Oppose the Balanced Budget Amendment (H.J. Res. 2)
The House is scheduled to vote on H.J. Res. 2, Proposing a balanced budget amendment to the Constitution of the United States, on Thursday, April 12.
This bill proposes a Balanced Budget Amendment (BBA) to the Constitution of the United States. While it does not directly cut Medicaid, Medicare, Social Security, or other programs, it is all but certain to result in massive cuts.
What is a Balanced Budget Amendment (BBA)?
A BBA would require that the federal government not spend more than it brings in in a given year. In other words, expenditures cannot exceed revenue in a fiscal year.
While this might sound reasonable on the surface, it is actually bad policy. BBA proponents say that the federal government, just like individuals, must have balanced budgets. But this is a false analogy because it would mean that individuals should not be able to borrow for things like home mortgages or student loans. The federal government also needs the flexibility to borrow sometimes to address critical priorities.
Why is a BBA Harmful?
It will result in cuts to Medicaid, Medicare, Social Security, and other large programs.
These programs are a large part of the federal budget and many members of Congress are seeking ways to cut them. Social Security and Medicare are particularly vulnerable because a BBA prohibits spending from exceeding revenues collected in that year. These programs operate with trust funds that collect dedicated payroll taxes that are partially paid out in future years.
It would harm the economy.
A BBA would likely cause significant harm to the economy, making recessions both deeper and longer. In an economic slowdown, revenues (mostly taxes) fall while spending for unemployment and other benefits increases. A BBA would force policymakers to cut federal programs, raise taxes, or both when the economy is weak or already in recession, the exact opposite of what most economists advise.
Oppose the Balanced Budget Amendment (H.J. Res. 2)
The House is scheduled to vote on H.J. Res. 2, Proposing a balanced budget amendment to the Constitution of the United States, on Thursday, April 12.
This bill proposes a Balanced Budget Amendment (BBA) to the Constitution of the United States. While it does not directly cut Medicaid, Medicare, Social Security, or other programs, it is all but certain to result in massive cuts.
What is a Balanced Budget Amendment (BBA)?
A BBA would require that the federal government not spend more than it brings in in a given year. In other words, expenditures cannot exceed revenue in a fiscal year.
While this might sound reasonable on the surface, it is actually bad policy. BBA proponents say that the federal government, just like individuals, must have balanced budgets. But this is a false analogy because it would mean that individuals should not be able to borrow for things like home mortgages or student loans. The federal government also needs the flexibility to borrow sometimes to address critical priorities.
Why is a BBA Harmful?
It will result in cuts to Medicaid, Medicare, Social Security, and other large programs.
These programs are a large part of the federal budget and many members of Congress are seeking ways to cut them. Social Security and Medicare are particularly vulnerable because a BBA prohibits spending from exceeding revenues collected in that year. These programs operate with trust funds that collect dedicated payroll taxes that are partially paid out in future years.
It would harm the economy.
A BBA would likely cause significant harm to the economy, making recessions both deeper and longer. In an economic slowdown, revenues (mostly taxes) fall while spending for unemployment and other benefits increases. A BBA would force policymakers to cut federal programs, raise taxes, or both when the economy is weak or already in recession, the exact opposite of what most economists advise.