Final answer:
The statement about revenue neutrality and phasing in tax cuts is False. Achieving revenue neutrality requires offsetting changes to match any tax adjustments. During recessions, Congress uses tax cuts to stimulate the economy, but a balanced budget amendment would restrict this ability.
Step-by-step explanation:
The statement that 'When Congress enacts a tax cut, revenue neutrality is achieved by phasing the change in over a period of years' is False. Revenue neutrality refers to a situation where any change in taxes is offset by other measures to ensure that the overall government revenue remains the same. Simply phasing in a tax cut over several years does not by itself ensure revenue neutrality unless it is accompanied by either corresponding spending cuts or increases in other forms of revenue.
During a recession, Congress often passes tax cuts to stimulate the economy by increasing consumption, leading to a rightward shift in the Aggregate Demand (AD) curve which can result in higher real GDP and lower unemployment. A balanced budget amendment could greatly constrain Congress's ability to enact such tax cuts because it would require that any loss in tax revenue be accompanied by equivalent reductions in government spending or increases in other taxes, which might offset the stimulative effect of the tax cut or even worsen the recession.