Last week, the House voted on a dangerous Balanced Budget Amendment (BBA) to the U.S. Constitution. The BBA would require a balanced budget every year, even during recessions, and would limit spending to revenues collected in that year. Thankfully, the 233-184 vote was insufficient to meet the two-thirds requirement for a constitutional amendment vote. Because Senate Majority Leader McConnell said he is open to hold a BBA in the Senate, let’s highlight some of the reasons why a BBA is a bad deal for women.
- Vital programs for women and families are already at risk for cuts because of the $1.9 trillion in tax cuts favoring millionaires, billionaires, and big corporations—and the BBA would lead to even more drastic program cuts. The Congressional Budget Office (CBO) now projects that the tax law that Republicans in Congress and the President enacted last December will add $1.9 trillion to the deficit by 2028. The deficit did not bother Republicans when it came to tax cuts for the rich, but it suddenly matters now, as a justification for slashing investments in vital programs for women and families who are struggling to make ends meet. (Just a little hypocritical?) To pay for these tax cuts for the rich and big corporations, the President and Republicans in the House are seeking to make draconian cuts to nutrition assistance in the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps). The latest Trump Budget also proposed drastic cuts in other programs like Medicaid, the Temporary Assistance for Needy Families (TANF) program, the Low Income Home Energy Assistance Program, education, infrastructure development, housing assistance, the Social Security Disability Insurance (SSDI) program, and more. The proposed BBA would force even deeper cuts to these and other vital programs, threatening the health and economic security of millions of women and families.
- The BBA would undercut the existing structure of Social Security, Medicare, and other retirement funds. Workers make contributions to programs like Social Security, military and civil service retirement systems, and Medicare, and these contributions are used to pay benefits and administrative costs, now and in the future. Surplus funds are intentionally kept separate from the rest of the federal budget, to be kept in trust to pay future benefits. The proposed BBA would limit spending to revenues received in that year, including for programs like Social Security and Medicare. So, for example, the $2.9 trillion in the Social Security Trust Fund collected through previous years could not be used to pay benefits to current Social Security beneficiaries (and 55 percent of adult beneficiaries are women). Enacting the BBA would be a terrible way to celebrate National Social Security Month this month.
- The BBA would weaken the economy. Requiring a balanced budget every year would force program cuts and/or tax increases, even when the economy is weak or in a recession. Economists recommend the exact opposite—larger investments in programs like unemployment insurance and Medicaid plus lowering taxes to soften the impact of a weak economy. Even states with a balanced budget requirement have Rainy Day funds that they can use in future fiscal years when they face an economic downturn or budget shortfall, but the BBA would not permit such rainy day funds. Forcing a balanced budget every year would create a spiraling effect in which weak economies turn into recessions, and recessions last longer. We cannot afford this kind of uncertainty.
- Many BBA proposals would require two-thirds of the House and Senate to approve tax increases. Senator Hatch’s J. Res. 24 and other BBA proposals would require a super-majority to increase taxes. Republicans in Congress just passed $1.9 trillion in tax cuts favoring the rich and big corporations, drastically reducing revenue needed to fund vital programs for women and families. Requiring a super-majority to increase taxes in order to increase revenue available for these programs would be virtually impossible. So what would happen if Congress could not increase revenues? You guessed it—more program cuts.
A BBA was a bad deal for women in 2011, and this version is a bad deal for women as well. Thankfully, the House failed to muster two-thirds to pass the BBA. But it could get worse, if the Senate decides to take it up later this year. Instead of focusing energy on even more proposals to cut vital programs for women and families, Congress should undo the harm it did by adding $1.9 trillion to the federal deficit with the exorbitant Trump tax cuts and instead expand on the latest spending deal by investing in programs that improve the health and economic security of women and their families.