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Compact for America: Using the States to Fix Washington
As we’ve seen during Republican administrations and Democrat administrations, and with Republican congresses and Democrat congresses, Washington, DC refuses to fix its addiction to spending. During “conservative” George W. Bush’s two terms, the debt jumped by $4.9 trillion, and during “progressive” Barack Obama’s term (so far), it has jumped $8.2 trillion.
Looking at our nearly $19 trillion hole and with no end in sight to deficit spending, many limited government fans have decided that any solution to the Beltway can’t come from the Beltway. So, Marco Rubio caused a minor stir last week when he floated an idea that has been circulating in the right-leaning policy community for the past few years: Having the states leverage the power given to them by the Constitution.
“One of the things I’m going to do on my first day in office: I will announce that I am a supporter, and as president I will put the weight of the presidency behind a constitutional convention of the states,” Rubio said, “so we can pass term limits on members of Congress and the Supreme Court and so we can pass a balanced budget amendment.”
In theory, a convention of the states is an excellent idea. And the Constitution allows the states to check and balance the power of the Federal government, just like the White House and Congress were designed to check each others’ power. But many observers are understandably skeptical about calling a convention. Not only would it be exceedingly difficult and time-consuming, it also opens the door to all kinds of changes to our nation’s founding document:
Help me with the math here. To call a convention, you need 34 states to agree; to ratify new amendments at that convention, you need 38 states. Mitt Romney won 24 states in 2012. Even in a best-case scenario in 2016 for the GOP, you’re probably looking at 20 solidly blue states, which means you’re four short of what you need to call the convention and eight short of what you need to actually get things passed. On the one hand, that daunting math should calm fears of liberals going nuts at a convention and repealing the Second Amendment, carving out exceptions to the First, and so on. Even if they can find 30 blue states to support that, they’d still need eight red ones to join them in order to enact the proposals. Not going to happen. The only ideas that stand a chance of passing are procedural reforms that enjoy broad bipartisan support, like term limits for Congress.
On the other hand, apart from term limits, how many other reforms enjoy such sweeping cross-partisan enthusiasm that blue states would not only agree to join a constitutional convention aimed at them but to help conservatives pass them? If you think the left is going to go for a balanced-budget amendment, I fear you’re kidding yourself. The BBA may poll well in the abstract, but wait until the media starts digging into it and Democrats start shrieking about conservatives’ “evil scheme” to destroy Medicare by capping federal expenditures at revenue levels. A balanced-budget amendment is about restraining the power of the federal government to grease special interests by spending beyond its means. Why on earth would the modern Democratic Party agree to something like that?
These criticisms are sound. Thankfully, there’s a far better way for the states to fix Washington’s excesses: the Compact for America. I had the opportunity to visit a conference last month on this effort and learned that it’s a sensible, safe, and effective method to get the DC political class back under the control of We the People.
Nick Dranias, the President and Executive Director of Compact for America, explains how it works:
The Compact for a Balanced Budget is an agreement among the states that advances and ratifies a federal Balanced Budget Amendment in a single state legislative bill. It is activated by a single congressional resolution. In essence, the Compact pre-commits 38 states (the ratification number) to the entire constitutional amendment process in advance, so that a specific, pre-drafted federal Balanced Budget Amendment is voted up or down within 24 hours at the convention it organizes. The Compact’s amendment process is set in motion by a congressional resolution, which can be passed with simple majorities and no presidential signature. The congressional resolution both calls the 24-hour convention contemplated by the Compact and pre-selects legislative ratification, avoiding a second trip to Congress.
The compact’s singular focus on balancing the budget prevents any chance of a “runaway” convention in which lawmakers try to undermine our most precious constitutional rights. And by limiting the consideration time to just 24 hours, it will be a quick up or down vote: Do you stand with the people or with the political class?
The text of the balanced budget amendment itself is brief and to-the-point; no thousand-page omnibus here. The concise text will 1) limit the federal government’s borrowing capacity; 2) require state legislative approval for any increase in federal borrowing capacity; and 3) restrain the federal government’s taxing authority.
