OPINION

Cansino, Couchman: Arrington proposes a next-generation budget amendment

JANE CANSINO & KURT COUCHMAN

Total federal debt has grown by 50 percent since the 2016 elections, when Rep Jodey Arrington was first elected to Congress. In less than six years, it has grown from $19.8 trillion to more than $30 trillion (about $92,000 per person in the US).

The Government Accountability Office (GAO) is worried. In a new report, Congress’ independent watchdog explains that too much debt increases interest rates and makes us poorer. It risks a financial crisis that could make 2008 look mild, and it undermines our national security. It makes politics nastier and legislating harder, as interest on the debt eats more of the budget.

We need solutions. GAO calls for Congress to “incorporate well-designed fiscal rules and targets,” among other fixes.

Fortunately, Congressman Arrington and Senator Mike Braun (R-Indiana) recently introduced one of the smartest, best-written proposals for a balanced budget amendment (BBA) to the Constitution. As their colleagues learn about it and as the American people demand debt controls, this BBA should attract broad, bipartisan support. When the time is right, it could become the 28th Amendment to the Constitution.

Rep. Arrington has led on responsible budgeting since joining Congress in January 2017. In his first term, he served on the Budget Committee and the Joint Select Committee on Budget and Appropriations Process Reform. Last Congress he joined the House Ways and Means Committee, which oversees the tax laws and many major spending programs. With Rep. Scott Peters (D-California), he has organized bipartisan efforts to fix the budget and control the debt.

The pandemic and unified Democratic control of Congress and the White House seem to have pushed budget reform to the back burner. Congress approved nearly $6 trillion in pandemic response. Total federal debt far exceeds America’s annual economic output and will keep growing — until something breaks — unless Congress changes course.

Yet progressive overreach, the COVID-19 crisis waning, escalating debt, and looming insolvency in Social Security and Medicare are generating support for a course correction. As the political winds change, the energy to restore federal solvency could rival the Tea Party in 2011.

This time, members like Rep. Arrington will be ready with thoughtful solutions that can pass. An earlier version of his new Business Cycle Balanced Budget Amendment (BCBBA) once attracted the support of 46 House Republicans and 14 House Democrats, including Texans of both parties, conservatives, moderates, and even progressives.

The heart of the BCBBA is balance over the business cycle instead of every year. It would limit spending to a rolling average of revenue from the three prior years, adjusted for inflation and population.

This lets spending and revenue policies be much more stable and predictable than under annual balance. It promotes policy stability by allowing deficits during recessions that are more than balanced by surpluses during the good years. This countercyclical approach avoids spending cuts — or tax hikes — during recessions when more people draw on safety net programs and the economy is weak.

Nearly all economists prefer structural balance to annual balance. Other countries already do it, and state legislators are considering upgrades like that for their budget rules.

The BCBBA makes sure Congress can deal with emergencies. It requires two-thirds of both houses — the standard supermajority in the Constitution — to declare an emergency and spend what is needed. Emergency spending would be repaid as soon as possible but need not be right away.

Finally, it sets out a 10-year glide path to balance after three-fourths of state legislatures ratify the amendment. The budget is so out of whack that it will take that long to get back on track.

Like any constitutional provision, it would need implementing legislation to fill in the details. Enforcement is most crucial. This law could choose whether to seek full balance or primary balance, which means that revenue would cover current spending but not interest on the debt. Or primary balance could be an initial goal with full balance to come later. Primary balance still controls the debt burden but is easier to reach.

These are smart approaches to the balance rule, the safety valve for emergencies, and the transition to balance. In addition, the BCBBA does not have the errors that are common in other BBA proposals.

It’s an impressive budget amendment. A member with strong relationships on and respect from both sides of the aisle could shepherd something like it through the process.

When the next opening happens, Rep. Arrington, Sen. Braun, and their allies will be ready to take the next steps toward controlling the debt, fixing federal budgeting, and providing greater prosperity and opportunity for all.

Jane Cansino is grassroots engagement director at Americans for Prosperity-Texas. Kurt Couchman is senior fellow in fiscal policy at Americans for Prosperity.