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Court would almost certainly be asked to serve as referee. Because the Court would be obliged to protect the interests of the states in the amendment process, it cannot be assumed that the Court would automatically decline to become involved on the ground that the dispute raised a non-justiciable political question. In any event, depending upon the political strength of the parties to the dispute, a decision to abstain would amount to a judgment for one side or the other. Like an official judgment on the merits, such a practical resolution of the controversy would leave the Court an enemy either of Congress or of the Convention and the states that called it into being.
Even in the absence of such a dispute over the Convention's initiation and completion, the Court could become embroiled in a confrontation with Congress over the limits of congressional power under Article V. For example, a bill introduced in the last Congress by Senators Helms, Goldwater, and Schweiker, entitled the “Federal Constitutional Procedures Act," S. 1880, 95th Cong., 1st Sess. $ 7(a) (1977), provided, in part: “A convention called under this Act shall be composed of as many delegates from each State as it is entitled to Senators and Representatives in Congress. In each State two delegates shall be elected at large and one delegate shall be elected from each congressional district in the manner provided by law.” One may readily guess that, were Congress to apply such a provision in the exercise of its Article V powers, the Supreme Court would be asked to decide whether the one-person, one-vote rule is applicable to a national constitutional convention.2 Similarly, a rule prescribed by Congress providing that “a convention call under this Act may propose amendments to the Constitution by a vote of the majority of the total number of delegates to the convention,” S. 1880, supra, $ 10(a), might be challenged as an unconstitutional attempt to regulate the internal procedures of an Article V Convention.13 Whether the Court, once called upon to vindicate the one-person, one-vote principle or the autonomy of a convention, would invalidate an act of Congress passed pursuant to Article V is no doubt an open question. But the stress that a decision either way would place upon our system is another unwelcome possibility inherent in the Article V Convention device. Like the risk of confrontation between Congress and the Convention, the possibility of conflict between the Supreme Court and Congress is, of course, not peculiar to the Article V Convention device. But this device, which carries the potential for such grave clashes of power, should be utilized only if no alternative process is at hand.
C. The Risk of Confrontation Betwecn the Supreme Court and the States A decision upholding against challenge by one or more states an action taken by Congress pursuant to Article V would, needless to say, be poorly received by the states involved. Truly disastrous, however, would be any result of a confrontation between the Supreme Court and the states over the validity of an amendment proposed by their convention. Yet the convention process could, quite imaginably, give rise to judicial challenges that would cast the states into just such a conflict with the Supreme Court.
It is true that such conflicts are theoretically possible even when the more familiar amendment route—the congressional initiative-is followed. But in that context it has been settler for over half a century that Congress exercises exclusive control over the mode of an amendment's ratification, and thus has the last word on such matters as attempted rescission and the timeliness of ratification.14 When the familiar route is taken, therefore, the established preeminence of Congress militates against any divisiveness arising from a conflict involving the states—although even along this familiar route passions may sometimes run high, as the recent debates over extension and rescission of the Equal Rights Amendment demonstrated. But when the alternative course of an Article V Convention is chosen, soothing assertions of congressional supremacy are bound to be undercut by reminders that the Convention device was, after all, meant to evade control by Congress. And, once such battle lines are drawn where Congress' authority is not widely recognized, the ensuing debate is sure to be vehement.
19 See ABA Special Constitutional Convention Study Committee, "Amendment of the Constitution by the Convention Method Under Article V" 34 (1974) (concluding that the rule is applicable (hereinafter cited as ABA Report].
13 See ABA Report, supra, 19-20 (characterizing such an attempt as unwise and of ques. tionable validity).
14 See Dillon i Gloss, 256 U.S. 369 (1921); Coleman v. Miller, 307 C'.S. 433 (1939).
D. The Absence of Acceptable Answers in Such Confrontation Having indicated at the outset of Part IV of this memorandum that a few questions about the Article V Amendment device do indeed have clear answers, I would reiterate here that a large number of critical questions are completely open. These are questions that could well arise in one or more of the confrontations sketched above. As to each of those questions, one can find a smattering of expert opinion and some occasional speculation. But for none of them may any authoritative answer be offered. To make the point forcefully, one need only present a catalogue of the basic matters on which genuine answers simply do not existthe matters as to many of which protracted dispute could surely be expected: 1. The Application Phase
(a) Must both houses of each state legislature take part in making application to Congress?
ih) By what vote in each house of a state legislature must application to Congress be made? Simple majority? Two-thirds?
