The reasons are twofold. First, private consumption depends upon income growth and has never shown a long-run tendency to rise faster than income. So why should it suddenly change now? We can see no reason to expect such a remarkable change in the behavior of consumers. Second, any substantial reduction in G would remove from the stream of aggregate demand the one significant, dynamic, leading expenditure flow that has for practically the whole of the twentieth century assured sufficient demand stimulus to induce and warrant a 3.7 percent growth of productive capacity. Obliteration of this demand stimulant, tying it for example to a 3.7 percent growth rate, would leave no major known demand flow that would perform the dynamic growth role that private investment spending provided in the nineteenth century. Hence, the current "movement" of the Simons, Greenspans, and the National Free Enterprise Day proponents to so limit the growth of government is advancing a prescription for economic stagnation.

[From the Washington Post, Feb. 4, 1979]

BUDGET AMENDMENT KNOCKS AT HILL DOOR

(By Susanna McBee)

Between 1900 and 1911, 31 states petitioned Congress to call a constitutional convention to produce an amendment requiring the direct election of senators. That was the necessary two-thirds required by the Constitution to call such a convention, but Congress did not follow the mandate. Instead, the lawmakers proposed the measure themselves, and in 1912 it became the 17th Amendment to the Constitution.

To this day, scholars debate whether that Congress acted because of the petitions or the general mood of the country.

But there is virtually no debate about the feelings of the current Congress on convening a convention to consider an amendment requiring a balanced federal budget. It does not like the idea.

Nevertheless, such calls have come from 25 states-26 if you count Nevada where the legislature passed one that was vetoed in 1977, or 27 if you count Indiana, whose vote 22 years ago may no longer be valid.

This year the National Taxpayers Union here is quarterbacking a drive to get petitions passed in 34 states, the requisite two-thirds, and David Keating, who heads the effort, says he thinks it will succeed by June.

"I wouldn't be surprised if they do it," said Sen. Birch Bayh (D Ind.), chairman of the Judiciary subcommittee on the Constitution. Bayh does not hide his dismay at the prospect of a convening convention to propose an amendment.

"It would make the Ringling Brothers Big Top look like the minor leagues," he said.

Noting that many of the states' petitions tell Congress to pass a balancedbudget amendment if Congress wants to avoid a convention, Bayh said his subcommittee would hold hearings by the end of this month on various balance-budget proposals, statutes as well as amendments, that his colleagues are offering.

There's a question of what the states really want," he added. "My own state legislature is in the process of passing a petition for a constitutional amendment. It also tells me it doesn't want Congress to cut off the federal funds that go to Indiana.

"A lot of states are doing the same thing. On the one hand, it's 'gimme, gimme.' ́On the other, it's 'let's end the deficit,' which we would easily do by cutting aid to state and local governments."

Bayh said he favors, a measure that would require “a balancing of accounts over a five-year period," but not an amendment.

Grover Norquist, executive director of the taxpayers union, said his organization wants an amendment because "anything less would not be binding on future congresses." The resolutions introduced this year in 27 state legislatures would give Congress until the end of next year to propose a budget amendment.

"If they don't do it by the end of next year, we'll force a convention," Norquist said. "It would be limited to the one subject, and, as with any amendment that Congress proposes, 38 states would have to ratify before it could become law." But forcing a convention may not be easy. Even if the necessary number of states approves petitions calling for a convention, it is not clear that Congress would do so. One reason is that Congress has never passed rules establishing how

a convention would be called, how delegates would be chosen or how many votes would be required to propose an amendment.

Former senator Sam J. Ervin (D-N.C.) came up with some rules, which the Senate but not the House-passed twice, in 1971 and 1973. They said there should be one delegate from each congressional district and two chosen at larg from each state and that a two-thirds vote would be required to approve amendment. Similar measures are now being proposed by Sen. Jesse A. Heims (R-N.C.) and Reps. Henry J. Hyde and Robert McClory, both Illinois Repur

licans.

Another problem is that not all the states that have passed petitions for a convention have sent them to Congress. So far, the Senate has received 17, the House, 16.

"The attitude of Congress is: 'We don't count them unless we have them,'" said Meredith McCoy, a lawyer with the Congressional Research Service. "Many members of Congress have asked for data on the convention process. There's a lot of scholarly material, but there are no rules. No one knows anything for sure," she said.

