Constitutional amendment to require balanced federal budget?

WheresMyWhite
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Constitutional amendment to require balanced federal budget?

Postby WheresMyWhite » Tue Nov 22, 2016 3:09 pm

Would you support an amendment to the US Constitution to require a balanced federal budget?

LeoApp
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Re: Constitutional amendment to require balanced federal budget?

Postby LeoApp » Tue Nov 22, 2016 3:20 pm

No. This idea has been floated before. They already have an obligation to balance the budget.

WheresMyWhite
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Re: Constitutional amendment to require balanced federal budget?

Postby WheresMyWhite » Tue Nov 22, 2016 10:32 pm

But they don't....

An "obligation" vs requirement might make a difference. And maybe we could stop the debt meter???

boots-aregard
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Re: Constitutional amendment to require balanced federal budget?

Postby boots-aregard » Wed Nov 23, 2016 2:02 am

The problem with a balanced budget (and no deficit spending) is that some things require money when there isn't money, and governments (city, county, state and federal) don't have savings accounts so they can save up against future need. (which is also why, coincidentally, "running the country like I run my household" is a false comparison).

Some big important things that require money when there isn't money would be war, economic recovery, national or regional catastrophe, and certain long-term building projects that take 10-15 years. etc.

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Re: Constitutional amendment to require balanced federal budget?

Postby LeoApp » Wed Nov 23, 2016 3:41 pm

I don't think the Constitution should be cluttered with amendments like these. And what if there was one and the budget still was not balanced? What repercussions would there be?

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Re: Constitutional amendment to require balanced federal budget?

Postby WheresMyWhite » Wed Nov 23, 2016 3:49 pm

I came from a state (CO) which *did* have a balanced budget requirement for all budgets (i.e., state and local). It can be done.

IMO, it does make governments learn to tighten their belts, be smart about where funding is spent, where revenue is derived and build in a "savings account" if there is a sudden need for extra dollars. Maybe the Feds don't have a "savings account" but have you looked in detail at your state and local governments to see if they have a risk-type "pot" (fund) for those unplanned emergencies? They don't always need to start over from scratch at the start of every fiscal year.

Without a balanced budget requirement, it is far easier for any government entity to continue to spend into oblivion without taking much "thought" into consideration about how things are paid for because there is always that blank check.

clanter
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Re: Constitutional amendment to require balanced federal budget?

Postby clanter » Sat Nov 26, 2016 1:14 pm

I am pretty sure all states but Vermont have some balance budget requirement on the book or contained with in their constitutions

Rainy day funds are used as a bridge to cover short falls, our little town has nearly a year's worth stashed away. Texas has just under $10B setting aside (but the legislators all drool over ways to spend every last cent)

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Re: Constitutional amendment to require balanced federal budget?

Postby WheresMyWhite » Sat Nov 26, 2016 4:43 pm

clanter wrote:I am pretty sure all states but Vermont have some balance budget requirement on the book or contained with in their constitutions


To finish off this statement as it is a bit, IMO, misleading to quote just this statement... this article (not sure where clanter actually got his info from) is quite old...


