# Understanding the Balanced Budget Amendment Proposal

This proposal would change the U.S. Constitution to require the federal government to spend no more money than it collects in taxes each year. Right now, the government regularly spends more than it takes in, borrowing money to cover the difference—which adds to the national debt. Under this amendment, Congress would have to balance its budget like most families and businesses do, where you can't spend money you don't have.

The amendment calculates the spending limit based on the average amount of taxes collected over the previous three years, adjusted for inflation and population growth. So if the government collected $4 trillion in taxes on average over the last three years, that would roughly be the limit for next year's spending. Importantly, this limit wouldn't apply to paying off existing debt—the government could still make those payments. However, virtually all other government spending would count toward the limit, including Social Security, Medicare, defense, education, and everything else.

There is one major escape hatch built in: Congress could vote to declare an emergency by a two-thirds majority in both the House and Senate, which would allow spending above the limit for one year. This is meant to handle situations like wars, natural disasters, or severe economic crises. Additionally, the amendment wouldn't take effect immediately. It would phase in gradually over nine years, allowing the government to slowly reduce spending if it's currently over the limit, rather than making drastic cuts all at once.

The practical impact would be significant. If this became law, Congress would face difficult choices about which programs to cut, which taxes to raise, or both. Every dollar spent on one program would mean a dollar less available for something else. This could affect everything from military spending to healthcare to infrastructure to federal employee salaries, depending on what Congress chooses to prioritize.

Proposing a balanced budget amendment to the Constitution of the United States.

Arrington, Jodey C.

This joint resolution proposes a constitutional amendment prohibiting total federal expenditures for a year from exceeding the average annual federal revenue collected in the three prior years, adjusted for changes in population and inflation. Expenditures for payment of debt and revenues derived from borrowing are excluded. Congress may authorize specific expenditures in excess of the limit for up to one year by declaring an emergency with a roll call vote of two-thirds of each chamber. The requirements take effect in the first year beginning at least 90 days following ratification, except that expenditures are permitted to exceed the limit by specified amounts during each of the first nine years that the requirements are in effect.