While campaigning for the presidency, Ronald Reagan talked about the “misery index,” the number obtained by adding the inflation and unemployment rates. Reagan promised to bring the bad numbers down and to lower taxes and balance the budget at the same time. While taxes were reduced, and interest rates, inflation, and unemployment began falling toward the end of Reagan’s first term, to the president’s extreme displeasure, budget deficits got worse. Some saw the solution as a constitutional amendment for a balanced budget.

In the summer of 1982, the amendment passed in the Senate by a vote of 69 to 31 but received less than the necessary two-thirds majority in the House. Although tax reductions eventually increased revenues, the huge increases in defense expenditures, and increases in congressional spending by Republicans and Democrats on pet projects produced record deficits during Reagan’s years as president.