The amendment also includes three “release valves” for national emergencies: (1) the ability to pay down the national debt to free up borrowing capacity; (2) a referendum initiated by Congress requesting a simple majority of state legislatures to approve a proposed increase in the debt limit within 60 days; and (3) an impoundment process requiring the President to designate necessary spending delays and reprioritizations when a “red zone” of borrowing capacity is reached, subject to simple majority override by Congress.
Four states have already signed on to the document (Alaska, Georgia, Mississippi, and North Dakota) and others are considering legislation.
It’s good that Sen. Rubio drew attention to the convention process, but it is crucial that it be done in the best way. If Americans want to get Washington spending under control in a smooth, timely, and safe manner, the Compact for America is the best choice.
Published in Economics, Law
Go Georgia!
Setting caps on government spending does two things:
That’s why I’m a bigger fan of a BBA than term limits.
I don’t know the Constitutionality of this approach – is this made up from whole cloth? Is there really a chance? I’d love to see it happen, with the provided limits.
I think this convention is the most well intentioned and dangerous plan out there. It fails to address the hypocrisy of state spending issues and reliance on federal borrowing in a reserve currency. Additionally, I think it is naive to assume only principled conservatives will show up for this. Imagine a very well funded battalion of attorneys doing George Soros’ bidding.
I do respect the grassroots outrage, but I fail to see how amending a Constitution we are ignoring is a durable solution.
Fixed it for you.
Democrats have lost nearly 1000 seats in the federal and state legislatures and governorships since Obama took office.
I have to say that the most likely result I see is, if the effort hits 30+ states, that Congress will panic and pass its own BBA. That language would be a heck of a lot more favorable to Washington’s interests, but even discussing fiscal responsibility might promote a positive outcome.
Judges will grab hold of the slightest pretense to shut any of these efforts down.
Doesn’t mean we shouldn’t try, on all fronts.
I am sure we will vigorously go about ignoring it just as hard as we can immediately after its passing.
Great article exJon. I learned a lot. I think when you scratch too deep in state legislatures we are going to find a similar spending addiction as in Washington DC. The compact is still a good eMate point and seems worth pursuing
To me this doesn’t bode well for Rubio’s candidacy. Politicians tend to only take “courageous” stands when they need them.
The problem with any BBA is that it would need to be air tight to keep monetary chicanery from being used to get around it.
I like Rubio’s idea because I think it’s time for a showcase showdown. Let’s put everything on the table and see who wins.
May we live in interesting times.
https://www.youtube.com/watch?v=GIofZ0TlKj4
Why would you believe this?
California has had a balanced budget amendment for over ten years.
Its influence on Sacramento spending has been essentially zero. When the legislative and executive branch are for all intents and purposes lawless, there is ample evidence for this at the federal level, such laws are a joke. Merely words on paper.
Rolling my eyes at Marco on this one.
Most states have balance budget amendments. Most of them run deficits whenever they like. It is too easy to fudge the math as you are comparing projected spending to protected tax receipts.
Just predict 8% growth next year and your budget looks balanced.
Isn’t it time to take another step: shift the programs nearer to the people — to the states and local governments — after sufficient preparation time.
A good example: The Highway Bill. Why not let the states take over funding of highways at the end of this bill’s run? On the surface, every state benefits from highway improvements, but aren’t we perpetrating the most inefficient way of making those improvements — with the corruption, graft,union working rules and D.C. bureaucratic regulations set aside?
Turn the funding responsibilities away from Washington, D.C., and I would predict a better, cheaper highway improvement construction product. In addition, some projects could be dropped (such as bridges in Alaska).
A similar decision could be made with respect to Medicaid, school lunches, other educational funding. In the end, there may be a disproportionate effect on some states, but after adjusting for more efficient spending, an assessment can be made and some problems redressed. If the total, not the relative effect on states, is taken into account and the result is cheaper government, then aren’t we done with the issue.
I look at what happened with the sequester. With the government, it’s the cap itself that leads to some measure of prudence. For you and me, on the other hand, it’s our prudence that leads to setting caps on spending.
Re: California and “words on paper”:
In most red and purple states with BBAs I think we would find that BBAs *do* impose some limits. I can’t speak for blue states.
Interesting thought and perhaps a decent idea although experience with states’ “balanced” budgets indiactes it doesn’t actually mean balanced in any meaningful sense of the term.
