Jerry Nadler: “I oppose this amendment, because we should not write fiscal policy into the Constitution. Of course, we want balanced…”

“I oppose this amendment, because we should not write fiscal policy into the Constitution. Of course, we want balanced budgets most of the time. But it is nonsense to speak of a balanced budget without separating out a capital budget. Every State, every local government, every business has a capital budget and an operating expense budget. The operating budget must be balanced, but the capital budget enables long-term investment, highways, bridges, tunnels to be financed by borrowing. Any family borrows to buy a car or a house. This amendment would prohibit the Federal Government from ever borrowing except in wartime. This is nonsense. Second, budgets should be balanced over time, not every year. In good times, the operating budget should be balanced or have a surplus to pay down the debt. During a recession we should prime the pump, cut taxes, increase expenditures, run a deficit to stimulate the economy, to put more people to work, and to get out of the recession. This amendment would force the Government to violate all we know of economic policy and cut spending during a recession to offset the lower tax receipts generated by the recession. This is a good way to turn a recession into a depression. That is why the Owens amendment which I support would suspend operation of a balanced budget amendment when there is high unemployment.”