(c) lay a state governor veto an application?
(e) Must every application propose a specific subject for amendment, or may a state apply to revise the Constitution generally?
(9) What of applications proposing related but slightly different subjects or amendments? By what criteria are distinct applications to be aggregated?
(9) May a state rescind its application? If so, within what period and by what vote?
(h) What role, if any, could a statewide referendum have in mandating or forbidding an application or a rescission?
Jay Congress authoritatively answer any or all of the above questions? May the States? Could such answers apply to applications already made? What role, if any, would courts play in answering such questions? Even these questions (about who has the power to decide) must be described as unanswerable. 2. The Selection and Function of Delegates
(a) Who would be eligible to serve as a delegate?
(6) Must delegates be specially elected? Could Congress appoint its own members?
(c) Are states to be equally represented, as they were in the Convention of 1757?
(d) Would the one person, one-vote rule apply instead, as it does to all legislative bodies except the Senate?
(e) Would delegates be committed to cast a vote one way or the other on a proposed amendment?
(n) Would delegates enjoy immunities parallel to those of members of Congress? (9) Are delegates to be paid? If so, by whom?
Which of these questions, if any, may Congress authortatively answer? How much supervision may Congress exercise over the selection and function of cielegate? What supervisory role would the courts play? 3. The Convention Process
(a) May Congress prescribe any rules for the Convention or limit its amending powers in any way? În 1911, Senator Heyburn opined that, "[w]hen the people of the United States meet in a constitutional convention there is no power to limit their action. They are greater than the Constitution, and they can repeal the provision that limits the right of amendment. They can repeal every section of it, because they are the peers of the people who made it.” 15 Was he right or wrong? If he was right, then an Article V Convention could propose amendments on any imaginable subject.
10) How is the Convention to be funded? Could the power to withhold appropriations be used to control the Convention?
(c) May the Convention remain in session indefinite. May it agree to reconvene as the need arises?
Again unknowable are the respective roles of Congress, the States, and the courts in resolving these matters. 4. Ratification of Proposed Amendments
(a) To what degree may Congress-under its Article V power to propose a "Mode of Ratification or ancillary to its Article V power to 'call a Convention,'
IS 46 Cong. Rec. 2769 (Feb. 17, 1911).
or pursuant to its Article I power under the Necessary and Proper Clauseeither refuse to submit a proposed amendment for ratification or decide to submit such an amendment under a severe time limit? What if Congress and the Convertion disagree?
(6) May Congress permit or prohibit rescission of a state's ratification vote? May the Convention? What if Congress and the Convention disagree?
Unknowable once again are the respective roles of Congress, the States, and the courts in providing a definitive resolution in the event of disagreement.
The call for an Article V Convention to write a balanced budget requirement into the Constitution reflects profoundly misguided views of how national fiscal policy should be implemented and how the nation's fundamental law should be amended. Of doubtful wisdom at any time, such a call especially misreads the needs of the country today. I would hope it also misreads the country's mood-& mood that presidential leadership can help to shape.
"BUDGET-BALANCING AND SPENDING LIMIT PROPOSALS," STATEMENT BY WALTER W.
HELLER, UNIVERSITY OF MINNESOTA, BEFORE THE SENATE BUDGET COMMITTEE, MARCH 5, 1979
I appreciate this opportunity to appear before the Senate Budget Committee on the hotly debated topic of mandatory budget-balancing and spending limits, constitutional or otherwise.
The territory that Chairman Muskie has asked us to roam is very wide and deep, comprising budget-balancing, spending-limit, and tax-cutting proposals, both constitutional and legislative. To make this Herculean task more manageable, let me start with the proposal that seems to have caught the popular imagination-a Contsitutional amendment mandating a balanced-budget-and is claimed to have the support of 26 to 28 state legislatures.
