May 13, 2011

Should the Constitution be Amended to Address the Federal Deficit?

Testimony before the House Committee on the Judiciary, Subcommittee on the Constitution
Key materials
Contact us
To speak with a scholar or learn more on this topic, visit our contact page.

Good Morning Chairman Franks, Ranking Member Nadler, and members of the subcommittee. Thank you for inviting me here this morning to discuss whether the U.S. Constitution should be amended to address the nation’s fiscal problems.

I am an associate professor of political science at the University of Rochester and a senior scholar at the Mercatus Center at George Mason University.1 My research focuses on legislative politics and fiscal policy. I have written papers and a book on the subject of budget rules, and I have been following the debate over our nation’s future fiscal course with great interest.2 In my testimony, I will show why attempts to create long-term fiscal reform, stabilize the debt, and reduce the deficit are likely to fail in the absence of Constitutional budget rules.

The United States faces severe fiscal challenges that can no longer be ignored. Our current $14 trillion national debt is just the tip of the iceberg. Entitlement spending threatens to bankrupt the nation. The unfunded liabilities from Social Security and Medicare are three to seven times the size of our current debt, depending on how one calculates these figures.3

Any solution to this crisis must accomplish three things: First, Social Security and Medicare expenses have to be stabilized and future promises have to be limited. Second, discretionary spending has to be pared down. Third, future politicians must be prevented from undoing any reforms that are implemented. The focus of my testimony today will be the third of these requirements.

The recent bipartisan attention to the challenges we face is heartening. The dangers of our debt and deficit levels are no longer the province of commissions whose reports gather dust. Instead, we have elected officials taking a stand and proposing bold changes to the status quo. The President’s National Commission on Fiscal Responsibility and Reform proposed a serious plan, and legislators from both parties endorsed it. House Budget Committee Chairman Paul Ryan proposed an ambitious plan to control federal spending, and President Barack Obama responded to Chairman Ryan’s plan with one of his own. Voters are also paying attention. In a poll conducted by Pew Research Center and The Washington Post in April 2011, an astonishing 95% of respondents agreed that the federal budget deficit was a problem, and 81% agreed that action was needed now.4

This, in short, is a rare opportunity for meaningful long-term change. I believe that a Constitutional amendment can help us avoid making this a wasted opportunity. In my testimony, I will first establish that opportunities for long-term fiscal reforms rarely emerge. I will then show why long-term reforms are unlikely to be robust without Constitutional change. The next part of my testimony will focus on why it is important to get the rules right and offer some principles that I hope members will follow as they work toward achieving fiscal discipline. I will close my testimony by rebutting arguments against a Constitutional amendment.

____________________________________________

  1. The views expressed here are my own and do not represent the official positions of the University of Rochester or the Mercatus Center at George Mason University
  2. See, for example, Primo, David M. 2007. Rules and Restraint: Government Spending and the Design of Institutions. American Politics and Political Economy Series. Chicago, IL: University of Chicago Press. Some passages and ideas in this testimony appear in Primo, David M. 2010. “Making Budget Rules Work.” Working Paper No. 10-62, Mercatus Center at George Mason University, available at https://www.mercatus.org/sites/default/files/publication/Making%20Budget%20Rules%20Work.Primo_.9.28.10.pdf
  3. Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds. 2009. Annual Report. Washington, DC: Government Printing Office; Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. 2009. Annual Report. Washington, DC: Government Printing Office. The Medicare Trustees set unfunded obligations for Part B and D at 0 because they are guaranteed funding from general revenues. However, the portion of Part B and D that comes out of general revenues can reasonably be construed as an unfunded liability, since specific revenues are not allocated for this spending (as opposed to Social Security, for which there is a dedicated fund); if these costs are accounted for, unfunded liabilities exceed $100 trillion dollars.
  4. See http://people-press.org/files/legacy-questionnaires/4-26-11%20Topline%20for%20release%20with%20joint%20WaPo%20deficit%20questions.pdf.