The 25 states that have passed convention resolutions are Alabama, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Kansas, Louisiana, Maryland, Mississippi, Nebraska, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, and Wyoming.

Nevada Assembly Speaker Paul May said he does not count his state in that group because of the governor's veto two years ago of a similar resolution. "But we should pass another one by the end of February," he said.

This year resolutions have passed one house in Indiana, Idaho, Iowa, and California. In California, Assembly Speaker Leo McCarthy strongly opposes the measure, and NTU's David Keating says, "It's a rough battle. We can't tell yet if it will pass."

[From the Washington Post, Feb. 5, 1979]

GOP CHIEFS SHUN BALANCING BUDGET BY AMENDMENT

(By David S. Broder)

EASTON, MD., Feb. 4.-Republican Party leaders today rejected as "gimmickry" the call for a constitutional amendment to require a balanced federal budget and, instead, said the GOP would campaign in 1980 for lower taxes and tougher spending limits.

The issue sharply split members of Congress and state officials at a party conference here and left the losers complaining that their party may see another popular issue preempted by what one of them called "born-again Democratic fiscal conservatives."

After two hours of sometimes emotional debate, they found agreement on a bare-bones resolution blaming the Democrats for "mounting deficits" and calling on Congress to balance the budget in fiscal year 1981 and to consider immediately a constitutional amendment to "limit federal spending."

But Sen. Bob Dole of Kansas, one of the 1980 presidential hopefuls at the session, complained that the resolution "ducked the tough one" on the balanced-budget amendment, and Rep. E. G. (Bud) Shuster of Pennsylvania said it showed “we're nothing but pusillanimous pussycats."

Dole and his allies said the GOP should take the lead in pushing the balancedbudget amendment when hearings begin in House and Senate Judiciary subcommittees.

Twenty-five states have approved some form of petition calling on Congress to pass a balanced-budget amendment or call a constitutional convention for that purpose. With 34 states, there would be a mandate for Congress to take one of those alternatives.

California Gov. Edmund G. (Jerry) Brown Jr., a prospective Democratic challenger to President Carter's renomination, has endorsed the balanced-budget amendment, as have several GOP presidential hopefuls.

But Republican National Chairman Bill Brock, House Minority Leader John J. Rhodes (Ariz.) and Rep. Barber B. Conable Jr. (N.Y.), ranking minority member of the Ways and Means Committee, led a concerted attack on the amendment idea that succeeded in blocking it.

Accusing Brown of "demagoguery," Brock said it is a "very, very hazardous cercise" to write such a requirement into the Constitution.

"I just don't like gimmickry," Rhodes said. "I think the Republican Party hould tell the American people there's nothing easy about this.. and if they ant a balanced budget, they should elect a Republican Congress."

Warning against "constitutional Russian roulette," Conable said, "We Reublicans understand the frustration of the people, but we believe in caution. . . . The Constitution should not be the repository of all kinds of nitpicking mendments."

But the conference resolution approving a constitutional limit of undefined trictness on federal spending was termed "only half a loaf" by Rep. Robert McClory (Ill.), ranking Republican on the House Judiciary Committee.

"Unless we want another popular issue, a Republican issue, to escape from us, ve have to speak to the balanced budget issue," he said.

Dole, who has introduced an amendment requiring that taxes and spending be ut to 18 percent of the gross national product within three years, echoed the warning that the amendment "is a Republican issue and we're about to lose it." But, in the end, constitutional caution prevailed over the desire for proprietorship of the fast-moving cause. By a two-vote margin, 34 to 32, the conferees declined to open the draft resolution to change. That result was later reveresd by a 41 to 27 vote, but only to add some rhetoric accusing the Domocratic majority in Congress of failing to "discipline itself to bring spending within reasonable limits."

The issue cut across normal ideological lines, with such staunch conservatives as Rep. Jack Kemp (N. Y.) and Sen. James A. McClure (Idaho) taking the cautionary stand, while Dole and McClory went the other way.

The debate closed the second Tidewater Conference, an annual gathering of elected GOP officials chaired by Sen. Bob Packwood (Óre.). Earlier, the conference approved a resolution calling for "substantial phased reductions in federal income tax rates" and indexing of the tax system to offset inflation.

