The Peter G. Peterson Foundation and the Blue Dog Coalition both maintain that a balanced budget amendment eliminates the deficit within the fiscal year, forces Congress to allocate funds on current revenues and prevents the United States from accruing more debt for future generations to pay. Those who favor a balanced budget amendment believe that it solves fiscal issues relating to debt and Social Security.
A balanced budget amendment requires the U.S. Congress to create a budget for the fiscal year with expenditures that equal the forecast of revenues for that same period. The removal of the deficit leads to a decrease in the rate of increase of the national debt. Supporters of the amendment believe that without an annual balanced budget, the rate of the debt is certain to grow to the point that future generations must pay higher taxes. Issues that politicians currently have with spending allocation stem from political and not economic reasons. A balanced budget amendment requires all sides to agree to certain expenditures.
Any balanced budget amendment would require ratification from at least three-fourths of the states per U.S. Constitutional requirements. The states have a set number of years to ratify the amendment before the amendment fails.