The Balanced Budget Amendment:
Bad for Women and Children, Bad for America

During an economic downturn, the poor and minorities are among the first to lose their jobs and the last to get them back. Much of the automatic spending on unemployment benefits, food stamps and Medicaid directly benefits the groups most affected by economic downturns. Under the Balanced Budget Amendment, demand for these programs would increase at the same time as pressure to cut spending on safety net programs increases.

The majority of people eligible for safety net programs are women and children:

• 85% of Medicaid recipients are women and children
• 58% of Medicare recipients are women
• 85% of food stamp recipients are women and children
• 68% of Supplemental Security Income (SSI) funds go to women
• 97% of Aid to Families with Dependent Children (AFDC) are women and children
• 100% of pre-natal and child nutrition funds go to women and children
• 84% of public housing assistance goes to women and children

The Social Security system would be irreparably harmed and thrown into chaos:

If the Balanced Budget Amendment includes the Social Security system in its provisions, the system would be thrown into chaos, the payment of benefits could be threatened, and the Trust Fund that provide the system's foundation could be permanently depleted. When people lose their jobs during periods of economic crisis, the payment of payroll taxes goes down. and the Social Security fund receives less income. Under the balanced budget amendment, when the amount of payments overtakes the amount of contributions through payroll taxes, payments must stop. Conversely, during periods of economic growth, any surplus in payments could not be saved for a "rainy day" because, in the year they were used, expenditures would then exceed revenues, putting the budget out of balance.

The amendment would require massive cuts over a very short period of time during a recession:

According to the Congressional Budget Office's assumptions, a recession beginning, for example, in 2000 would cause the deficit to balloon by more than $100 billion by 2002. Under the amendment, the Congress would be required to cut all programs by at least $100 billion in a single year, even though the effects of the recession would disappear in five or six years. Congress is currently struggling with a five or seven year plan to reduce the deficit by roughly the same amount. Such a rapid massive cut in spending would not only have devastating impact on federal programs serving vulnerable populations, it would have a cataclysmic effect on the nationwide economy.