STATE BALANCED BUDGET REQUIREMENTS

Executive Summary
Updated 12 April 1999
State Balanced Budget Requirements
Requirements that states balance their budgets are often said to be a major difference between state and federal budgeting. State officials certainly take an obligation to balance the budget seriously, and in the debate over a federal balanced budget in the early- and mid-1990s, much of the discussion centered on the states' with balanced budgets. This article is concerned with the nature, definition and eforcement of state balanced-budget requirements.
Nature of state balanced-budget requirements All the states except Vermont have a legal requirement of a balanced budget. Some are constitutional, some are statutory, and some have been derived by judicial decision from constitutional provisions about state indebtedness that do not, on their face, call for a balanced budget. The General Accounting Office has commented that "some balanced budget requirements are based on interpretations of state constitutions and statutes rather than on an explicit statement that the state must have a balanced budget."
The requirements vary in stringency from state to state. In some states the requirement is that the introduced budget be balanced, or that the enacted budget be balanced. In other states policymakers are required to ensure that expenditures in a fiscal year stay within the cash available for that fiscal year. Other states may carry unavoidable deficits into the next fiscal year for resolution.
There are three general kinds of state balanced budget requirements:
The governor's proposed budget must be balanced (43 states and Puerto Rico).
The budget the legislature passes must be balanced (39 states and Puerto Rico).
The budget must be balanced at the end of a fiscal year or biennium, so that no deficit can be carried forward (37 states and Puerto Rico).
Such provisions can be either constitutional and statutory, but are more rigorous if they are constitutional since they are not subject to legislative amendment. Some states have two or all three of the possible balanced-budget requirements, and a few have only a statutory requirement that the governor submit a balanced budget. Weighing such considerations against one another, one federal study concluded that 36 states have rigorous balanced-budget requirements, four have weak requirements, and the other 10 fall in between those categories.
What has to be balanced? State balanced budget requirements in practice refer to operating budgets and not to capital budgets. Operating budgets include annual expenditures--such items as salaries and wages, aid to local governments, health and welfare benefits, and other expenditures that are repeated from year to year. State capital expenditure, mainly for land, highways, and buildings, is largely financed by debt. Court decisions and referendums on borrowing have led to the exclusion of expenditures funded by long-term debt from calculations whether a budget is balanced.
In practice, the following kinds of state revenues and expenditures also have little impact on state balanced budgets:
Almost all federal reimbursements or grants to a state are committed to specific purposes, and the governor and legislature have little discretion over the use of most federal funds.
Transportation trust fund money raised from state motor fuel taxes is usually earmarked for highways and other transportation purposes.
Some tax collections may be diverted to local governments or other specified purposes without appropriations.
Some states allow agencies or programs to collect and spend fees, charges or tuition without annual or biennial appropriations.
In each case, it is practically impossible for revenues and expenditures to get out of balance, since expenditures are controlled by available funds.
Thus it is not surprising that the focus of "balancing the budget" tends to be on the general fund although general fund expenditures compose only 50 percent to 60 percent of total state spending.
Enforcement of balanced budget requirements State requirements for balanced budgets do not impose legal penalties for failure to do so. There are, however, two sorts of enforcement mechanisms. Prohibitions against carrying deficits into the next fiscal year and restrictions on the issuance of state debt help to enforce balanced budget provisions by making it difficult to finance a deficit. In many states governors or joint legislative-executive commissions can revise budgets after they are enacted to bring them into balance.
Unlike the federal government, states are not able to issue debt routinely. Issues of general obligation debt require at least the approval of the legislature and in many states, voter approval. The issue of revenue bonds requires legislation to create an agency to issue bonds and the creation of a revenue stream to repay the debt. These practices mean that the issuance of debt is fully in the public view. It is extremely rare for a state government to borrow long-term funds to cover operating expenses, although. Louisiana did in 1988 and Connecticut did in 1991. There do not appear to be any other examples of this practice from recent years.
A legislature and governor can jointly revise a budget at any time. But most legislatures are not in session throughout the year, and some legislatures meet only for a few months every other year. Requiring legislative consent for every change in a budget would impose delays or the costs of special sessions. Therefore, many state constitutions allow governors or special commissions to revise budgets after they have been enacted to bring expenditures into line with revenues.
Thirty-six states allow governors some degree of authority to reduce spending when it is necessary to maintain a balanced budget, even if enacted budgets call for specific amounts of expenditure. Some states prohibit executive budget revisions, and many restrict the amounts and nature of such reductions. Some states have, in addition, joint legislative and executive boards or commissions that are constitutionally permitted to make budget revisions, for example, to deal with unforeseen revenue shortfalls, emergencies, or unanticipated federal funds.
Practice State balanced-budget rules are not as rigid as those recommended for the federal government in the early 1990s, which would have forbidden total expenditures above total revenues in any year and would have prohibited new borrowing. By this standard, states routinely run deficits because they borrow to finance capital expenditures. But this does not violate state balanced-budget requirements. Nor does rolling deficits in operating funds forward from one fiscal year to another, if a state constitution permits the practice.
Fiscal stress, however, can induce governors and legislators to adopt expedients so they can observe the letter, if not the spirit, of balanced budget requirements. Among these are sales of state assets, postponing payments to vendors, reducing payments to pension funds, borrowing from one state fund to finance expenditures from another, and "creative" accounting. Such expedients reflect the stress that can arise between legal demands for a balanced budget and political demands for the continuation of state programs without tax increases. The fact that such expedients tend to be limited to times of fiscal stress is in itself a measure of how seriously state elected officials take their responsibility to produce balanced budgets.
Sources:
Advisory Commission on Intergovernmental Relations, Fiscal Discipline in the Federal System: National Reform and the Experience of the States (Washington, D.C., 1987).
Briffault, Richard, Balancing Acts: The Reality Behind State Balanced Budget Requirements (New York: The Twentieth Century Fund Press, 1996).
Snell, Ronald K., State Balanced Budget Requirements: Provisions and Practice (Denver, Colo.: National Conference of State Legislatures, 1996).


http://www.ncsl.org/research/fiscal-policy/state-balanced-budget-requirements.aspx

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Re: Constitutional amendment to require balanced federal budget?

Postby PaulaO » Tue Nov 29, 2016 4:26 pm

It doesn't matter if it's in the Constitution or not. A balanced budget is pipe dream. It could never happen. Budgets like the U.S. are strictly on paper; there is no "real" budget or money.


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