« EelmineJätka »
best left to the political process where they can be resolved over time unhampered by fixed or arbitrary constitutional strictures.
Justice Holmes cautioned nearly 75 years ago that the “Constitution is not intended to embody a particular economic theory." In our view, economic policies are not proper subjects for constitutional amendment. They are best left to the political processes where the majority is enabled and expected to enact its concensus into law and to alter the law when the majority view changes.
But more significantly, adoption of any of the proposed amendments, would affect fundamentally-and in our view unwarranted-changes in the character of the Constitution. These amendments are unlike anything that has ever gone before, both in form and in substance.
Of the previous 26 amendments, 12 protect the right of individuals, 5 extend the right to vote and 7 deal with the structure of Government. The existing amendments have carefully avoided endorsing specific economic social programs or imposing restraints upon the Government's freedom to act beyond the minimum necessary to protect individual liberty and preserve the Federal system.
The only exceptions are the 18th and the 21st amendments opposing and then repealing prohibition. The proposed budget amendments are more like the prohibition amendments than any others. They do not state fundamental principles; they do not state broad and enduring ideals to which we firmly commit ourselves as a Nation; they do not affect the structure of Government or protect individual rights.
Like the prohibition amendments, the proposed budget-balancing amendments reflect less basic and more transitory concerns which, however popular they may now be, do not warrant elevation to permanent constitutional status. In our view, the most appropriate remedy for curbing a spendthrift Congress is not a constitutional Amendment but the election of more frugal Congressmen.
I would like to interpolate at this point. We heard today how valuable an amendment would be. It takes two-thirds of Congress to pass an amendment and three-quarters of the State Legislatures to ratify an amendment, yet it takes only a majority of the Congress to balance the budget. I have never understood why it is believed to be easier to pass a constitutional amendment than it is to get 51 Senators and 200-plus Members of the House to pass a law which would have the same effect.
The proposed amendments also present very difficult problems of drafting. The drafts are either so broad as to present problems in implementation, interpretation or enforcement or so lengthy and full of technical jargon as to be wholly inconsistent with the rest of the Constitution.
In addition, the proposed amendments would effect fundamental changes in the allocation of powers among the three branches of Government and the principle of majority rule. The proposed amendment would shift ultimate budget-making authority from the legislative and executive branches to the judiciary. Any such amendment is likely to result in a host of lawsuits annually, each challenging particular Federal expenditures or appropriations on constitutional grounds.
The judiciary, which now plays little or no role in raising taxes and allocating revenues and is not equipped to do either, will invariably be thrust deeply into the budgetary process if required to enforce an amendment in the face of congressional or Presidential inability or unwillingness to do so.
Judicial involvement in such controversies, the only apparent means of forcing such an amendment, would radically alter the present division of responsibility and power among three branches of Government and weaken both the courts and the Congress. It would also gravely undermine the congressional lawmaking function and cause erosion of respect for the judicial process.
Another point about drafting is that the override or exception provisions of the proposed amendments are themselves unique and pose difficult constitutional problems. At present, no provision of the Constitution requires a three-quarters vote of Congress. The only provisions of the Constitution that require a two-thirds vote of either House of Congress are very few, and they apply generally to votes affecting the basic separation of powers among the three branches.
In virtually all matters, a simple majority suffices. These amendments would change that. As has been pointed out, a majority of Congress is necessary to declare war, but under the proposed amendment two-thirds or three-quarters of Congress would have to vote to pay for the war. The difficulty of mustering such a large majority even in times of crisis could pose a significant barrier to effective Government action when it is needed most. Indeed, under most of these proposals, if the Government were already spending to the constitutional limit, war, military, or other emergencies of any sort, or indeed any new Govermnent activity involving major additional expenditures would require a two-thirds or three-fourths vote of the Congress. No longer would it be a majority rule, it would be a twothirds and three-fourths majority rule.
In sum, the blunt weapon of the constitutional amendment is a wholly inappropriate means of solving the complex, uncertain, and ever-changing economic problems which confront our Nation. Today's panacea if elevated to constitutional status, is likely to become tomorrow's problem.
For these reasons, we oppose the constitutional amendment as an appropriate means of balancing the Federal budget or limiting Federal spending. These arguments are spelled out in more detail in my testimony and report.
Senator Bayh. Thank you very much, Mr. Beil. You have been very thoughtful coming here. I know you must have a lot of things you could be doing in New York, and the hour is late.
Would you have any objection if I submitted some questions to you in writing that we can then supplement the record as if we had the dialog here so we don't keep you any longer?
Mr. BEIL. No objection, sir.
Senator Bayh. Why don't we do that and again my thanks to you and the New York bar. I found on the past issues that your organization has been one of the most responsive and analytical of organizations that deal with problems.
I want to study your full statement and your answers to the questions. I appreciate your interest.
Thank you very much.
[Whereupon, at 12:23 p.m., the subcommittee was adjourned, to reconvene, subject to the call of the Chair.]
