Clinton Backs Off Amendment

A day after President Clinton appeared to open the door to a constitutional amendment requiring a balanced federal budget, his Treasury secretary, Robert Rubin, slammed it shut again Wednesday, declaring that the administration would “actively oppose” the adoption of any such amendment.

In an interview, Rubin dismissed a possibility that Clinton held out Tuesday: that the amendment could be written with an escape hatch that “gives the country what it needs to manage a recession.” Rubin said any balanced-budget amendment would be “a dangerous thing to do,” because “you can’t protect against the unforeseen.”

The Treasury secretary’s remarks, apparently cleared by the White House, appear to contradict Clinton’s comments Tuesday that a balanced-budget amendment was likely to be approved in 1997 by a more conservative Senate, where the measure failed by only one vote last year.

But Wednesday the president’s economic team, apparently fearful that those comments would prompt Democrats who had opposed the amendment to switch their votes, began taking back Clinton’s remarks.

“The bottom line,” said Rubin, is that Clinton “is opposed to a balanced-budget amendment, and remains so.”

Economists who argue against the balanced-budget amendment maintain that it would hamstring Congress or the executive branch in times of economic downturn, since deficit spending has customarily been a way of spurring a laggard economy.

A constitutional amendment must win a two-thirds vote in each chamber of Congress and be ratified by three-fourths of the state legislatures to become law. The president can take part in the debate, but his signature is not needed.

Beginning in 2002, the amendment would require the president to submit an annual budget in which spending equals anticipated tax collections. Congress could change details, but not the bottom line. The balanced-budget requirement could be waived in time of war, but borrowing money in peacetime would require a three-fifths vote in each chamber of Congress.

Here are some of the main issues to consider in the debate:

Moral Authority

Proponents of the amendment say it will take the power of the Constitution to force presidents and lawmakers to face up to the hard choices involved.

“It’s not an impossible job, but politically it’s a very unpleasant job,” said Martha Phillips, executive director of the anti-deficit Concord Coalition. “Without the amendment to force their hand last year, they were able to walk away from the table.”

The enemy is us

Opponents of the amendment say it’s completely unnecessary. Congress and the president already have full constitutional power to balance the budget, or even run a surplus. The enemy of a balanced budget is every politician’s aversion to offending constituencies.

Economic straitjacket?

Clinton says one of his chief concerns is that the amendment lacks an escape clause to deal with recessions. When the economy slides, tax revenues decline while spending on social programs rises. The result is usually a higher deficit.

Proponents of the amendment say the escape clause is there: Congress can borrow money by a three-fifths vote in each chamber. “In the middle of a recession, that’s typically no problem,” said economist William Niskanen, head of the libertarian Cato Institute. Critics aren’t convinced.

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