I am not unaware that leading members of this Committee have forcefully and cogently attacked the proposal to enshrine a rigidly balanced-budget in the Constitution. Senator Muskie has called it "unworkable, counter-productive, and even irresponsible.” Senator Bellmon has warned Governors not to "go overboard and adopt a mechanistic process that will make it difficult to deal with changing circumstances.” And they have been joined by other Congressional leaders like Senator Kennedy (Chairman of the Seante Judiciary Committee), Representative Rodino (Chairman of the House Judiciary Committee), and House Minority Leader John Rhodes (who has expressed “grave reservations" about a balancedbudget amendment). So it might appear that an attack on the balanced-budget proposal is a bit like flaying a dead or at least dying horse.
But the Gallup Poll, the legislators of some 28 states, and the half dozen members of this Committee who are co-sponsors of bills to mandate a balanced-budget in one form or another all suggest that the movement is by no means on its last legs.
In an era of dissatisfaction with big government, high taxes, and stul horn inflation, it is not too surprising that the Gallup Poll 'shows a six-to-one majority favoring a balanced-budget amendment. And it must be a strong temptation for an elected official—if he or she wants to be re-elected—to vote for such a proposal.
But this is one case where the majority is simply wrong-not in seeking some curbs on government and inflation, for that is their inherent right in a democraevbut in seeking to do so by putting the federal government in a fiscal straitjacket. In other words this is a case where responsible political leadership consists in leading voters out of the valley of error and supporting better and sounder ways to achieve their goals.
Since the major thrust for the balanced-budget amendment (and some of its half-siblings) comes from a misinformed public, it may be worth while to examine some of the fallacies that seem to underlie public thinking on this subject.
FALLACY NO. 1
“Individuals, families, and households have to run a balanced-budget-so why shouldn't Uncle Sam?” People fail to realize that typically when they buy a car or a boat, or most obviously, a house, they are doing anything but running a balanced-budget. At times, they run 'deficits-often huge deficits-relative to
current income. So they are asking Uncle Sam to adhere to a rigid and austere standard that they don't observe themselves.
Prudent budgeting and balanced-budgets simply aren't the same thing. Often, a rigidly-balanced budget is pure fiscal imprudence. Unlike the household, the federal government has the specific statutory responsibility to serve as a balance wheel for the economy, using the federal budget not simply as a means of financing government activities but as a means of overcoming unemployment and recessions on one hand and an overheated economy on the other. More often than not, that calls for unbalanced-budgets.
FALLACY NO. 2 Closely related to the first fallacy is the second one that runs something like this: “We consumers (homeowners, corporations) pay back our debts, but Uncle Sam just keeps piling up his debts without end."
The surprising—to some even jolting-truth is that in the period since World War II, the federal debt has been the slowest growing major form of debt. As the following table shows, the federal debt today is less than three times the size it was in 1950, while consumer installment debt is nearly fourteen times, mortgage debt sisteen times, corporate debt eleven times, and state-local debt thirteen time its 1950 level.
Even with the unprecedented run-up of federal debt in the face of two recessions in the 1970's, the doubling of that debt since 1970 is just about equaled by the rise of corporate and state-local debt, while consumers and homeowners have substantially out-distanced Uncle Sam in expanding their debt.
None of this is meant to justify the present levels of federal deficits or debts nor to suggest that the federal debt poses no problems. But the figures do serve to put the federal debt in a perspective that is often misunderstood.
: Approximation based on table B-64 in 1978 report and table B-62 in 1979 report.
FALLACY NO. 3
"State and local governments have to live by the balanced-budget rule, so why shouldn't l'ncle Sam?"
True, states and localities have to balance their budgets annually, except for capital outlays, for which they can borrow. But federal budgetary accounting throws current and capital outlays (as it should) into the same pot. So balancing the federal budget means matching total outlays with current tax revenues, which is quite different from the balanced-budget concept for states and localities.
