What is the difference between a balanced budget amendment and never

[Beet]

raising the debt ceiling again? Let's take a straightforward amendment that requires the budget to be constantly balanced. There is no difference between this and not raising the debt ceiling. The two achieve the exact same outcome. The whole notion of a bill to raise the debt ceiling in exchange for a balanced budget amendment is an inherent contradiction. The latter could be achieved simply by not raising the debt ceiling (Congress goes home today) plus legislation prohibiting all future generations from ever raising the debt ceiling.

[Marston]

I believe the balanced budget amendment has an exemption clause for war of something of that sort. Default wouldn't allow for that.

[Beet]

I believe the balanced budget amendment has an exemption clause for war of something of that sort. Default wouldn't allow for that.

We are are war, and have been for the past 10 years.

[WillK]

raising the debt ceiling again? Let's take a straightforward amendment that requires the budget to be constantly balanced. There is no difference between this and not raising the debt ceiling. The two achieve the exact same outcome. The whole notion of a bill to raise the debt ceiling in exchange for a balanced budget amendment is an inherent contradiction. The latter could be achieved simply by not raising the debt ceiling (Congress goes home today) plus legislation prohibiting all future generations from ever raising the debt ceiling.

This is incorrect.  

There are current expenditures for which the government has created an obligation to pay.  I gave an example in another thread of architecture, engineering and construction firms working on an infrastructure project here in Boston -- i gave that example becuase I work for one of those firms.  The project is funded by the feds under a contract that has already been executed and work has been done during the month of July for which invoices are about to be submitted.  Failure to pay those invoices is not the same as enacting a balanced budget amendment.  

Furthermore, cash flow management can require short term borrowing since the timing of inflows and outflows are not always matched (this is how all businesses generally operate).  Forbidding any borrowing would make government operations dysfunctional.  

[Beet]

WillK, I'm on such a contract as well.

But those contracts are paid out of discretionary spending, and as you know the total sum of discretionary spending is less than the difference between the size of the deficit and mandatory spending. In other words, there would be no way for the government to balance its budget tommorrow without violating those contracts. And between a constitutional amendment and a legal contract, the Courts would surely recognize the Constitution as the higher law of the land and strike down your contract as unConstitutional.

With regard to your point on cash flows, that is a short term problem that would be corrected within a year as the Treasury learns how to operate on a much smaller pile.

The bigger point here is that not raising the debt ceiling for the rest of the Obama Presidency affects on the present generation, while a constitutional amendment would bind all future generations. There is really no comparison.

[True Federalist (진정한 연방 주의자)]

WillK, I'm on such a contract as well.

But those contracts are paid out of discretionary spending, and as you know the total sum of discretionary spending is less than the difference between the size of the deficit and mandatory spending. In other words, there would be no way for the government to balance its budget tommorrow without violating those contracts. And between a constitutional amendment and a legal contract, the Courts would surely recognize the Constitution as the higher law of the land and strike down your contract as unConstitutional.

With regard to your point on cash flows, that is a short term problem that would be corrected within a year as the Treasury learns how to operate on a much smaller pile.

The bigger point here is that not raising the debt ceiling for the rest of the Obama Presidency affects on the present generation, while a constitutional amendment would bind all future generations. There is really no comparison.

Actually if the courts got involved, which I sincerely hope doesn't happen, they'd probably order a reduction in programs such as Social Security.  Payment of Social Security is not a contractual obligation of the Federal government.  While it would be politically impossible to do so, legally Social Security could be repealed tomorrow and all those expecting to get paid would have no legal recourse.

[Marston]

I believe the balanced budget amendment has an exemption clause for war of something of that sort. Default wouldn't allow for that.

We are are war, and have been for the past 10 years.

I think you missed my point or perhaps I need to be clearer. The proposed balanced budget amendment allows for deficit spending via the overseas contingency fund. If we defaulted on our obligations, the Treasury, President, or whoever would have to prioritize payments.

You said that the amendment would require the budget to be "constantly balanced". That isn't true when it allows for deficit spending for wars. Defaulting does not.  

As such, the two are not exactly the same thing. Just pointing that out.

[Beet]

I believe the balanced budget amendment has an exemption clause for war of something of that sort. Default wouldn't allow for that.

We are are war, and have been for the past 10 years.

I think you missed my point or perhaps I need to be clearer. The proposed balanced budget amendment allows for deficit spending via the overseas contingency fund. If we defaulted on our obligations, the Treasury, President, or whoever would have to prioritize payments.

You said that the amendment would require the budget to be "constantly balanced". That isn't true when it allows for deficit spending for wars. Defaulting does not.  

As such, the two are not exactly the same thing. Just pointing that out.

A couple of points

1) Why are you talking about defaulting? Not raising the debt limit is not the same as defaulting. We would not default in either case. Stuff like Social Security would be cut, as Ernest said above.

