Question

Research Washington state’s budget. What is the state policy on having a balanced budget? During the last budget cycle, what were the major item lines to get cut? How did those cuts affect you, your family, your community?

Answer 1

Balanced budget policy tied to shorter economic expansions.

A constitutional balanced budget amendment, however, essentially suspends the automatic stabilizers. It requires that federal programs are cut or taxes increased to offset the automatic stabilizers and prevent a deficit from occurring pulling money out of the economy at exactly the wrong time, the opposite course from sound economic policy.

Major item lines to get cut:

1.Difficulty of Obtaining Waivers

2.Effects on Social Security, Medicare Part A, and Military and Civil Retirement

3.Effects on the Banking System

Establishing a balanced budget amendment in the Constitution would be exceedingly unwise. It would likely exact a heavy toll on the economy and on American workers and businesses in the years ahead and likely make recessions more frequent and more severe. It would involve far more fiscal restraint than is necessary for prudent budgeting.

In addition, it would undercut the basic design of Social Security, deposit insurance, and all other government guarantees. And it is notably more restrictive than the behavior of prudent states and families.