This joint resolution proposes a constitutional amendment that prohibits total outlays for any fiscal year from exceeding total receipts for that fiscal year.The amendment also prohibits (1) increases to the federal debt limit, and (2) a bill that increases revenue from becoming law unless the bill has been approved by two-thirds of each chamber of Congress with a roll call vote.
If adopted, this balanced budget amendment could lead to significant changes in how federal budgets are formulated and executed. It would require Congress to enact spending plans that align with actual revenues, which proponents argue would prevent excessive debt accumulation and foster a more sustainable fiscal environment. The potential repercussions include cuts to federal programs, as lawmakers might prioritize spending reductions to comply with the new constitutional mandate.
HJR2 proposes an amendment to the United States Constitution aimed at enforcing fiscal discipline at the federal level. The core provisions of the resolution mandate that total outlays for any fiscal year cannot exceed total receipts, thereby establishing a balanced budget requirement. Additionally, it restricts any increase in the national debt held by the public, effectively capping the country's borrowing limit. This amendment seeks to promote greater accountability and transparency in federal financial management.
The resolution has garnered attention in both financial and political discourse. Supporters emphasize the importance of a disciplined fiscal approach to safeguard future generations from unsustainable debt levels. Conversely, those opposed warn that, in practice, the limitation on fiscal tools available to Congress could exacerbate economic challenges and limit essential public services during periods of need.
Debate around HJR2 might center on the balance between fiscal prudence and the need for flexibility in federal spending. Critics of a balanced budget amendment argue that it could hinder the government's ability to respond effectively during economic downturns or crises, where additional funding might be necessary. Moreover, concerns have been raised that the two-thirds requirement for increasing revenues could make it exceedingly difficult to raise taxes or modify tax policies, potentially stifling economic growth and public investment.
Economics and Public Finance