Balanced budget amendment

Balanced Budget Amendment is a constitutional rule requiring that a state cannot spend more than its income. It requires a balance between the projected receipts and expenditures of the government.

Overview

The Balanced Budget Amendment is a proposed federal constitutional rule requiring that the government not spend more than its income. The concept has been proposed multiple times, but has never been ratified. The amendment would require the federal government to not run a budget deficit, limiting expenses to the amount of revenue the government brings in.

History

The idea of a balanced budget amendment dates back to the early years of the United States. The first proposal was made in 1936, but it did not gain significant traction until the 1970s and 1980s, when concerns about the national debt began to rise. Despite numerous proposals and widespread public support, a balanced budget amendment has never been ratified.

Proponents and Critics

Proponents of the balanced budget amendment argue that it would force the government to live within its means, reduce the national debt, and prevent fiscal irresponsibility. Critics, however, argue that it would tie the government's hands in times of economic crisis, when deficit spending may be necessary to stimulate the economy.

State Balanced Budget Requirements

While the federal government does not have a balanced budget requirement, most U.S. states do. These requirements vary in strictness; some states must simply pass a balanced budget, while others are prohibited from carrying over a deficit from one year to the next.

See Also

• Fiscal policy
• Government budget balance
• Government debt
• Deficit spending