Not ony is the state-federal budget analogy off base, but states would be the first, or at least one of the first, to feel the sting of a balanced-budget mandate in the Federal Constitution. There is already serious talk in Congress of cutting revenue sharing and other grants to state and local governments as the most Datural targets of budget austerity, especially if the states force a year-in-year-out balanced-budget on the federal government.
Let me underscore another decisive difference between state and federal budget impacts: a state of local budget can be balanced by tax hikes or spending cuts without jarring the whole U.S. economy. The federal budget cannot. If the national economy starts to slide, joblessness rises, income and profits fall, and the federal budget automatically goes into deficit as revenues shrink and spending rises. Try to balance it by boosting taxes or forcing cuts in spending, and the result will inevitably be to draw that much more purchasing power out of an already soft and sluggish economy.
Trying to balance the budget under these circumstances would send the economy into a deeper tailspin, thereby throwing more people out of work, further cutting tax revenues and boosting unemployment compensation, food stamps, and similar entitlement expenditures, thus throwing the budget even more out of whack. A dog chasing its own tail comes to mind.
FALLACY NO. 4
"But unlike private and state-local deficit financing, federal deficits are a major, perhaps even the major, source of inflation.” Both analysis and evidence fail to support this proposition.
Except where federal deficits pump more purchasing power into an already prosperous or overheated economy, they simply are not inflationary. When the economy is slack or in a recession, when there are idle workers and idle plants and machinery to be activated by additional demand for goods and services, the deficit will help the economy get back on its feet. In those cases, tax cuts or spending hikes that enlarge the deficit serve to overcome the waste of human and material resources associated with economic slack or recession.
In other words, there are both destructive federal deficits and constructive deficits, depending on the state of the private economy. What we should seek is fiscal discipline—the avoidance of waste, inefficiency, boondoggling, and unnecessary government programs—but not at the cost of strangling the federal government in its attempts to serve as a balance wheel for the national economy and an instrument for avoiding that greatest of wastes, namely, the idling of millions of human beings and machines and factories in recession and slack.
Even a cursory inspection of the data on deficits and inflation shows little relation between the two:
Reaching back to 1919-20, we note that rapid inflation was associated with a large surplus.
Then Milton Friedman also reminds us that “one of the most extreme deilations we had in history-decline in prices—was in the 1931-33 period. In those years, the federal government was running a deficit.”
From 1959 to 1965, federal deficits were the order of the day, yet price inflation was little more than 1 percent a year.
In the face of huge deficits in 1974–76, price inflation dropped from over 12 percent to less than 6 percent.
FALLACY NO. 5
"Well, even if deficits aren't as bad as we thought, the federal budget is out of control, and the only way to get it under control is to slap some kind of a Constitutional lid on it.”
Once again, the facts run to the contrary:
As a proportion of the Gross National Product, the budget is being reduced from 22.6 percent in 1976 to 21.2 percent in 1980.
As against 12.2 percent annual ncreases in spending for 1973–78, the rise from 1979 to 1980 will be only 7.7 percent.
According to the Congressional Budget Office staff, President Carter's proposed $531 billion budget for 1980 falls $20 billion short of the amount that it would cost simply to maintain current services under current law.
The trend growth in revenues from 1978 to 1980 will be 12 percent, well ahead of the trend growth of 872 percent in expenditures. (These are the comparative growth rates in an economy that is growing at a steady trend rate.).
Quite apart from the numbers, the popular clamor for getting the budget under control" seems to ignore two important facts:
For the past four years, the Congress has been operating under a new budget procedure that has brought vastly more discipline and responsibility into the budget process. In other words, the mechanism for getting the budget under control is already in place and is working.
Both the White House and the Congress have heard and heeded the message implicit in Proposition 13, calls for Constitutional budget limits, and the like. Whether one likes it or not, budget austerity is the political order of the day.
FALLACY NO. 6
"The balanced-budget mandate is a simple and workable way to force the White House and Congress at long last to match spending and tax revenues."
The simple truth is that this simplistic approach is beset with simply prohibitive difficulties of definition, administration, evasion, and incentives for bad government practice: