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Letter


NTU Writes in Support of H.J. Res. 24, the "Business Cycle Balanced Budget Amendment" (BCBBA)

February 7, 2013


The Honorable Justin Amash
United States House of Representatives
114 Cannon House Office Building
Washington, DC 20515

Dear Representative Amash:

On behalf of the 362,000 members of the National Taxpayers Union (NTU), I write in support of H.J. Res. 24, your “Business Cycle Balanced Budget Amendment” (BCBBA). This creative proposal would amend the U.S. Constitution to incorporate a mechanism providing for long-term balance of the federal budget. It would provide Congress with budgeting flexibility while still maintaining real protections from the out-of-control spending that threatens our solvency.

Instead of requiring annual balance, the BCBBA establishes an expenditure level based on a three-year average of prior revenues plus adjustments for inflation and population growth. Unlike restrictions that are based on measurements of the size of the economy, the BCBBA’s main aspect is tied to previous revenue. This has the benefit of being a “knowable” number rather than an estimate, while utilizing a three-year average ensures that temporary fluctuations do not translate into wild swings in federal spending.

The BCBBA combines this common-sense spending rule with a simple provision allowing for a robust supermajority of Congress to waive the amendment’s restrictions in the case of an emergency. This failsafe would allow Congress the ability to budget for true national security or economic emergencies without opening a large loophole through which massive amounts of non-urgent spending could be driven.

It should be noted that NTU continues to support several paths toward constitutional fiscal discipline, including amendments to prevent spending and taxation from growing beyond their historical shares as a percentage of our economy. However, we believe that the BCBBA would also achieve many of the same goals that other measures can by properly aligning incentives in budgetary policy. Because its structure provides for long-term balance while allowing for short-term fluctuations, there would be no justification for rushing to enact tax hikes in order to meet any annual requirements. The result would be a federal budget that is much more stable and predictable in its growth while still encouraging fiscal responsibility and affordability for taxpayers.

NTU has approached the current legislative evolution of the BBA not merely as an interested observer or even as a concerned stakeholder. Instead, we view this process through a 44-year organizational history, in which constitutional reforms to help guide deliberation on the size of government have occupied the central part of our mission. The federal budget has only been balanced five times since NTU’s founding in 1969. This dismal record proves that neither “political will” nor statutory measures are up to the challenge of protecting taxpayers and providing for a sustainable fiscal future.

Through its innovative structure, the BCBBA would properly enshrine long-term balance in our Constitution while facilitating substantial flexibility. The BCBBA is a worthy approach to long-term fiscal discipline. We urge Representatives to co-sponsor H.J. Res. 24 and to work toward its enactment.

Sincerely,

Nan Swift
Federal Affairs Manager