Brock told reporters he was "not at all fearful" of the political effects of shunning the balanced-budget amendment. "We're talking too much about the budget, as if it was a panacea," he said. "Inflation isn't caused just by deficits."

[From the Washington Post, Feb. 18, 1979]

A BUDGET-BALANCING AMENDMENT

(An editorial)

The national drive now under way for a constitutional amendment requiring a balanced federal budget is not unique. There have been similar efforts by state legislatures in the past to amend the Constitution in one way or another by means of a constitutional convention. What's different about this one is that it seems to be getting perilously close to the point of which Congress may have to act, either by calling a convention or drafting an amendment itself; 26 of the necessary 34 states have approved convention calls. We say perilously because we think this is a bad idea, for many of the reasons set forth in a series of articles on the opposite page on Monday, Wednesday and Friday of last week, attempting to put the issue into some sort of legal and historical perspective. When the issue is subjected to that sort of analysis, as distinct from a discussion on the virtues of a balanced budget, it seems clear to us that the first and perhaps conclusive test of any such amendment to the Constitution has to be what it would mean for the Constitution itself.

So we would set aside for now the question of what a budget-balancing amendment of any kind would do to the ability of the federal government to deal with the economic well-being of the country-the short answer to that question, in our view, is that the budget-balancing amendments, in their simplest forms, would wreak economic havoc. As for the more complex formulations now being advanced the ones designed to give the federal government a little more economic flexibility-we think they would wreak constitutional havoc. And we would take as Exhibit A the proposal of Nobel Prize-winning economist Milton Friedman and the Committee on National Tax Limitation. Its sophisticated escape clauses may make it an economist's dream. But it is a constitutionist's nightmare. The Constitution is beautifully written, phrased in succinct and clear language,

so broad in its meaning-and possessed of just the right measure of essential ambiguity that most of it has survived intact for almost 200 years. Compare its language, if we will, with just one passage from the Friedman amendment:

Total outlays in any fiscal year shall increase by a percentage no greater than the percentage increase in nominal gross national product in the last calendar year ending prior to the beginning of said fiscal year. If inflation for that calendar year is more than three percent, the permissible percentage increase in total outlays shall be reduced by one-fourth of the excess of inflation over three percent. Inflation shall be measured by the difference between the percentage increase in nominal gross national product and the percentage increase in real gross national product.

Hardly the work of James Madison or Benjamin Franklin, would you not agree? It was Madison who argued against one provision proposed at Philadelphia in 1787 because the public would never understand it. And it is hardly the kind of material John Marshall was referring to when he wrote, ... we must never forget, that it is a constitution we are expounding," a constitution "intended to endure for ages to come."

The authors of the Constitution used only three words to give Congress the ultimate power a government holds "to declare war"-and only 16 to give it control over interstate and foreign commerce. They needed only 429 words to describe almost all of the vast powers given to Congress. The authors of this budget-balancing amendment have used 476 words to say Congress must balance the budget. Their amendment, in fact, is longer than the entire Bill of Rights.

Reflect on some of the terms used in the proposed amendment. "Gross national product" is an inexact accounting statistic, devised by economists as a tool to measure the goods and services produced by a nation's workers. The initial figure reported for any year is subject to revision as additional data are collected. It is influenced not only by business conditions in this country, but also by such things as the nationalization of American-owned property abroad. Its meaning may be clear to economists, but what about the judges and lawyers who would be required-presumably for the next 200 years-to translate it into specific numbers? Due process of law, equal protection, freedom of speech-these are matters of high principle, appropriate to a constitution. "Gross national product" and "inflation"-these are the necessarily arbitrary and imprecise mathematical calculations of economists, appropriate to the president's annual economic report. There is more that can be said about what this particular amendment would do to the Constitution. It would be the first part of the Constitution that would authorize members of Congress to file suit in federal court to enforce its terms; it even names the specific court in which the suit would be filed-a court whose existence is not even acknowledged in the original Constitution. It would also be the first part of the Constitution that could be altered by a system other than the adoption of an amendment; it would provide that the "limit on total outlays could be changed by a three-fourths vote of Congress, if approved by a majority of the state legislatures.

