predictions about economic conditions that will prevail in the future.

This kind of deliberation fosters the sense that balancing the budget now would be impossibly painful. Yet no one is in a position to make this judgment rationally, because no one is obliged to set forth a balanced budget on the basis of which the people and their representatives could judge the specific sacrifices that a balanced budget would require. In sum, the reform here proposed would at least transform a balanced budget from a mere wish into an actual proposal, which is a not insignificant step forward.

In addition, this proposal would foster at least some public pressure on policy-makers not to engage in deficit spending, or at least not without a powerful reason. Legislators would no longer begin their deliberations from a budget based simply on the previous one, one with greater expenditures than revenues. They would instead begin from a balanced budget proposal that would at least be technically feasible, if politically difficult. This would be enough to undermine the now-prevailing sense that deficit spending is automatic or habitual, almost as if it were out of anyone’s control.

In such a situation, a legislator’s vote for deficit spending will appear to be more of a free choice, a deliberately willed departure from a more fiscally restrained option. Creating such a situation would do something to transform the public’s general disapproval of deficit spending into a more concrete objection to the decisions of specific legislators.

At the same time, a law requiring the president to submit a balanced budget is not subject to the reasonable complaints that arise in response to a balanced budget amendment. It would not impose a fiscal straitjacket on the country, contrary to effective government, nor would it require supermajorities to borrow money, contrary to our commitment to democratic self-government. Requiring the president to submit a balanced budget does not require Congress to enact one, nor would it require Congress to appropriate only the amounts provided for in the president’s balanced budget submission. Congress would be free to deliberate about whether the nation’s well-being requires borrowing, but it would be able to do so on the basis of an actual proposal showing what would be required to do the nation’s business without borrowing.

For that matter, there is no reason why such a policy reform should constrain even the president’s ability to deliberate about public spending. If he is required to prepare and submit a balanced budget, this is no bar to his arguing for spending in excess of government revenues, if he thinks such spending is necessary to the common good. He would have the State of the Union Message and innumerable other interactions with Congress in which he could do so. Indeed, the law could even permit him to submit an unbalanced budget reflecting his best judgment about public spending levels, so long as he also submits the balanced budget required to inform Congress’s fiscal deliberations.

Finally, such a reform is much more attainable than a balanced budget amendment to the Constitution. It would require nothing but a change in law, enacted by simple majorities in each house of Congress and then signed by the president. The budgetary process is governed by laws enacted by Congress. The president’s role in that process is also prescribed by law: he is already legally required to submit a budget to Congress. The proposed reform here would simply add to his responsibilities the duty to think through a balanced budget and commit it to writing for Congress’s consideration.

Of course, those who are not particularly interested in achieving a balanced budget might object to such a reform. The modesty of the proposal, however, would make it much harder to oppose than a balanced budget amendment. Who, after all, could reasonably oppose merely requiring the president—with the ample help of the expert budgetary bureaucrats at the Office of Management and Budget—to figure out what a balanced budget would look like for the country, simply as an aid to the public deliberations, especially when he remains free to recommend deficit spending as well, if he thinks it is justified?

Those who would oppose such a reform would reveal themselves as unwilling even to think and talk about balancing the budget. It could only be helpful to conservatives to move the conversation in this direction, and thus to make liberals try to defend such indefensible territory.