Senate Rejects Two Balanced Budget Amendment (BBA) bills

On December 14, the Senate rejected by wide margins a pair of competing proposals for a constitutional balanced-budget amendment. The Budget Control Act required House and Senate votes on a constitutional balanced-budget amendment before the end of the year. Neither Senate resolution obtained the two-thirds majority vote needed for approval, guaranteeing that Congress will not send a constitutional amendment to the states for ratification before year’s end. The Republican version (S. J. Res 10), rejected by a 47-53 vote, would set up a two-thirds majority threshold in both chambers for tax increases and establish a cap for federal spending at 18 percent of the economy’s annual output. The Democratic version (S. J. Res 24), which Senators rejected, 21-79, does not include either a constitutional spending cap or the higher vote threshold for tax increases.  It would take Social Security receipts and outlays off the books for the purposes of the amendment and would prohibit Congress from passing any tax cut for millionaires if the tax cut would yield a deficit. Many economists believe that a BBA would greatly harm the economy by cutting government spending during economic downturns, resulting in deeper and longer recessions.

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