Our elected officials in Washington congratulate themselves for avoiding a government shutdown and argue about which non-budgetary legislation to tack onto “must-pass” short term spending bills while we limp from month to month with no long range financial plan .  This column is my attempt to persuade readers of all political stripes that we should pass a constitutional amendment requiring a balanced budget – not because I like the idea but because nothing else seems to work.

First, a dose of reality – Social Security is not the problem.  In 66 of its 77 years Social Security has brought in more money than it spent. That includes the most recent 34 consecutive years.  Because we are living longer and have the large baby-boom generation retiring, Social Security will need some combination of delayed retirement, increased taxes, and reduced benefits; but if congress will act soon, the changes will not be massive.

The real problems are in other areas of the budget.  Our deficit for 2015 was $439 billion despite a $19 billion surplus by Social Security.  Historical data from the US Office of Management and Budget show only two recent balanced budgets: 1999 and 2000 (President Bill Clinton’s last two years).  Prior to that it was 1960, the last year of President Eisenhower’s term.  We have had budget deficits for 53 of the last 55 years and our Congress seems more interested in cutting taxes and increasing spending than in balancing budgets.

Federal spending prior to WWII was typically 10% or less of the value of all the goods and services produced in the nation (GDP).  Since then the US has emerged as a world military power and has developed our social safety net.  As a result, Federal spending has been about 17-20% of GDP since 1975.    Data from the Federal Reserve Bank demonstrate that our serious debt problems emerged in the early 1980s when the Reagan Administration began cutting taxes for corporations and the wealthy without cutting spending.  Historical data from the Office of Management and Budget show that deficits became consistently large around the same time.  Total tax collections have actually remained fairly stable at 17-19% of GDP but the corporate share has been cut in half and capital gains taxes have been reduced while payroll taxes increased.

That is the background information.  Here are some ideas for a constitutional amendment:

1. Congress is required to pass a budget and establish taxes to fund the budget for periods of time that are not less than one year.  The budget and taxes must be passed and sent to the President at least three months prior to the effective date.
2. If the congress fails to pass a budget on time there will be a new election 90 days later to replace the entire congress.  The prior year’s budget and taxes will be automatically extended for one year or until they are changed by the new congress.
3. The debt of the nation is limited to the sum of values of trust funds established by the congress (Social Security for example).
4. The requirement to balance each budget may be waived during a state of emergency declared by a 60 percent majority of both houses of Congress.  The declaration is valid for not more than one year but can be renewed as many times as the Congress thinks necessary.
5. At any time when there is no declared state of emergency, 2% of non-trust fund tax revenues will be set aside for reduction of excess debt.

The amendment will:

1. Force the Congress to do its job.
2. Protect Social Security and other trust funds that provide pre-paid benefits.
3. Allow enough flexibility to deal with genuine emergencies and wars.
4. Gradually pay down existing debt.

The amendment would force serious debate about priorities.  We will be less likely to go to war if we have to raise taxes for it.  There will be more pressure to eliminate wasteful spending and tax loopholes.  There will be pressure to raise taxes for infrastructure, research, and human services.

I was taught in high school that “Economics is the science of meeting unlimited human wants with the limited resources available.”  A balanced budget amendment will require our government to help us do exactly that.