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Strange Brew: Senator Mike Lee’s Misguided Balanced Budget Amendment

July 5, 2011

Senator Mike Lee --  the Tea Party’s favorite son on the Senate Judiciary Committee --  has proposed a Balanced Budget Amendment to the U.S. Constitution which, if ratified, would require a supermajority of two-thirds of both the House and the Senate to raise taxes or spend in excess of revenue raised in a particular year.   Indeed, under a so-called “cut, cap, and balance” pledge, promoted by Lee and his Tea Party allies, the proposed Amendment would have to be passed by the House and Senate before the U.S. debt limit could be raised.  This pledge holds the full faith and credit of the United States of America hostage to a misguided effort to dramatically change the Constitution.  What Lee is not telling America is that his proposed Amendment represents a stark departure from our constitutional order.

By imposing rigid and arbitrary limits on Congress’s power to borrow and tax, Lee’s proposed constitutional Amendment loses sight of the founding generation’s vision of an agile, responsive, and effective federal government with broad powers to protect national security and solve national problems.  Out of sync with the Founders he purports to revere, Lee’s Amendment would tie Congress’ hands and disable our national government from properly responding to serious national problems.

It is no accident that the first two enumerated powers that Article I, Section 8 of the Constitution vests in Congress -- even before the commerce power -- are “[t]o lay and collect Taxes . . . to pay the Debts and provide for the common Defense and general Welfare of the United States” and “[t]o borrow money on the credit of the United States.”  As Justice William Story wrote in his commentaries on the Constitution, these powers are “inseparably connected,” bound up together “with the duty of protection [incumbent] upon the general government” -- a responsibility that the Articles of Confederation had failed to meet.

The Constitution’s broad textual grant of power was a direct response to the Articles’ crippling restrictions on Congress’s power to borrow and tax. This inability plagued the revolutionary war effort from the outset.  As Story notes and the Founders’ war-time experience confirmed, “expenses of one year, in time of war, may more than equal the ordinary revenue of ten years. Hence, a debt is almost unavoidable.” But the government of the Articles fell short. As General George Washington wrote to Alexander Hamilton in 1783, without these broad powers of general government, particularly to fund the needs of the army, “the blood we have spilt, in the course of an eight years' war, will avail us nothing.”

Although Congress under the Articles could nominally borrow money to serve the common good, it was entirely reliant on the states to finance these efforts. Congress could not borrow or appropriate funds (or even ascertain the amount that would be necessary!) without nine votes from the states -- a two-thirds supermajority. Because states would not pay up on their own, centralized revenue became necessary, but revenue-raising measures had to pass the even higher threshold of unanimity. Indeed, as Professor Akhil Amar writes, New York’s veto of the revenue plan to pay the war debts in 1786 was “the last straw, confirming the imbecility of the Confederation and the practical impossibility of reforming the Articles from within.” In response to the failure of the Articles, our Constitution “form[s] a more perfect Union,” predicated upon the promise of effective government, including the express powers to borrow and tax for the general welfare.

The crises that require debt are as wide-ranging and unpredictable as they are urgent, and they often extend beyond the circumstances of war. As Story wrote, “[e]ven in times of peace exigencies may occur, which render a loan the most facile, economical, and ready means of supply, either to meet expenses, or to avert calamities, or to save the country from an undue depression of its staple productions.” These crises and opportunities loom large in the history of our nation. We contracted debt to complete the Louisiana Purchase, to preserve the Union during the Civil War, and to weather the Great Depression and World Wars of the Twentieth Century. As early as the first year of our new constitutional government, Hamilton’s plan to assume state war debts was essential to reassure the nation’s creditors and avoid burdensome, anticompetitive state revenue measures. Public debt, as Hamilton proudly declared in his first Report on the Public Credit, is and was “the price of liberty.” Our first and greatest Secretary of the Treasury reminded us that, so long as the debt would be repaid over time, the urgent need that it fulfilled “will render it a national blessing.” The inflexibility of Senator Lee’s proposed Amendment presumes that price is rarely worth paying, but such a notion would be foreign to the Founders as well as to the generations of Americans since then who have depended on the federal government’s broad constitutional powers.

Nor were the Founders hostile to taxation.  Instead, they insisted -- true to the slogan that inspired the revolution -- that taxation be linked to representation. Taxes were no longer a painfully exacted tribute paid to a remote and indifferent monarch. They were the necessary fuel for the bold American experiment of self-government.  One-hundred-twenty-five years after the framing, “We the People” reaffirmed this fundamental idea with the ratification of the Sixteenth Amendment, providing express constitutional authority to Congress to “lay and collect taxes on incomes.”

Lee’s proposal not only ignores views of the founding generation and subsequent judgments of “We the People” toward debt and taxation, it also calls for a reckless departure from the Founders’ carefully calibrated system of government. Majority rule is the default rule for our democratic Constitution. As Thomas Jefferson wrote, majority rule “is the natural law of every assembly of men, whose numbers are not fixed by any other law.” The Constitution specifies certain departures from this default rule, but each exception warrants a particular justification that is consistent with the Constitution’s democratic structure. In contrast, Lee’s proposed Amendment would require a two-thirds supermajority –- the highest threshold for congressional action in the Constitution -- for Congress to increase the debt ceiling, raise taxes, or spend more than the revenues it brings in. Nowhere does our Constitution today limit  the grant of a substantive enumerated congressional power with the leaden weight of a supermajority requirement. Lee’s proposed Amendment would enfeeble the government by binding its hands, a motivation the Founders rejected in light of their negative experience with the Articles of Confederation.

Lee’s Amendment would also impose an inflexible and arbitrary spending limit of 18% of GDP. This awkward figure stands out in a Constitution filled with broadly framed principles of governance. Contrary to Chief Justice Marshall’s warning in the landmark decision of McCulloch v. Maryland (1819), it “partake[s] of the prolixity of a legal code,” dissonant with a document that is designed to “to endure for ages to come, . . . to be adapted to the various crises of human affairs.” Our greatest Chief Justice reminded us to “never forget that it is a constitution we are expounding” when we interpret the document’s text, history, and structure. We face an even higher duty when amending the Constitution’s text, to match the Framers’ maturity and foresight. Senator Lee’s proposed Amendment fails this test.

America faces a significant challenge in grappling with its long-term debt, but our Constitution is adequate to that task. The founding generation might be surprised at our current and projected absolute debt levels. But they well understood that the price of debt is sometimes worth paying, that taxation is essential to the public credit, and that fiscal policy should be decided by the democratic process of majority rule.  Senator Mike Lee’s proposed Amendment flies in the face of these lessons, and our Constitution’s history.

While campaigning for office, Mike Lee “pledged” that he would “not vote for a single bill that I can't justify by the text and original understanding of the Constitution."  Now in office, he is pressing for an Amendment to the Constitution that would turn the Framers’ understanding of the way to structure republican government on its head.  Worse, with the “cut, cap, and balance” pledge, Senator Lee seeks to force this Amendment down the throat of Congress, with the full faith and credit of the United States of America hanging in the balance.

Senator Lee fancies himself a friend to the Constitution.  But ratification of his proposed Amendment would prevent Congress from taking effective action to carry out its constitutional responsibilities and would thus represent an enormous constitutional step backwards.   While Senator Lee will surely defend his proposed Amendment with the argument that the debt crisis we face is so serious that we need drastic change, America has faced economic crises before and never found it necessary to shred the Constitution to overcome them. With friends like Mike Lee, the Constitution needs no enemies.