Leaving aside the compelling point that the Congress right now has all the authority it needs to impose a balanced budget by the appropriation process this version of the proposed budget-balancing amendment is so at odds with the principles on which constitutions are written that it should be rejected out-of-hand by even the most ardent budget-balancers. The document it would amend is not some municipal code or even a piece of national legislation. It is the Constitution of the United States of America, and it deserves to be treated with some respect.

[From the Washington Post, Feb. 25, 1979]

ATTACKING FEDERAL GRANTS

(An editorial)

After years of rapid expansion, federal aid to state and local governments is likely to get closer and less friendly scrutiny on Capitol Hill this year. Public service job programs, which got cut last year, are already under a new attack, And beyond the general pressures to keep federal spending down, Senate Budget Committee Chairman Edmund S. Muskie (D-Maine), Sen. Lloyd Bentsen (D-Tex.) and others have been warning that if state officials keep pushing for a balanced federal budget, Congress might well respond by slashing grants to the

states.

Before any indiscriminate anti-grants campaign gains steam, it's useful to think about what's involved. Federal aid to state and local government has swelled from $20.2 billion in fiscal 1969 to $49.7 billion in fiscal 1975 to $77.9 billion in this fiscal year to a proposed $82.9 billion for fiscal 1980. But that is not merely largesse to client states. It includes a great swarm of programs to meet human and community needs, programs Congress decided were desirable and should be funneled through other levels of government. Over half of that $82.9 billion is meant to provide income, jobs, education, food, housing, health care and other services for people in need. About $13 billion more is for public works, with $6.8 billion of that for roads and most of the rest for sewage treatment and mass transit.

In some areas, such as education, recent increases mainly offset inflation. The largest expansions from 1975 through 1978 were for jobs and economic-stimulus programs, now being cut back, and for health programs. The federal share of Medicaid alone is projected to rise from $10.7 billion to $12.4 billion next year. If Congress wants to cut grants sensibly, the most important single step is to get health-care costs under control. Beyond that, before reducing what actually gets to people and projects, Congress should cut down what does not, by tackling seriously the myriad tangles and inefficiencies that almost everyone involved has been complaining about for so long. That means, of course, taking on the various subcommittees, agencies and interest groups that have sponsored and sustained each narrow program and burdensome requirement. And it means stepping back in many cases and giving state and local officials more leeway to design programs and allocate funds-something Congress is often loath to do.

That sums up the challenge for those who seek overhauls including the nation's governors, who are meeting here for the next few days. Like mayors and county officials, the governors have a long list of generally sound suggestions for paring down overhead and combining programs in several fields, notably economic development and health. The Carter administration has given them a sympathetic hearing, some improvements and a promise of more extensive changes during fiscal 1981.

But there's no reason for the governors to wait. The current atmosphere gives them every reason to press their case with Congress and the public right now. Next to budget-cutting, the most popular theme on Capitol Hill is "oversight.' The governors should help Congress along by amassing specific examples of unnecessary costs, seeking real legislative commitments to change, and pointing out publicly where resistance lies.

[From the Decatur, Ind. Democrat)

CREATING A MONSTER

(By Bob Shraluka)

It has long since been determined that your average, run-of-the-mill politicianwho appears to comprise a large majority-is ready to jump on the first bandwagon which passes by, to swim with the first strong voter tide which flows past him.

If it looks like it'll wash big with old John Q. Public, then do it. Logic, common sense, thoughtful decision and all that sort of junk goes out the window in an attempt to land on the bandwagon before it passes by.

The current bandwagon is a constitutional convention, supposedly to adopt an amendment to the Constitution requiring a balanced federal budget. Indiana recently joined the ranks of states petitioning Congress for the convention; many other states have done likewise, and there seems little doubt that the required 34 states will eventually do so.

It all sounds so easy, so simple, so fundamental. But ***

But, too many people with the expertise to know what they're talking about, and without political motives clouding their thinking processes, are warning against the dangers of such action.

Indiana University Law Professor Patrick Baude, a constitutional law expert, said Monday that too many unanswered questions exist to call the constitutional convention. Also, he warned, while rewriting the constitution was successful in 1787, it could be a disaster to do it now.

Baude made a point which concerns many of us: "*** Many people today are afraid that a constitutional convention might not restrict itself to the reason for calling it an amendment requiring a balanced federal budget."

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