2) Do you have a link to the overseas contingency stuff?

UPDATE: Here we have the text of an amendment introduced in January. This one makes no mention of overseas contingency spending, but it does reference military conflict caused by ... "imminent and serious military threat to national security and is so declared by a joint resolution, adopted by a majority of the whole number of each House, which becomes law."

In other words, something that would have been adopted on September 12, 2001 (in this version).

The rest of the amendment refers to 3/5ths majorities. Basically it's attempting the Californization of US fiscal politics.

[WillK]

But those contracts are paid out of discretionary spending ...

Based on a previously adopted budget.  If a balanced budget amendment were put in tomorrow it would affect the upcoming budget but not the one previously adopted.

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That short term problem is what makes not raising the ceiling different than an amendment.

[Beet]

But those contracts are paid out of discretionary spending ...

Based on a previously adopted budget.  If a balanced budget amendment were put in tomorrow it would affect the upcoming budget but not the one previously adopted.

Fair enough, but these previously adopted budgets would soon fade into the past, and Congress would have to drastically cut discretionary spending, including the types of contracts to which you refer. The difference you point out is basically only one of a short-term implementation lag.

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That short term problem is what makes not raising the ceiling different than an amendment.
[/quote]

Ok, it is different for the very short term. But in the long term, not raising the ceiling would also be a decision that could be reversed by a democratic majority, while an amendment would require a supermajority. That long term impact has multiples more impact than anything that happens in the next year.

[WillK]

To me, the problem with not raising the debt ceiling next week is the chaos and uncertainty it would create.   

I think a balanced budget amendment is a bad idea, but its impact is on the future budget processes and not throwing the current system into confusion.

But those contracts are paid out of discretionary spending ...

Based on a previously adopted budget.  If a balanced budget amendment were put in tomorrow it would affect the upcoming budget but not the one previously adopted.

Fair enough, but these previously adopted budgets would soon fade into the past, and Congress would have to drastically cut discretionary spending, including the types of contracts to which you refer. The difference you point out is basically only one of a short-term implementation lag.

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That short term problem is what makes not raising the ceiling different than an amendment.

Ok, it is different for the very short term. But in the long term, not raising the ceiling would also be a decision that could be reversed by a democratic majority, while an amendment would require a supermajority. That long term impact has multiples more impact than anything that happens in the next year.
[/quote]

[Beet]

To me, the problem with not raising the debt ceiling next week is the chaos and uncertainty it would create.   

I think a balanced budget amendment is a bad idea, but its impact is on the future budget processes and not throwing the current system into confusion.

I think there are two bad choices. I hate the chaos and uncertainty you speak of, although I do not believe it would result in default. The result would be something akin to a government shutdown while Washington became very focused on the debate. I do not believe it would last longer than a month or two.

However the other side of the coin, supposing a Balanced Budget Amendment were enacted, we are talking about permanently curtailing majority rule on matters of the purse for the rest of the history of the US, or until such time as the Amendment could be repealed. I was ready to cave to Boehner last week, but this has potential epochal proportions and simply isn't worth caving over, IMHO.

[Marston]

I believe the balanced budget amendment has an exemption clause for war of something of that sort. Default wouldn't allow for that.

We are are war, and have been for the past 10 years.

I think you missed my point or perhaps I need to be clearer. The proposed balanced budget amendment allows for deficit spending via the overseas contingency fund. If we defaulted on our obligations, the Treasury, President, or whoever would have to prioritize payments.

You said that the amendment would require the budget to be "constantly balanced". That isn't true when it allows for deficit spending for wars. Defaulting does not.  

As such, the two are not exactly the same thing. Just pointing that out.

A couple of points

1) Why are you talking about defaulting? Not raising the debt limit is not the same as defaulting. We would not default in either case. Stuff like Social Security would be cut, as Ernest said above.

2) Do you have a link to the overseas contingency stuff?

UPDATE: Here we have the text of an amendment introduced in January. This one makes no mention of overseas contingency spending, but it does reference military conflict caused by ... "imminent and serious military threat to national security and is so declared by a joint resolution, adopted by a majority of the whole number of each House, which becomes law."

In other words, something that would have been adopted on September 12, 2001 (in this version).

The rest of the amendment refers to 3/5ths majorities. Basically it's attempting the Californization of US fiscal politics.

I was talking about defaulting in regards to some of our obligations, not the National Debt. I know, not the right use of 'default' per se but, hey, that's the term the pols and talking heads are using and it's rubbing off.

You're right on the rest. There is no specific mention about the Overseas Contingency Fund.

I found this, also:

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and this:

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http://crfb.org/blogs/scales-tip-among-senate-gop-balanced-budget-amendment

So, it does indeed require an affirmative act of Congress to run deficits. I don't like all this 2/3rds and 3/5ths stuff. Look at how dysfunctional our government is right now with just the one 3/5ths cloture rule in the Senate!