The Constitution & The Economy

Our Fiscal Illness Needs Constitutional Medicine
When I sponsored my first balanced budget amendment in June 1979, the national debt was $771.5 billion.  When the Senate failed by one vote to pass my balanced budget amendment in March 1997, the national debt had grown to $5.4 trillion.  And last month, it was up to $14.6 trillion.  Few things are more certain than death, taxes, and the inability of the federal government to live within its means.  The crisis is real, and only one approach will solve it.  The American people must be allowed to use the Constitution finally to impose real fiscal restraint on the federal government.

The Constitution is the law by which the American people ultimately govern their government.  James Madison wrote that since the Constitution comes from them, the path to changing the Constitution “ought to be marked out and kept open for great and extraordinary occasions.”  If the deepening fiscal crisis facing America is not a great and extraordinary occasion, I don’t what is.

Interest on the debt rises right along with the debt, and today 100 percent of tax revenues are spent on mandatory spending and interest on the debt.  Every penny for discretionary spending is borrowed, and annual budget deficits now top one trillion dollars.  The national debt is now as large as our entire economy, an unsustainable level that is like a lead weight around its neck, slowing growth and costing jobs.  The Department of Commerce reported last month that real gross domestic product grew at an annual rate of only one percent in the second quarter; as bad as that is, the rate was an even more anemic .4 percent in the first quarter.  If the economy was a patient, it would be on life-support.

But the cost of the national debt goes beyond the economic.  Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff, calls the national debt “the most significant threat to our national security.”  Secretary of State Hillary Clinton says that it “sends a message of weakness internationally.”

Congress has promised over and over to change but, like addicts everywhere, has proven only that it cannot do so on its own.  To paraphrase the first three of the well-known 12 steps that help individuals recover, it is time for Congress to admit it is powerless over spending and debt, come to believe that a power greater than itself can restore fiscal sanity, and decide to turn its will and life over to the care of the American people.

The way to do that is for Congress to propose a balanced budget amendment and let the American people set the fiscal rules by which the federal government should operate.  That amendment should both set firm fiscal boundaries for Congress and allow Congress to exceed those boundaries under certain circumstances.  That will allow for changing situations but hold members of Congress accountable.  Two-thirds of the Senate and House voting for such an amendment does not make it part of the Constitution, but lets the American people decide.

The bottom line is that the path we are on will only get worse and Congress cannot solve this crisis by itself.  Legislative efforts to change the way the system works have had grand names such as the Balanced Budget and Emergency Deficit Control Act but lasted no more than a year or two.  We cannot afford to pretend any longer, to play the fiscal fiddle while the economy and our children’s future burn.  It is time to set new rules, constitutional rules, to finally restore fiscal sanity.

Senator Orrin G. Hatch, Utah Republican, is the Ranking Member of the Senate Finance Committee and a member of the Joint Committee on Taxation.