Dear Senator:
Onbehalf of the 362,000 member National Taxpayers Union (NTU), I write to provideour strong endorsement of the “Consensus Balanced Budget Amendment” (BBA),which is the product of negotiations among advocates of several BBA measures.We commend Senator Hatch and his colleagues, Senators Lee, Cornyn, Kyl,McConnell, Toomey, Snowe, Risch, Rubio, DeMint, Paul, Vitter, Enzi, Kirk, andCrapo, for introducing this legislation and urge all Senators to cosponsor theresolution.
NTU has approached the currentlegislative evolution of the BBA not merely as an interested observer or evenas a concerned stakeholder. Instead, we view this process through a40-plus-year organizational history in which constitutional limits on the size ofgovernment have occupied the central part of our mission.
Throughoutthe 1970s and 1980s, my organization helped to launch and sustain the movementfor a limited Article V amendment convention among the states to propose aBalanced Budget Amendment (BBA) for ratification, all while pursuing a BBAthrough Congress. Our members were elated over the passage of S.J. Res. 58 in1982, and the passage of H.J. Res. 1 in 1995 through the House ofRepresentatives. In both cases the measures, whose provisions varied somewhat,fell short of enactment in the other chambers of Congress. More recently, wehave provided endorsements to BBA legislation such as S.J. Res. 3 and H.J. Res.1.
Toour members, a BBA would provide the very lifeblood that will restore and sustainthe financial health of our Republic. We are therefore elated over theintensifying interest among Members of Congress and state legislators in aunified BBA concept. The proposal admirably harnesses this energy, by combiningand refining elements from several amendments introduced thus far in Congress.These include strong “supermajority” safeguards against reckless tax or debtincreases as well as override provisions to confront the realities of militaryconflicts.
Alsoof great importance is the amendment’s spending limitation clause. Althoughseveral types of mechanisms could answer to the purpose of controlling growthin expenditures, any such protection incorporating Gross Domestic Product (GDP)must pay careful heed to historical experience. In this case, an annualspending cap at 18 percent of GDP is clearly the most prudent choice. Such alevel reflects the share of economic output that federal revenues havetypically represented since World War II. Given that constitutional amendmentsshould be designed with a long nod to the past and an equally farsighted viewto the future, 18 percent is a most stable and logical benchmark.
Inaddition, setting the expenditure limit at 18 percent would make a vitalcontribution toward harmonizing all parts of the amendment so that the wholefunctions as intended. An assumption that spending should normally be linked tothe average and customary federal revenue proportion would by its very naturegive Congress and the President a starting point that is closer to balance.Indeed, the limit helps to remedy Washington’s increasingly metastasizedaffliction of tax-spend-and-borrow, by elevating the concept of expenditurerestraint to its rightful place in policymaking. While the two-thirds“supermajority” override requirement is essential to ensuring this place, so isthe 18 percent cap on expenditures. If set too high, the spending limit wouldmerely institutionalize, rather than minimize, deficits. Recent spending-to-GDPratios in excess of 20 percent – and the resulting pressures to borrow or taxeven more – ought to convince fiscal disciplinarians of the need for acarefully-designed limit.
Weunderstand the political environment within which the consensus BBA wascrafted, and, given our history, we appreciate the many challenges in the legislativeeffort that lies ahead. Yet it is precisely our longstanding devotion to thisreform that gives us cause to make several observations. Moving forward,Senators must commit to passage ofthe BBA in this Congress, not simplyanother “test vote” tied to some legislative urgency. This means making theAmendment a part of the Congress’s everyday narrative on tax and spendingpolicy, thereby leading a national discussion that occupies a primary place inthe public square. Nor should the BBA be held as some proxy to other reformapproaches. Indeed, statutory or regulatory steps to control the nation’sfinances are not “second-best” substitutes; their very effectiveness dependsupon a constitutional foundation that will set the boundaries within which theycan operate.
Furthermore,supporters of this BBA must reach far and wide across the aisle to obtain thenecessary bipartisan backing that will ensure passage of the measure. Thetemptation to put electoral calculations first is unacceptable to taxpayers,who (properly) surmise that concerted action to control deficits cannot waituntil after 2012. Likewise, Senators must engage their House colleagues as wellas state legislators in their capitols back home, many of whom have both thecommitment and the experience to see the BBA through to passage andratification.
Throughall of these means, and toward the critical end of enacting a Balanced BudgetAmendment, NTU and members pledge the fullest possible measure of their time,energy, and resources. Together, we can fulfill this long-overdue obligation tofuture generations.
Sincerely,
PeteSepp
ExecutiveVice President