Detrimental to our most important programs.

The balanced-budget amendment would force unthinkable spending cuts and threaten Social Security, Medicare, Medicaid, and other critical priorities No program would be protected from these severe cuts, including bulwarks such as Social Security, Medicare, and Medicaid. Under the proposed amendment, Social Security and Medicare to maintain benefits if the government, as a whole, were running a deficit. What might this look like in practice? The proposed amendment would take effect in the fifth fiscal year after its ratification. For example, if it were enacted in FY 2018, it would take effect in FY 2023. That year, the that government revenues will fall 23 percent short of government outlays. This means that without tax increases, reaching a balanced budget would require slashing the government budget by nearly one-quarter. If done across the board, without exempting the military or any other function, that would slash Social Security by $308 billion, Medicare by $239 billion, and Medicaid by $114 billion in a single year alone. And cuts would be even more drastic if the economy falls into a recession. Federal government revenues can be volatile during economic downturns. For example, in less than a year following the collapse of Lehman Brothers in September 2008, the federal government’s projected revenue for FY 2009 dropped by 15 percent—and this is not even counting the effect of tax cuts Congress passed in response to the economic crisis. If that kind of scenario repeats itself, Social Security benefits and other government spending would have to be cut by 35 percent, if done across the board. That would be devastating for those who rely on Social Security and other government programs and, as discussed below, potentially catastrophic for the economy. With a constitutional balanced-budget requirement and many lawmakers to oppose tax increases under any circumstances, there is no realistic scenario where Social Security, Medicare, and Medicaid escape unscathed.