Sunday, November 20, 2011

House rejects balanced budget proposal (AP)

WASHINGTON ? The House has rejected a proposed constitutional amendment that would have forced Congress to balance its budget every year as a way to reverse years of deficit spending.

A majority of House members supported the balanced budget measure, but supporters fell short of achieving the two-thirds majority needed to amend the Constitution.

Republicans who backed the amendment said it was the only way to get Congress to put its fiscal house in order. Democratic critics said a balanced budget requirement would result in drastic cuts in Medicare and other social programs when economic downturns put the budget out of balance.

It was the first House vote on a balanced budget amendment since 1995, when the House approved it but the bill fell one vote short in the Senate.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

Frustrated by their own failure to halt mounting federal red ink, lawmakers are voting on a balanced budget amendment to the Constitution that would force Congress to hold the fiscal line.

The first House vote on a balanced budget amendment in 16 years comes as the separate bipartisan supercommittee appears to be sputtering in its attempt to find at least $1.2 trillion in deficit reduction over the next decade.

With the national debt now topping $15 trillion and the deficit for the just-ended fiscal year passing $1 trillion, supporters of the amendment declared it the only way to stop out-of-control spending. The government now must borrow 36 cents for every dollar it spends.

"It is our last line of defense against Congress' unending desire to overspend and overtax," Judiciary Committee Chairman Lamar Smith, R-Texas, said as the House debated the measure.

But Democratic leaders have aggressively worked to defeat the measure, saying that such a requirement could cause devastating cuts to social programs during economic downturns and that disputes over what to cut could result in Congress ceding its power of the purse to the courts.

Even if it passes the House, it faces an uphill fight in the Democratic-controlled Senate.

The Democratic argument was joined by 16-term congressman David Dreier of California, who broke ranks with his fellow Republicans to speak against the measure. The Rules Committee chairman said lawmakers should be able to find common ground on deficit reduction without changing the Constitution, and he expressed concern that lawsuits filed when Congress fails to balance the budget could result in courts making decisions on cutting spending or raising taxes.

The House passed a similar measure in 1995, with the help of 72 Democrats, but Democratic opposition this time may make it more difficult to reach the needed two-thirds majority for a constitutional amendment. In 1995, the measure fell one vote short of passing the Senate.

If approved by both houses, amendments still must also be ratified by three-fourths of the states. The last constitutional amendment ratified, in 1992, concerned lawmaker pay increases.

The second-ranking Democrat, Steny Hoyer of Maryland, voted for the amendment in 1995 but said the situation has vastly changed since then. "Republicans have been fiscally reckless," he asserted, saying the George W. Bush administration would not cut spending elsewhere to pay for the wars in Iraq and Afghanistan, major tax cuts and a Medicare prescription drug benefit.

"A constitutional amendment is not a path to a balanced budget," said Rep. Lloyd Doggett, D-Texas. "It is only an excuse for members of this body failing to cast votes to achieve one."

Dreier is not expected to be the only Republican to defect. Conservatives in the party had pressed for a tougher version that would have also set tight caps on annual spending and required a supermajority to raise taxes.

The measure on the floor Friday, sponsored by Rep. Robert Goodlatte, R-Va., mirrors the 1995 resolution in stating that federal spending cannot exceed revenues in any one year. It would require a three-fifths majority to raise the debt ceiling or waive the balanced budget requirement in any year. Congress would be able to let the budget go into deficit with a simple majority if there was a serious military conflict.

The Republicans' hope was that the Goodlatte version would attract more Democratic supporters, and the "Blue Dogs," a group of fiscally conservative Democrats, said they were on board. But there are now only 25 Blue Dogs, half the number of several years ago when there were more moderate Democrats, mainly from rural areas, in the House.

Rep. Peter DeFazio, an Oregon Democrat who is not a Blue Dog member, said he was supporting the amendment because "there's an infinite capacity in this Congress to kick the can down the road. ... We are going to have to force people to make tough decisions."

But other Democrats pointed to a letter from some 275 labor and other mostly liberal groups saying that forcing spending cuts or higher taxes to balance the budget when the economy was slow "would risk tipping a faltering economy into recession or worsening an ongoing downturn, costing large numbers of jobs."

Democrats also cited a report by the liberal Center on Budget and Policy Priorities estimating that, if there is not an increase in revenues, the amendment could force Congress to cut all programs by an average of 17.3 percent by 2018.

The amendment would not go into effect until 2017, or two years after it was ratified, and supporters say that would give Congress time to avoid dramatic spending cuts.

Forty-nine states have some sort of balanced budget requirement, although opponents note that states do not have national security and defense costs. States also can still borrow for their capital-spending budgets for long-term infrastructure projects.

The federal government has balanced its budget only six times in the past half-century, four times during the Clinton presidency.

Source: http://us.rd.yahoo.com/dailynews/rss/uscongress/*http%3A//news.yahoo.com/s/ap/20111118/ap_on_go_co/us_balanced_budget_amendment

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