There has been a lot of talk about getting our nation's fiscal house in order. While some in Washington would like to simply fix up the front yard in order to improve "curb appeal," I believe that the time has come to give our fiscal house a new foundation and fundamentally reform the way our government spends money.
The U.S. government has carried a federal budget deficit for most of the past century, becoming far too comfortable with irresponsible spending. In recent years, costly government programs such as stimulus plans and bailouts have caused annual deficits to skyrocket, adding to the nation's towering mountain of debt. Interest payments on outstanding debt now represent the largest budget item after Social Security/Medicare and defense spending.
The lack of fiscal discipline and the escalating costs of the federal debt have created a dangerous combination that necessitates action to tie lawmakers' hands and prevent them from dipping into a seemingly bottomless cookie jar.
A balanced budget amendment would encourage Washington to restrain the unchecked growth in federal spending, force the American government to live within its means and separate lawmakers from the political incentives that spur them to deficit-spend. It will help Washington start living within its means just like American families must do.
It would limit federal expenditures and require a two-thirds vote in both chambers of Congress to run a deficit. This high threshold would restrict Washington from promising taxpayer money it does not have. The same supermajority would be needed to enact any tax increase, making it difficult for lawmakers to simply raise taxes to compensate for more spending.
By slowing the insidious growth of government, a balanced budget amendment is a major step on the path to fiscal discipline. More responsible spending from Washington will result in certainty and stability in the economy and will help job creators innovate and grow.
The explosive growth of government — and the deficit-financed spending needed to fuel that growth — accounts for a large portion of recent years' staggering deficits. The Obama administration's economic stimulus program, implemented in 2009 as a knee-jerk reaction to a sinking economy, cost nearly $1 trillion but produced few tangible achievements and fewer jobs.
Our skyrocketing debt has gotten so severe that credit agencies have threatened to downgrade our nation's rating. A smaller, leaner government that spends only what it takes in is the fiscally responsible path forward. Should we avoid this path, we will find ourselves in debt ceiling debacle year after year.
Unlike the federal government, 49 states are required to balance their budgets. Facing budget shortfalls, states made the difficult choices — why should the federal government be held to a different standard?
A balanced budget amendment imposes the fiscal discipline desperately needed and sends a strong signal that Washington will not saddle future generations with burdensome debts that crowd out the private sector and lead to increased taxes and interest rates.
Solidifying fiscal discipline by passing a balanced budget amendment could be the smartest fiscal decision this Congress has ever made.