By Dallin Overstreet


Balanced budget legislation along with uneasiness about the national debt has a long history in the United States and across the globe. In the U.S., opposition to debt spending and government borrowing began just years after the creation of our government.

Thomas Jefferson fought with Alexander Hamilton for years over the creation of a national bank and allowing the national government to assume the states’ debts. In 1798 he said, “I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government; I mean an additional article taking from the Federal Government the power of borrowing….” (Thaler, 1985). Since then, numerous presidents and legislators have fought to ease government spending and reduce annual deficits.maxresdefault

The majority of the balanced budget bills introduced in Congress have forced the federal government to cut spending and literally balance their budgets immediately while others allowed several years to meet the requirement. While some have specified that the government had to cut spending, others allowed the possibility of raising taxes to increase revenues in order to cover the deficits in order to ease the growth of the national debt. The latest version of the bill required Congress to pass a balanced budget or risk reducing their yearly salary to $1.

Many balanced budget bills have been brought to the floor in Congress over the years. In 1935, the first balanced budget legislation was introduced in Congress by Millard Tydings. This law would have forced Congress to set a balanced budget every year unless the debt ceiling was raised. After this initial bill, various similar bills were introduced in Congress but never were voted on. However, in 1982 the first balanced budget proposal passed through the Senate, but failed to pass through the House of Representatives with a two/thirds majority vote. In both 1995 and 1997 a balanced budget proposal came within one vote in the Senate of being adopted as law. Yet again in 2011 a balanced budget legislation was proposed in Congress, but it failed as well to pass either chamber of Congress (Countable, 2018).

Six years then passed before Senator Daines proposed the most recent version of a balanced budget law, but this law was never voted on in either chamber of Congress (Congress, 2018).

Arguments For and Against:

Generally, Republicans have been more in favor of balanced budget acts more than Democrats. With respect to the most recent attempt by Senator Daines to pass the Balanced Budget and Accountability Act, the same held true.


Many interest groupcaptures have come out against such an act, like the Center on Budget and Policy Priorities. Many Democrats and others who are against the bill argued that restricting the Federal government’s ability to borrow and spend in times of economic hardship or war would do a great deal of harm to the economy.

The Center on Budget and Policy Priorities, a liberal leaning think tank, said, “The amendment would force policy makers to cut federal programs, raise taxes, or both when the economy is weak or already in recession — the exact opposite of what good economic policy would advise (CBPP, 2018).” The Federal government would no longer be able to use deficit spending to spur on economic growth through programs like Unemployment Insurance.

These counter-cyclical programs are designed to put money in the hands of individuals that have been adversely affected by a recession. By giving these people money, the government hopes that they will go out and spend that money on things they need. This will artificially inject money into a floundering economy and hopefully fight the recession head on.



Proponents of the BBA and other balanced budget bills have brought attention to theever-growing national debt. Currently, the national debt totals to about $21.9 trillion (USDebtClock. 2018). Many interest groups have come out in support of the act, including  Council for Citizens Against Government Waste.

These groups and other individuals believe that such a large national debt is hurting our economy. Rather than the government spending tax dollars on useful services and goods, they are being forced to pay large sums of money just on interest. If the debt were to be handled now, future generations would not have to deal with having to pay massive amounts of money in interest.

A study done on a variation of a Balanced Budget act found that “the long run reduction in the debt/GDP ratio is 89% (Azzimonti, 2010).” The study also found that steady state welfare levels would actually rise by 2.85%, signifying that the decrease in debt would offset any negative effects felt from decreased public spending. Proponents of the Balanced Budget Act also argue that it would force the government to remain small and less involved in everyday matters.

Obviously from the before mentioned study, government would reduce spending considerably. From this, one can conclude that the size of government would decrease dramatically, if government expenditures are indeed an accurate representation of the size of government.


While both sides have decent arguments, I think the best policy solution lies somewhere in between what both sides want. Immediately cutting spending or ramping up taxes to maintain a balanced budget would have a huge negative impact on the economy. But continuing to deficit spend will only lead to more debt.


Currently, payments on interest for the debt ranks as the 5th largest yearly budget expenditure. If we continue to deficit spend, this amount could increase and even become the largest yearly expenditure. That money preferably should be spent on services provided by the government or should just not be taken from taxpayers at all. Rather than allowing taxpayers to put their money where they want, the federal government is forcing taxpayers to pay interest on debt that they have accumulated over the years by promising to do more than the government really should do.

Congress should pass a balanced budget amendment that forces the federal government to not deficit spend. It should be worded so that the government must cut spending rather than raising taxes. The government should be given sufficient time to ease its spending so as to not cause major harm to the economy. Most states already are subject to a form of balanced budget legislation, so why can’t the federal government operate under the same rules?Private citizens can and will allocate their money more efficiently and effectively than government bureaucrats can. The national debt should be a major focus in policy debates and it should be reduced so that payments on interest are not one of the top budget expenditures each year.


Dallin Overstreet is the Senior Policy Research Fellow at the American Freedom Institute

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