AARP Opposes Constitutional Convention to Enact Balanced Budget Amendment

AARP Nebraska today issued the following statement in opposition to L.R. 6, which calls on the Nebraska Legislature to submit a request to Congress calling for a constitutional convention.

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“LR6 would serve as Nebraska’s application for a convention of states under the authority of Article V of the United States Constitution for proposing constitutional amendments.  While such a convention, according to Article V, “shall be valid to all Intents and Purposes,” a common reason given for seeking a convention is to enact a Balanced Budget Amendment.

AARP recognizes the fiscal challenges that face the federal government.  Restoring budget balance requires difficult choices among competing priorities, as well as efficient fiscal management. Over the long term, the federal government cannot continue on a path of large-scale deficit spending without jeopardizing the economic well-being of the United States.

The current outlook for large and continuing budget deficits has generated some support for a constitutional amendment to balance the federal budget.  Such an amendment would be ill-advised for a number of constitutional and economic reasons. To be enforceable, a constitutional amendment would necessarily shift the power to tax and spend from elected officials to an unelected judiciary. This would weaken the accountability of Congress and the president for fiscal decisions. And it could lead to a constitutional conflict between the courts on one side and Congress and the president on the other.

While supporters claim that a balanced-budget amendment would mirror the balanced-budget requirements found on the books in almost all states (except for Vermont), the analogy is superficial. The structure of state requirements differs from the structure in the proposals that Congress has considered. Roles of state and federal governments in managing the economy differ as well. States are not responsible for setting macroeconomic policy. In addition, “balance” as ostensibly required in most states does not automatically mean that current revenues equal current spending. In fact, states often run budget deficits—sometimes large ones.

A strict constitutional requirement for a balanced budget would limit the federal government’s ability to respond to changes in the economy and to national emergencies, such as the 2008 financial crisis. Compared to the states, the federal government needs more flexibility to conduct countercyclical economic policy. At the state level, the balanced-budget requirement often limits states’ ability to counteract the effects of economic slowdown and sometimes exacerbates such slowdowns.

We encourage the Government and Military Affairs Committee to indefinitely postpone LR 6.”