Sen. Dean Heller voices support for balanced-budget amendment

By Karoun Demirjian

Thursday, June 30, 2011 | 12:20 p.m.

How does the United States avoid a debt crisis? A group of Republicans are hawking this solution: Don’t rack up the debt in the first place.

Republicans in the Senate, led by Utah’s Orrin Hatch, are banding together to push the U.S. to adopt a balanced budget amendment, a recipe in many states to ensure that government outlays don’t outpace revenues, but a concept that’s never taken root at the federal level.

“Families and businesses across the country work within a budget,” Nevada Sen. Dean Heller said in a statement yesterday. “It is time the federal government did the same. Our government needs a Balanced Budget Amendment to force Washington to live within its means.”

The proposed measure would require Congress to balance the budget every fiscal year, meaning lawmakers could only appropriate as many dollars spending as the government takes in in revenue -- no runaway borrowing, except in emergency circumstances.

But the bill actually goes a step further, prohibiting Congress from spending any more than 18 percent of GDP in any given year, no matter how much money the government is taking in from taxpayers and other sources -- a caveat that, long-term, either encourages the United States to try to build surpluses, or keep taxes from rising collectively above 18 percent of GDP.

But in the short-term, it also encourages a more ascetic approach to spending than has yet been discussed in the mainstream Republican proposals.

The most recent fiscal 2012 budget Republicans have rallied around was a proposal from Wisconsin Rep. Paul Ryan, which aimed to slice $4 trillion from the budget over the next decade. But the projections of that bill still estimated that spending would hover around 20 percent of GDP, assuming projected tax levels: too much spending under Hatch’s balanced budget scenario.

Hatch guessed Wednesday that he would have the full support of Senate Republicans for his amendment, but it’s unlikely to take enough root with the Democrats to get the two-thirds majority needed to make a constitutional change. If it does pass, it would need to get the green light from the states: 38 states would need to approve the measure for it to pass (assuming all state Republican legislatures would approve such a proposal, only 13 states with Democratic legislatures would be needed to reach that goal).

Last night, Senate Minority Leader Mitch McConnell fast-tracked the bill to the Senate calendar, which means it could be brought up at any time -- though that decision is still up to Senate Majority Leader Harry Reid, who hasn’t been too keen on the idea.

Still, balanced budget mandates are not a surefire recipe to avoid accruing debt. Take Nevada’s example: the Silver State has a constitutional requirement to balance the budget, but that didn’t stop the state from falling into a giant fiscal sinkhole this year.

There are always ways to circumvent the rules in an emergency, and Hatch’s bill lays those out: a two-thirds vote of Congress at any time, and during a war or acute national security crisis when emergency defense spending might be necessary.