Balanced Budget Amendment

March 31, 2011

Johanns Touts Balanced Budget Amendment As Strong Step Toward Sustainable Government

WASHINGTON – U.S. Sen. Mike Johanns (R-Neb.) and Senate Republicans today introduced a consensus Balanced Budget Amendment to the Constitution that would mandate a balanced federal budget. The amendment would require both Congress and the President to commit to a budget limiting federal expenditures to 18 percent of U.S. Gross Domestic Product (GDP), and would require supermajorities in both houses of Congress to raise taxes or increase the debt limit.

"The Balanced Budget Amendment marks a strong step toward where we need to be as a country, and that's on a path of sustainability," Johanns said. "We can either start making the tough decisions now, or be forced into reactionary measures later when our debt problems inevitably lead to a debt crisis. The American people have been tightening their belts and this amendment would make Congress do the same. If we want to get our economy on track and kick job creation into high gear, then we’re going to have to get spending under control. Our job creators aren’t going to hire until they have confidence we’re on the right path.

The Balanced Budget Amendment would:

• Require the President to submit to Congress a balanced budget that limits outlays to 18 percent of GDP.

• Require Congress to pass a balanced budget and limit federal outlays to 18 percent of GDP.
  • Exceptions include:
    1. Both houses by a two-thirds vote can provide for a specific excess
    2. Both houses by a majority vote can provide for a specific excess during a declared war;
    3. Both houses by a three-fifths vote can provide for a specific excess for a fiscal year during a military conflict declared to be "an imminent and serious military threat to national security" and the excess be limited to "outlays…made necessary by the identified conflict."

• Require a two-thirds vote from both houses for any bill that raises taxes or otherwise "increases the statutory rate of any tax or the aggregate amount of revenue."

• Require three-fifths vote from both houses to increase the debt limit;
  • Only a simple majority would be required during a time of declared war against a specific nation state.  

• Become effective the fifth fiscal year after ratification.

March 31, 2011

Hatch, Senate Republicans Unveil Balanced Budget Amendment to Constitution

Entire Senate Republican Conference Backs Constitutional Amendment to Require Balanced Budgets; Supermajorities for Deficit Spending, Tax Increases, Raising Debt Limit

Mark Eddington and Antonia Ferrier, (202) 224-5251

WASHINGTON – As part of his ongoing effort to restore the nation’s fiscal house, U.S. Sen. Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, today unveiled S.J. Res. 10, a Balanced Budget Amendment to the Constitution that will bring down the nation’s skyrocketing national debt by requiring the government to balance its budget, limiting the growth of government spending, and requiring supermajorities for tax increases.  

Hatch spearheaded negotiations for the proposed amendment which brings together major components of an amendment introduced earlier this year by Hatch and Senator John Cornyn (R-Texas) and a proposal by Sens. Mike Lee (R-Utah) and Jon Kyl (R-Ariz.). S.J. Res. 10 has garnered the support of the entire Senate Republican Conference, including Minority Leader Mitch McConnell (R-Ky.), Republican Whip Jon Kyl (R-Ariz.), Senate Republican Conference Chair Lamar Alexander (R-Tenn.), Chairman of the National Republican Senatorial Committee, John Cornyn (R-Texas.), and Chairman of the Senate Republican Policy Committee, John Thune (R-S.D.).

“Under the Obama Administration, federal spending has reached 25 percent of our nation’s economic output. We are spending at a level not seen since World War II and it is clear we cannot afford to sustain this White House’s big-spending, tax-hiking, debt-increasing agenda,” said Hatch.  “Hard-working families across the country have tightened their belts, balanced their budgets, and lived within their means, and the federal government ought to do the same. Regrettably, Washington has proven it won’t solve this crisis on its own. A Balanced Budget Amendment will be the shot in the arm Washington needs to effectively hold down spending.” 

Today, the national debt stands at more than $14 trillion. And, according to Congress’s non-partisan budget score-keeper, the Congressional Budget Office (CBO), the nation’s debt could reach an astonishing 90 percent of GDP in less than a decade with the government spending almost $1 trillion on interest payments alone.  A longtime champion of a Balanced Budget Amendment, Hatch has introduced similar proposals five times throughout his tenure in Congress and has supported or cosponsored proposals more than 20 times.  The Senate came within one vote of approving a similar amendment put forward by Hatch in 1997. 

In addition to 47 Republican cosponsors the Hatch Amendment has garnered the support of Americans for Tax Reform, Americans for Limited Government, Pass the Balanced Budget Amendment, 60 Plus Association, National Tax Limitation Committee, National Taxpayers Union, American Council for Health Reform, Americans for Prosperity, FreedomWorks, Grassroot Voices, EndingSpending.com and the Council for Citizens Against Government Waste. Clickhere to see their letters of support.

Specifically, S.J. Res. 10, the Balanced Budget Amendment:

• Mandates that total budgetary outlays for any fiscal year not exceed total revenues.
• Caps federal spending at 18 percent of GDP.
• Requires the President to submit a balanced budget to Congress every fiscal year.
• Requires a two-thirds supermajority for any new tax, any increase in tax rates, or any bill that is a net revenue raiser.   Requires a supermajority to raise the debt limit.
• Allows for waiver of limits if there is a formal declaration of war, if the U.S. is engaged in a military conflict constituting a threat to national security, or if two-thirds of both the House and Senate approve.