An Amendment May Be the Only Cure for Addiction to Budget Deficits

Article excerpt

It becomes increasingly clear that the most interesting debate of the presidential campaign would have pitted Bill Clinton against Bill Clinton. Affirming once again that he will never settle for one position on an issue when he can have two, or three, the president at first said he might be able to go along with a balanced-budget amendment to the Constitution if it provided some flexibility during recessions. This seemed to be at least a partial reversal of his past rejection of such an amendment in any form, which itself was a reversal of his onetime endorsement of the idea.

By the next day, the administration was insisting it was still unalterably opposed, no matter what the president thinks. Treasury Secretary Robert Rubin warned that the measure would "create an inflexibility that can turn a downturn into a recession and a recession into a worse recession."

His fear is that the government would not be able to run a deficit even when it urgently needed to. Talk of devising an escape hatch was futile, he said. "I don't see how you can draft an escape hatch that will protect you against all contingencies." There is something charming about Rubin's fantasy that a relentlessly frugal Congress will refuse to let the budget go into deficit no matter what, stubbornly raising taxes and slashing spending even when the economy is in ruins. This is like worrying that Bruce Willis will henceforth refuse to make any movie not based on an Anthony Trollope novel. The reality is that in recent decades, our elected leaders have been pathetically eager to spend well beyond our means even during boom times. In the last 40 years, the federal budget has been balanced exactly three times. The last balanced budget was in 1969. During the expansion of 1982-89 and the current expansion, which began in 1991, the deficit has never dropped below $100 billion. Yet the secretary of the treasury has circles under his eyes from lying awake at night fretting that we'll develop an incorrigible habit of budgetary responsibility. In fact, we're addicted to getting more government than we pay for, year after year. Since 1981, we've added nearly $3 trillion to the federal debt - and, in the best-case scenario, it will take five years to bring spending and revenue into balance. We like government programs, but we hate paying for them. The habit feeds on itself: The more deficits we run, the more we have to pay in interest on the debt, and the harder it gets to eliminate the deficit. …