On Jan. 26, 1995, I batted cleanup and gave the last speech on the floor of the US House of Representatives before the final vote on H.R. 1, the Balanced Budget Amendment, “...for too long the public has wanted unlimited services on limited resources. . .$4.7 trillion of debt, $18,000 dollars for every man, woman and child in the United States...passing a Balanced Budget Amendment will initiate a great debate: just what can, and what should, government do? We need to ask what is good for the country. If we can’t act responsibly with our country’s budget, we will have bankrupted our childrens’ future.. .don’t let the perfect be the enemy of the good...if we fail to pass the Balanced Budget amendment, we will have failed to deliver on the promise we made.”
The Balanced Budget amendment, cosponsored by recently deceased Democrat Texan Charlie Stenholm and Republican Bob Schaeffer of Colorado then passed with a 300 to 132 bipartisan vote, easily meeting the Constitutionally required House two-thirds vote. Unfortunately, after a month of intense lobbying with Democrat Senator Byrd of the Appropriations Committee going toe to toe with Senate Leader Bob Dole, the Senate vote failed by one vote. Six Democrat senators switched their previous votes for a balanced budget amendment to “No.” Had the Senate passed the Balanced Budget Amendment, it would have gone to the state legislatures for ratification by three-fourths. Since all but one state already operated under their own balanced budget state requirements, it is pretty certain to have been added to the United States Constitution.
The Amendment was simple. It prohibited total outlays from exceeding total receipts for a fiscal year, unless three-fifths of the members of each House of Congress voted for a specific excess of outlays over receipts by a roll call vote. It set a permanent limit on the public debt and prohibited an increase unless approved by a three-fifths majority in each House by a roll call vote. The President had to submit a balanced budget. It prohibited increasing revenue, i.e. raising taxes, except when voted for by a majority (the Republicans wanted a higher percentage for tax increases but compromised with Democrats). The provisions of the amendment would be waived for a declaration of war or a military threat as declared by a joint resolution.
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But controlling the rising national debt, as outlined by Ross Perot in the 1990 presidential election and a major focus of the new Republican freshman class in the House, remained a priority. National debt by the free spending previous Congresses had doubled from 34% of GDP in 1980 to 66% of GDP in 1995. This led Speaker Gingrich and our Republican majority to have a standoff with President Clinton over spending and forced a temporary shutdown of the government not once but twice of “nonessential services" thus earning Gingrich the title of “the Grinch Who Stole Christmas” as it was that time of the year.
No one really suffered and the federal workers who had days off received furlough pay. But it sent a strong message that Republicans in the House could take the heat of bad public relations in order to move to a balanced budget. When Clinton saw how committed we were, he moved towards cooperating with us to balance the budget by 2002. This bore fruit. The federal deficit was only $25 billion in the last year of the Clinton-Giongrich era and the national debt had decreased from 66% to 55% of GDP by 2001, the only time since before WWII that the national debt actually decreased.
Every interest group came to my Congressional office saying they knew how important reducing runaway spending was but “just don’t cut mine.” It wasn’t rocket science. We simply spent less than revenues by about 1% each year. Each appropriation was increased in actual dollars but a little less that projected by automatic “baseline” increases. We also trimmed regulations and along with fiscal restraint the economy took off. The resulting lower interest rates reduced interest payments. Welfare reform also reduced expenditures with more people returning to work and paying taxes.
Which brings us to the current debt limit increase fight. The last three presidents along with Congress have been fiscally irresponsible. The national debt stands at $31.46 trillion which at 128% of GDP has doubled in the past 10 years. So much money has been printed by the federal reserve that we have a real inflation problem. Congress increased the debt limit by $480 billion in Oct, 2021 and then again by $2.5 trillion in December, 2021 and is now facing another debt increase.
It is good that the Republican House and President Biden have averted another government shutdown or reneging on national debt interest payments. The Republicans accepted smaller spending cuts and the Democrats didn't just increase taxes or increase the debt limit. However, the deal is meager fare and doesn't deal with fundamental spending problems.
The Treasury calculates our national debt by counting U.S. Treasury bills, notes and bonds. Thus the $31.46 trillion figure one sees bandied about. Unfortunately, this does not factor in the difference between expected future expenditures of Social Security, Medicare, and Medicaid over the next 75 years and expected income from these programs under current law. These unfunded liabilities amount to $70 trillion. The U.S.Treasury justifies not adding these unfunded liabilities to the “national debt” because Congress can change the law!
However, between 2011 and 2021 total obligations to those programs have more than doubled with Baby Boomers retiring. Instead of $31 trillion in national debt we are really on the hook for about $31 trillion plus $70 trillion for the entitlements adding up to a total deficit of about $100 trillion. This impending crisis must be debated by our presidential candidates. Will any have the courage to do so? I doubt it. Instead they brag about not touching entitlements. Little has changed since my 1995 Balanced Budget floor speech, “...for too long the public has wanted unlimited services on limited resources.”
The Balanced Budget Amendment would have made a difference. Until voters elect people who are willing to face up to the coming day of economic reckoning and take votes that may cost them their jobs, as did we members of the GOP House Class of 1994 many of whom self-term limited (and kept their promises), the debt limit dance will repeat and repeat.
Greg Ganske, MD is a retired plastic surgeon who cared for trauma victims, cancer patients, and children with birth defects. He served in the US House of Representatives from 1995 to 2003. He was the Iowa Republican nominee for the U. S. Senate in 2002 and then returned to private practice.
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