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GOP supports balanced federal budget Amendment

January 30, 2014

LANSINGMSU experts weighed in Thursday on Republican state lawmakers’ plan to add a balanced budget to the U.S. Constitution, testifying before the House Financial Liability and Reform Committee.

Republicans are looking to join a litany of other states in arguing for an amendment that would limit the federal government’s spending to the amount it earns from tax revenue, a plan that Gov. Rick Snyder first unveiled in his State of the State address earlier this month.

With only 14 more states needed to petition for a balanced budget amendment to the United States Constitution, Michigan is on its way.

MSU economics professor Charles Ballard attempted to dissuade the committee members, arguing the proposed amendment would worsen economic crises.

“To require a balanced budget in every year is, in my view, a bad idea because it would exacerbate downturns in the economy,” Ballard said.

“If we were to have a recession, insisting on balancing the budget in a recession year, or even in several years after the recession, could turn a mild recession into a deep one, and could turn a deep one like what we just had into a truly catastrophic downturn.”

Ballard said that although he is concerned with the debt and it is important to address the issue, calling a constitutional convention is “not the best way to do it.”

“It is possible, without a balanced budget amendment, to balance the federal budget,” he said. “We did it in four years. We did it in Bill Clinton’s second term.”

A convention is one of the two prescribed ways to change the Constitution, although it has never been used.

It would require two-thirds of the states to submit applications.

MSU law professor Brian Kalt appeared before the committee to describe what the convention might look like.

“The process of calling an Article V Convention is uncharted territory,” Kalt said. “In Article Five of the U.S. Constitution, there is a process for the states to use. States have attempted to reach the two-thirds majority to have one of these conventions called but it has never happened.”

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