(Questions from Senators Bayh and Thurmond, with responses, Mr. Beil's prepared statement, and additional material, follow:]
RESPONSES TO ADDITIONAL QUESTIONS POSED BY SENATOR BAYH Senator BAYA. In your statement, Mr. Beil, you said under a balanced budget amendment the budget-making authority would shift from the legislative and executive branches to the judiciary. Can you elaborate on what, in your opinion, would occur and to what degree it would affect the American people?
Mr. BEIL. As you know, Mr. Chairman, in our society, the federal courts, particularly the Supreme Court, have the ultimate authority to decide constitutional questions. It's the Supreme Court that has the last word in interpreting the provisions of the Constitution.
Since there is no balanced budget requirement or spending limitation now in the Constitution, the courts exercise almost no fiscal authority. Budgetary questions are solely within the domain of Congress and the President.
If an amendment were adopted, the situation would change dramatically. For the first time in the history of the Republic, budget matters would raise questions of constitutional interpretation: Is a particular expenditure an “off-budget” or “onbudget" item within the meaning of the amendment? Will a certain expense item cause the government to exceed the constitutional limit on spending? Is the tax rate high enough to meet the constitutional requirement that the budget be balanced? And so on and so forth.
Who will decide these questions? In our view it will have to be the Supreme Court and the other Federal courts. No other enforcement mechanism exists to resolve these or any other--constitutional questions.
Because of this, we can easily imagine a host of lawsuits every year challengingon constitutional grounds-virtually every controversial program, every budget, every change in the tax code. Critics of particular programs or policies will rush into courts to claim that the costs of the program will
exceed estimates and unbalance the budget. Each year, the passage of the budget will not end the budgetary process, but only mark the beginning of a new series of lawsuits. Every attempt to shift an item from an "on-budget” to an "off-budget” line will be challenged. Elimination of tax loopholes will also be met with constitutional tests in the courts.
Moreover, Senator, if there is a sudden, unexpected downturn in the economy and the President and Congress are unable or unwilling to cut expenditures or raise revenues to keep the budget in balance, what will happen? The Supreme Court will be called upon to order Congress and the President to comply with the Constitution.
The problems do not end there, Mr. Chairman. How will the courts decide these lawsuits? Budget questions are inherently. “political"—they require choices between competing social and economic policies and priorities. The give-and-take of congressional deliberations is an excellent means to hammer out the compromises necessary to make these decisions.
The courts don't work this way, however. Our society-for good reason-has tried to isolate the courts from the daily ebb and flow of political tides. We expect judges to make choices based primarily on logic and reasoning, not politics. Moreover, the courts do not have either the training or the experience to decide how high the tax rate should be or whether money is best spent for example, on the army or for revenue-sharing.
Yet these are exactly the type of questions likely to be brought to the Supreme Court when it is called upon to enforce a balanced budget amendment.
The tragedy of this picture, Mr. Chairman, is that if the proposed amendments are passed, the American people will lose control over the budgetary process—just the opposite effect the amendment's proponents are claiming. The Congress and the President can be quite sensitive to the needs and demands of their constituents. By exercising their right to vote, the American people can exercise close control over federal expenditures and taxes.
But if an amendment is adopted, the final say over the budget will pass from Congress and the President to the Courts—from elected officials who have to be reelected periodically to nine men who are appointed for life and isolated from the political process.
54-267 0.80 - 16
The result will be to undermine the budgetary role of the Congress and the President and to involve the courts in unresolvable, political controversies which will inevitably erode respect for the judicial process. But the real victims will be the American public who will lose control over the economic decisions that so greatly affe. t them.
Senator Bayu. Could you comment further, Mr. Beil, on the Bar Association's views of the enforcement of an amendment on the on-budget and off-budget items sucy as tax subsidies and its effect?
Mr. Beil. Yes, sir. We found in our research that the definition of the federal budget is by no means clear. Many costly programs such as the Federal Financing Bank (which may spend $11 billion this fiscal year), govenment-sponsored corportions and Federal loan guarantee programs are generally considered "offbudget” items. They don't enter into most discussions about the size of the deficit or the public debt.
You also mentioned, Mr. Chairman, tax subsidies and incentives. These provisions of the tax code are considered by many to be forms of "negative” government spending and are also generally not included in determining the size of the deficit.
The problem is what to do about these items. If they are included within the constitutional definition of a balanced budget, they make the problem of how to achieve that goal much harder. If they are not included, then this raises the possibility that Congress could render any amendment meaningless simply by shifting on-budget items to off-budget ones or changing them to tax subsidies. Indeed, one study reported that it would be possible to use these devices to create, for example, a $100 billion national health insurance system without adding a single dollar to the budget.
Your question, Mr. Chairman, also highlights another problem with the proposed amendments. If the amendment is carefully drafted to spell out what is and is not included, the amendment will be so detailed and technical as to be inconsistent with the rest of the language of the Constitution. Such an amendment will also freeze today's budgetary process and its jargon into permanent constitutional status, making adaptions to future needs and circumstances more difficult.
On the other hand, if the amendment is broadly worded to conform to the rest of the Constitution, it will undoubtedly leave these types of problems unsettled. It will be then up to the Supreme Court and future Congresses to resolve these issues. The uncertainty this will breed will be equally unhealthy for the economy and the Constitution.
