Congress proposes constitutional straitjacket on federal spending

What it does

This proposed constitutional amendment would require the federal government to balance its budget each year unless Congress votes by supermajority (two-thirds) to run a deficit. It also caps total federal spending at 18% of GDP unless Congress again votes by supermajority to exceed that cap, requires any tax increase to pass by two-thirds majority, and prevents courts from ordering tax increases to enforce the amendment. The amendment would take effect five years after ratification and includes narrow waivers for declared wars or imminent military threats.

Why we flagged it

This is a structural constitutional amendment that imposes mandatory budget-balancing rules and supermajority voting thresholds on federal spending and taxation. It is not a routine appropriation or policy bill, but a foundational governance mechanism.

What the text implies

• The 18% GDP cap is a hard ceiling on federal spending relative to economic size. If GDP shrinks (recession), the cap shrinks in absolute dollars, potentially forcing automatic spending cuts during downturns when demand for safety-net programs rises—a pro-cyclical fiscal brake that could deepen recessions.
• Section 4's tax-increase supermajority applies only to NEW taxes or rate increases, but explicitly excludes revenue gains from LOWERING tax rates. This asymmetry means tax cuts can pass by simple majority, but tax increases require two-thirds—structurally biasing fiscal policy toward lower revenue and larger deficits over time.

The full analysis lists 5 implications of this text.

Who stands to gain

bond markets and creditors (lower long-term debt risk); fiscal-conservative advocacy groups