My main beef is that this line of thinking obfuscates the issue. As it pertains to economic growth and the right of the people to keep the fruits of their labor, government spending is the issue, not deficits per se. In theory, the budget could be “balanced” while the government collects 50% of GDP and spends 50% of GDP. This would be a huge negative for freedom, liberty and economic growth. Further, why does anyone necessarily think that the effect of a balanced budget amendment would be to reduce spending or contain its growth? What about the children and the people in the shadows after all?? Does anyone actually think that democrats (or some republicans for that matter) wouldn’t “temporarily” increase taxes to balance the budget? And we all know the likely outcome of “temporary” taxes.
If people were actually serious and had a firm grasp of the deleterious effects of big government, they would focus on the overall spending level rather than whether or not the budget balanced.
Term limits and lifetime pensions… Huh…
I sincerely hope one of these efforts works. I keep wondering how the United States would handle a crisis with no real money in the bank.
However, if a balanced-budget amendment were to pass, I would predict two things would happen: (a) Fees would go up on everything imaginable. (b) Service would go down in every conceivable way because the federal government would then have a ready excuse. We would get punished both ways.
I say this because we have a 2 1/2 percent cap on local property tax increases in Massachusetts. The games the cities and towns play are almost funny. What happens with fees is that they are beyond the easy reach of accountants who watch the central tax revenues coming and going.
Leadership and executive management are essential, coupled with citizen involvement with and monitoring of the government. Without those controls, government becomes a cold-hearted, self-serving organization.
I think this is a great point. Budgets can be balanced by cuts or revenue increases. Which one, historically, is more prominent? What makes anyone think that a BBA would force the gov’t to cut spending, rather than increase revenues?
Even pegging the current budget to 3.5% annual increases (or the like) ignores decades of growth, which are now guaranteed to be funded in perpetuity. In fact, I would think that small percentage increase lock-ins would have the effect of cementing existing spending so there’s never any need to discuss whether or not the NEA needs to send grant monies to idiots who have no plans to ever get a real job.
A balanced budget amendment will turn the Democratic party into a war party. The big spenders on the hill will drive a spending truck through the necessary national security exception. The balanced budget amendment is a way to kick tough decisions down the road while posturing. There would also have to be some provision not to raise taxes during a recession when revenues fall. Spending is the problem, not the deficit. You can balance by increasing revenues or cutting spending. Guess which our Congress will prefer. Indeed use the constitutional power of the states to cut spending. Send welfare, education, social spending in general to the states with a decreasing budget approaching zero in less than one election cycle. Some will figure out how to do it without destroying lives, some will just cut and some will become Detroit even faster than Detroit became Detroit.
DITTO!
Compact n. (kŏmpăkt′)
1. A small case containing a mirror, pressed powder, and a powder puff.
That’s what this would be – a kit for putting on make-up.
You would have to balance expenditures to the previous year’s revenues.
The projected budget deficit for 2016 is about half a trillion dollars. So, exactly how do we balance the budget?
We could default on interest payments on the federal debt (after all, since we are not going to borrow any money in the future, who cares about our credit rating?). But that would only get us about halfway there. ($230B in 2015.)
Eliminating 80% of the military would do it.
Slashing social security or medicare payments by 50-60% would do it.
Eliminating all non-military discretionary spending wouldn’t quite get us there.
And, of course, we all know that we can’t tax our way into this, since we are already at a point on the Laffer Curve where higher tax rates do not result in higher tax revenues.
So, a balanced budget amendment sounds great. Just tell me where the half trillion dollars worth of spending disappears. Pesky details.
Isn’t this true of a conventions of states as well?
“The compact’s singular focus on balancing the budget prevents any chance of a “runaway” convention in which lawmakers try to undermine our most precious constitutional rights. ”
Isn’t the use of “runaway”, even in quotes, a sly reference to the other kind of convention; the one a convention of states would not be; the one everyone fears when the topic is brought up?
Indeed.
There is a huge difference between a so-called constitutional-convention and an amending-convention.
Article Five is not the maniacal axe murderer you’re looking for.
Moreover, I am still wondering about all the deference, and regard we harbor for the Constitution, excepting the fifth article thereof. The fifth article is not designed with any less care or understanding than the rest of the constitutional litter that was born in 1787.
I am a constitutionalist. That includes the fifth article.