Budget Amendment An Overreaction

As the cliche goes, the balancedbudget amendment is “a bad idea whose time has come.” The reality is: It’s a bad idea whose time has gone. If the Senate approves it, as appears likely, and sends it to the states for ratification, it will be a classic case of locking the barn door after the horse has been stolen.

The red-ink hemorrhage this constitutional amendment is supposed to stop is not a chronic condition. It is largely a phenomenon of the 1980s, which has washed over a bit into the 1990s. But it is a dubious proposition to rewrite the permanent charter of government to correct for the follies of one decade.

Here are the relevant facts. In 1940, as the Great Depression came to an end, the gross federal debt was 53 percent the size of the economy. During World War II, it exploded to 127 percent the size of the economy, but by 1949, it was down to 96 percent of the economy’s size.

In the 1950s, it declined steadily to 60 percent the size of the economy; in the 1960s, to 39 percent; and in the 1970s, to 34 percent. That was the record over 40 years and eight presidents, with Congresses led by both parties, a period that included three wars and numerous recessions. Not a bad show.

Then - whoosh! Between 1980 and 1989, the ratio of the debt to the economy exploded from 34 percent up to 55 percent in a period of peace and general prosperity. The explosion carried over into the first five years of the 1990s, reaching 70 percent last year. Between now and the end of the decade, it is expected to grow only to 73 percent.

That is not good enough. As readers of this column know, I have faulted President Clinton for virtually abandoning the battle for serious deficit reduction after two years of effective work. But the built-in accelerators are not so great that a serious effort by the Republican Congress could not at least stabilize that ratio.

If Republicans are as committed to reducing the scope of government as they claim, the next two years should see the ratio start down - without tampering with the Constitution.

The ratio is probably more important than the absolute size of the debt. When the economy is growing faster than the debt, the revenues it generates make it easier for government to finance the annual interest payments, without usurping sums from other needs. But when the ratio explodes, as it did during the 1980s and the first half of the 1990s, current needs are squeezed and future generations are cheated.

The wind is clearly in the sails of those who would add this untested notion to the basic charter of government. It went through the House last month by a 300-132 margin, and is within a vote or two of the needed two-thirds majority in the Senate.

One of the latest to climb aboard the bandwagon, Sen. Tom Harkin (D-Iowa), has evolved an elaborate rationale for doing what is currently popular - voting yes. In an interview last week, he told me the Republicans are secretly praying that it fails by one vote, so they can campaign in 1996 against every Democratic senator who votes no. In the 1994 election, they pummelled every Democrat in the House and Senate who voted for the squeaker passage of Clinton’s budget, which brought the first serious deficit reduction in years, so there is no reason to suppose they would not do it again.

Harkin’s second rationale is that, if it goes to the states, the 30 Republican governors will have to take the heat for urging their legislatures to approve an amendment that could cost them millions of dollars of federal aid - and either force up state and local taxes or bring severe program cuts. Fear of those consequences would probably keep it from being approved by the necessary 38 legislatures, he said.

But if it should be ratified, Harkin argued, Congress will inevitably respond by creating a separate capital expenditure budget, outside the balanced-budget amendment limits, to finance spending on roads and bridges and the like. States and localities do this all the time - which is why they have substantial debts, despite nominally operating under a requirement to balance their budgets. It would be an evasion of the intent of the constitutional amendment, but since a separate “capital budget” is something Harkin favors, that prospect is anything but unnerving to him.

By this elaborate reasoning does a liberal Democrat come to the conclusion that there is no harm in doing what suits his convenience as he faces a 1996 re-election campaign. But is that any basis on which to rewrite the Constitution of the United States? David Broder is a columnist for The Washington Post.