Proposing a balanced budget amendment to the Constitution of the United States.
Introduced January 13, 2025 · Last action January 13, 2025
Plain English Summary
This joint resolution proposes a constitutional amendment requiring the federal government to balance its budget each fiscal year, unless Congress votes by a two-thirds supermajority to allow deficit spending. The amendment would take effect five years after ratification and would need approval from three-fourths of state legislatures to become part of the Constitution.
Who benefits
Fiscal conservatives and balanced-budget advocates who view chronic federal deficits as economically harmful; holders of U.S. Treasury bonds who may benefit from reduced default risk; taxpayers who support reduced federal spending; Republican members of Congress who have historically championed balanced budget constitutional amendments.
Who pays / loses
Federal employees and beneficiaries of federal programs (Social Security, Medicare, Medicaid, defense, infrastructure, research funding) who would face spending cuts or program reductions during economic downturns; future Congresses constrained in their ability to use deficit spending as a countercyclical tool; state and local governments that depend on federal transfers; low-income households reliant on means-tested federal benefits.
Funding & Lobbying Interests
Balanced budget advocacy is supported by deficit-reduction-focused organizations and conservative think tanks including the Committee for a Responsible Federal Budget and the Cato Institute. No sponsor finance data was provided, but historically, balanced budget constitutional amendments are championed by conservative fiscal policy advocates and some Republican Party donors aligned with limited-government principles.
Political Impact
Affected Groups
All Americans dependent on federal spending: Social Security beneficiaries (66+ million), Medicare beneficiaries (66+ million), Medicaid recipients (72+ million as of 2023), federal employees (2.3 million), active-duty military (1.3 million), and recipients of federal contracts, grants, and subsidies. During recessions, the constraint would limit fiscal stimulus, affecting unemployed workers and economically distressed communities. State and local governments receiving federal aid would face reduced transfers.
Political Subtext
Proponents argue chronic federal deficits drive inflation, crowd out private investment, and burden future generations with unsustainable debt, and that a constitutional requirement forces fiscal discipline. Critics argue that a balanced budget amendment prevents the federal government from using deficit spending during recessions and national emergencies (when revenues fall and needs rise), forces pro-cyclical austerity that deepens downturns, handicaps countercyclical macroeconomic policy, and that the two-thirds override supermajority is so high as to be nearly impossible to invoke during crises. Non-partisan evidence from the CBO and economists across the ideological spectrum shows that pro-cyclical fiscal policy (forced spending cuts in downturns) deepens recessions and slows recovery, though economists disagree on the long-term debt sustainability question.
Real-World Stakes
If ratified, Congress would lose the ability to run deficits during recessions without a two-thirds supermajority vote—a nearly impossible threshold during crises when spending is most needed and revenues are weakest. During the 2008 financial crisis, the federal government ran deficits of 10% of GDP to prevent economic collapse; under this amendment, such action would require two-thirds agreement. The 1990s balanced budget agreement (which aimed for balance but was not constitutional) contributed to the end of deficit spending but occurred during a boom with declining interest rates; similar austerity during downturns has historically worsened outcomes. Colorado's constitutional Taxpayer Bill of Rights (TABOR, 1992) imposed a similar spending cap and led to documented underfunding of schools, roads, and emergency services during downturns. Switzerland's 2003 constitutional debt brake produces structural pro-cyclical bias acknowledged by the Swiss National Bank as problematic.
Sponsor
Sponsor information not available.
Vote Record
No recorded votes.
Campaign Finance — Primary Sponsor
No campaign finance data available yet.
501(c)(4) disclosure: Contributions from 501(c)(4) "dark money" organizations are not required to be publicly disclosed and are not reflected in the figures above. Data sourced from FEC public disclosure filings.
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