Liberals are trying to kill the prospect of a Balanced Budget Amendment (BBA) in the ongoing battle over the debt ceiling. Some on the Right respond that they might settle for a “clean” BBA. But there are two types of a clean BBA, one of which would be even worse than the terrible mess we have today.
Some advocate that the BBA should require only that federal outlays cannot exceed federal tax revenues. They see it as two numbers, where the former must be less than the latter.
But this misses one critical point. If BBA only requires government to spend less than it collects, there are two ways to fix it. The first is cutting spending, and the second is raising taxes.
Many supporters of a clean BBA are not too worried. Although acknowledging the risk, they’re willing to take it on the grounds that they can use the prospect of electoral defeat to exert political pressure on members of Congress to ensure they don’t vote for tax increases.
But what about the courts? What if a judge orders a tax increase?
A judge could, if the BBA only says that spending must be less than revenues.
Courts currently lack the power to make changes to taxes or spending. Article I and the Sixteenth Amendment of the Constitution only authorize four types of taxes–excises, imposts, capitation taxes, and income taxes–and specifies that Congress is the branch with power to levy these taxes.
The Framers specifically wanted fiscal control in the hands of elected legislators. “No taxation without representation!” was the battle cry that helped precipitate the American Revolution.
So three fiscal levers are exclusively in Congress’ hands: Only Congress can tax, spend, or borrow. Congress’ control over the purse strings gives legislators leverage over the other branches. And the members of one congressional chamber–the House of Representatives–must stand before the people every other year, ensuring that those with taxing and spending power would be strictly accountable to the voters.
But a “clean” BBA would change that. It would create a constitutional command. A private party with standing could ask a federal judge to remedy a violation of a clean BBA by ordering increases in taxes to close budgetary gaps, instead of spending cuts.
Advocates of a clean BBA point out that with every provision in a BBA, it becomes harder to find the votes for a two-thirds supermajority needed to vote the BBA out of Congress and propose it to the states, where it would very likely be ratified in short order.
Each of the provisions in the BBA currently proposed in Congress is there for a reason. The best version is Senate Joint Resolution 10, the Hatch-Lee version, which has eleven sections. We explain its design in our book Resurgent: How Constitutional Conservatism Can Save America.
Section 8 of the BBA in S.J.R. 10 specifies that no federal or state court can order a revenue increase under this amendment. In other words, it leaves open the possibility that political gridlock between the elected branches might result in a court cutting federal spending, but never hiking taxes.
This is critically important. Federal judges hold their offices for life to insulate them from politics so that they can faithfully uphold the Constitution and laws, even when extremely unpopular. This is especially vital when public outcry pushes Congress and the president to do something unconstitutional, leaving judges free to strike it down.
But to grant judges the power to raise taxes would be antithetical to the constitutional design of political accountability for taxes. It would create a perverse incentive for members of Congress who wanted to raise taxes but were politically vulnerable to foster gridlock on spending battles, then let the courts do their dirty work for them by increasing taxes to make up the shortfall.
So the bottom line is that the only type of “clean” BBA that should even be considered is a second variety. In addition to specifying that revenues must exceed spending, it must also retain the current Section 8 that no judge has power to raise taxes.
America’s problem is our debt, not our debt ceiling. We desperately need a BBA to tackle our debt. But a BBA that allows judges to hike taxes would be even worse than the status quo.
Given how horrible the status quo is, that’s quite a statement.