The BBV is a novel form of line item veto that would eliminate what always has been the fatal flaw in any balanced budget mandate--the lack of an effective enforcement mechanism favoring spending cuts over tax increases.
The first balanced budget amendment was proposed in 1936, and since then, numerous constitutional mandates to prohibit deficit spending have been initiated in Congress.
The focus of this battle should be the balanced budget veto.
Instead, it creates a mechanism that is flexible enough to permit Congress to cope with genuine military or economic crises, while strong enough to compel a balanced budget in the absence of such situations.
The balanced budget legislation is intended to insure the province continues to live within its means.
The Act has three main divisions: respectively, a balanced budget requirement, retirement of the Province's general purpose debt, and a restriction on tax increases.
The Fiscal Stabilization Fund plays an important role in this legislation by providing flexibility to deal with unexpected fluctuations in revenue or necessary expenditure and still achieve a balanced budget.
Ron Snel, State Balanced Budget
Requirements: Provisions and Practice, National Conference of State Legislatures, forthcoming.
The relevance of the 1932 experience to today's ongoing debate over the Balanced Budget Amendment goes beyond the obvious point that it is foolish to raise tax rates during a depression.
Consider this: If the Balanced Budget Amendment had been in place in 1932, the tax increase enacted at that time would have been in perfect conformity with law.
The time has come when, if the Government is to have an adequate basis of revenue to assure a balanced budget,.
If those targets are not met, the province's balanced budget
legislation will require the shortfall to be made up within the following two fiscal years.