Senator Bayh. Would you expand on your statement regarding the amendments pending before this subcommittee requiring three-fourths vote of Congress rather than the historical two-thirds—can you explain why this unique situation would pose difficult constitutional problems?
Mr. Beil. First of all, Mr. Chairman, no section of the Constitution requires a three-fourths vote of Congress for any matter. The only time a three-fourths majority of anything is necessary is in article V, which requires three-fourths of the states to ratify a proposed constitutional amendment.
As you know, several sections of the Constitution mandate a two-thirds vote of either or both Houses of Congress, but they are quite rare and generally deal with matters affecting the separation of powers among the branches of government, the fundamental structure of the government or discipline and impeachment. The sections of the Constitution which require a two-thirds vote of either House are: Art. I, Sec. 3 (to convict following an impeachment); Art. 1, Sec. 5 (to expel a member of the House or Senate); Art. I, Sec. 7 (to override Presidental vetoes); Art. II, Sec. 2 (to approve treaties); Art. V (to propose Constitutional amendments); the 25th amendment (to resolve disputes over presidental disability). Also the third section of the 14th amendment required a two-thirds vote of Congress to grant exemptions from the prohibition inst holding public office imposed upon officials of the Confederacy.
The rarity of the two-thirds or three-fourths requirement reflects, I think, 9 realization that such a "super-majority” is quite difficult to obtain, and should not be required except for those very few occasions where fundamental issues are at stake.
The proposed amendments before the Committee, however, would change all of this. Most of the amendments would allow deficit spending if approved by a "super-majority" of Congress.
Given the difficulty Congress now has in balancing the budget, it's most likely that if any of these amendments pass, the Government will always be spending
up to the constitutional maximum. If a two-thirds or three-fourths vote is then necessary to approve additional spending-or to approve a tax cut-this will mean that all emergencies, any new programs or any tax relief proposals will need the support of two-thirds or three-fourths of Congress.
No longer, Senator, will this be a country where the majority rules. If the amendments pass, a minority of one-third or one-fourth of Congress plus one will rule. They will have the power to block passage of new programs or to prevent emergency action in crises. The negative power which this small group will possess could paralyze the government in an emergency and is fundamentally anti-democratic-a small minority could repeatedly prevent the wishes of the majority of the people from being enacted into law.
Senator Bayh. Since January of this year, I have seen a change in our economic situation and have become increasingly concerned as to whether a balanced budget amendment would have improved or further degenerated the economic situation. Could you give me your thoughts on this?
Mr. Beil. I'm a lawyer, Senator, not an economist, and all our committee members are the same. We just don't know what effect a balanced budget amendment would have on the economic situation.
But what disturbs us, Senator, is that many economists disagree on whether a balanced budget is a good idea or not. In fact, there was a study done by the staff of the Joint Economic Committee in 1976 which concluded that if the country had followed a balanced budget policy between 1965 and 1974, the economy would have been much worse off and there would have been little effect on inflation.
Our committee does not have the expertise to take sides in the economic debate. We do believe, however, that the fact that such a debate exists is grounds for considerable caution in deciding to elevate one theory or another to permanent constitutional status.
Senator Bayh. As you noted, the Constitution embodies fundamental organizational and human rights principles. Is there any precedent in our constitutional history for putting concepts such as the ones embodies in these amendments in the Constitution?
Mr. Beil. What precedents there are, Senator, do not argue for repeating them. The only two examples we found roughly analogous to the balanced budget amendment- where a specific economic or social program was endorsed in the Constitution-are the condonation of slavery in the original Constitution and the prohibition amendment--the 18th. The question of slavery, both as an economic institution and a moral dilemma, took a civil war to resolve. Prohibition was repealed but not before tremendous social upheaval and a tragic decline in respect for law and morality.
The two examples argue most strongly for keeping the Consitution free of simplistic remedies for social ills. The cure may be worse than the disease.
RESPONSES TO ADDITIONAL QUESTIONS POSED BY SENATOR THURMOND Senator THURMOND. As you have noted, the amendment process is used t correct "discovered faults” in our government. Don't you believe that Congres inability to control federal spending, an inability which will eventually strike at the fundamental economic base of this country, represents a "discovered fault” which must be cured? I believe that Madison would perceive this to be a serious "fault".
Mr. Beil. I disagree, Senator, that this is the type of "discovered fault” Madison was referring to. There are no constitutional barriers or obstacles to Congress' control of federal spending. The Constitution already gives Congress plenary power in this area. Congress can balance the budget if a majority of Congress votes to do so.
The "fault” you have identified, Senator, is in the policitcal process, not the Constitution. There is no reason to tamper with the constitutional structure of the Federal government when Congress already has the power it needs to balance the budget by a simple majority vote.
Senator THURMOND. In the alternative, you contend that amendments should protect individual rights. Well, doesn't inflation steal a person's property rights by effectively devaluating the money a person receives for his labors? Most people would feel that inflation attacks their property rights.
Mr. BEIL. It is not clear, Senator, that the proposed amendments will actually stop inflation. As we noted in our report, economists disagree on what effect a balanced budget would have on inflation. Some economists, in fact, believe that that amendments will make inflation worse.