Balanced budget amendment

A balanced budget amendment (BBA) is a proposal to amend the U.S. Constitution to require that federal spending not exceed revenue in a given year, or that spending be capped as a share of the economy, with exceptions such as war or a supermajority vote to override. Most states have some kind of balanced budget requirement in their constitutions or laws.

Versions have been introduced in Congress since the 1930s. The House passed one in 1995 but it fell one vote short in the Senate, and later attempts failed. Amendments require a two-thirds vote in each chamber and ratification by three-fourths of the states, or a convention called by two-thirds of the states, which has not been used. Several states have passed resolutions calling for a convention on this topic.

Supporters, mainly conservatives, say that it would impose discipline that ordinary politics has failed to provide. Critics, including many economists, argue that it would make recessions worse by forcing spending cuts or tax increases when the economy is weak, would shift power to courts and might encourage accounting tricks; others note that Congress can already balance the budget by law. Related fiscal rules include PAYGO and sequestration, and the problem it aims to address is the budget deficit.