Budget amendments pose serious risks --- recessions become deeper and skyrockets unemployment before we realize it --- only repealing now solves.

Kogan 18 [Richard Kogan, 3-16-2018, Constitutional Balanced Budget Amendment Poses Serious Risks, Center on Budget and Policy Priorities, https://www.cbpp.org/research/federal-budget/constitutional-balanced-budget-amendment-poses-serious-risks] laura

A balanced budget amendment to the U.S. Constitution would be an unusual and economically dangerous way to address the nation’s long-term fiscal problems. It would threaten significant economic harm, as explained below. It also would raise a host of problems for the operation of Social Security and other vital federal programs. It’s striking that the House Republican leadership intends to schedule a vote on a balanced budget amendment just a few months after the President and Congress enacted a tax cut that will increase deficits by as much as $2 trillion over the next decade.[1] The economic problems with such an amendment are the most serious. By requiring a balanced budget every year, no matter the state of the economy, such an amendment would raise serious risks of tipping weak economies into recession and making recessions longer and deeper, causing very large job losses. That’s because the amendment would force policymakers to cut federal programs, raise taxes, or both when the economy is weak or already in recession — the exact opposite of what good economic policy would advise. When the economy slows, federal revenues decline or grow more slowly and the cost of unemployment insurance and other social programs increases, causing deficits to rise. Rather than allowing the “automatic stabilizers” of lower tax collections and higher unemployment and other benefits to cushion a weak economy, the amendment would force policymakers to cut programs, raise taxes, or both. That would launch a damaging spiral of bad economic and fiscal policy: a weaker economy would lead to higher deficits, which would force policymakers to cut programs or raise taxes more, which would further weaken the economy. If a such an amendment had been ratified when Congress last voted on these proposals and had been enforced for fiscal year 2012, “the effect on the economy would be catastrophic,” Macroeconomic Advisers, one of the nation’s preeminent private economic forecasting firms, concluded at the time. It would have caused the unemployment rate to double from 9 percent in that year to 18 percent by throwing an additional 15 million people out of work, according to the firm. Not only that, “recessions would be deeper and longer” under a constitutional balanced budget amendment, and uncertainty would be cast over the economy that could retard economic growth even in normal economic times, the analysis concluded.[2] The fact that states must balance their budgets every year — no matter how the economy is performing — makes it even more important that the federal government not also face this requirement and thus further impair a faltering economy. And while most constitutional balanced budget amendments introduced in Congress would allow Congress to waive the balanced budget requirement with a supermajority vote in both chambers, that hardly solves the problem. Recent experience shows the difficulty of securing a supermajority vote in both chambers for almost any major legislation. Moreover, data showing that the economy is in recession do not become available until the economy has already begun to weaken; it could well take many months before sufficient data are available to convince a congressional supermajority to waive the balanced budget requirement, if it were possible to do so at all. In the meantime, substantial economic damage — and large job losses — would have occurred. Beyond the economy, a balanced budget amendment would raise other problems. That’s because of its requirement that federal expenditures in any year must be offset by revenues collected in that same year. Social Security could not draw down the balances it has accumulated in previous years to pay benefits in a later year but, instead, could be forced to cut benefits even if it had ample balances in its trust funds; currently, those balances approach $2.9 trillion. The same would be true for the military retirement and civil service retirement programs, whose balances sum to $1.7 trillion. Nor could the Federal Deposit Insurance Corporation or the Pension Benefit Guaranty Corporation respond quickly to bank or pension fund failures by using their assets to pay deposit or pension insurance, unless they could do so without causing the budget to slip out of balance.