However, data showing that the economy is in recession do not become available until months after the economy has begun to weaken and recession has set in.It could take many months before sufficient data are available to convince a congressional supermajority to waive the balanced-budget requirement, if they ever would.
Social Security would effectively be prevented from drawing down its reserves from previous years to pay benefits in a later year and, instead, could be forced to cut benefits even if it had ample balances in its trust funds, as it does today.
The same would be true for Medicare Part A and for military retirement and civil service retirement programs.
If such an amendment had been ratified in 2011 and were being enforced for fiscal year 2012, “the effect on the economy would be catastrophic,” MA concluded, and would double the unemployment rate.
Most recent proposals to write a balanced budget requirement into the U. Constitution would allow Congress to waive the balanced budget stricture if a supermajority of both chambers voted to do so.
Nor could the Federal Deposit Insurance Corporation or the Pension Benefit Guaranty Corporation respond quickly to bank or pension fund failures by using its assets to pay deposit or pension insurance, unless it could do so without causing the budget to slip out of balance.
Proponents of a constitutional balanced budget amendment often argue that states and families must balance their budgets each year and the federal government should do the same. While states must balance their operating budgets, they can — and regularly do — borrow for capital projects such as roads, schools, and water treatment plants.Recently, though, additional states have called for such a convention, reflecting the efforts of a number of conservative advocacy organizations such as ALEC, which in 2011 released a handbook for state legislators that includes model state legislation calling for a constitutional convention.Since 2010, 12 states have adopted such resolutions.Congress might try to limit the Convention to one amendment or one issue, but there is no way to assure that the Convention would obey.After a Convention is convened, it will be too late to stop the Convention if we don’t like its agenda.By requiring a balanced budget every year, no matter the state of the economy, such an amendment would risk tipping weak economies into recession and making recessions longer and deeper, causing very large job losses.