Economy & Budget

A plan to compel Congress to amend the Constitution for a balanced budget

A plan to compel Congress to amend the Constitution for a balanced budget

This article originally appeared on heartland.org.

In the 225 years since the Constitution of the United States of America became the guiding law of the land, it has been amended 27 times (including the first 10 amendments that make up the Bill of Rights).

Now there is a proposal to bring states together in a way to speed the arduous process of amending the Constitution to force Congress to balance the federal budget. The proposal calls for “compacts,” or agreements, among the states to use their power under the Constitution to demand a Constitutional convention.

It’s never been done even though the power has always been there, and with the federal government nearing $18 trillion of national debt – and facing hundreds of trillions of dollars of unfunded liabilities such as for Medicare that are not counted in the national debt – the timing could be right, says Nick Dranias, an attorney and Director of Policy Development and Constitutional Government at the Goldwater Institute in Arizona. Dranias is the originator of the idea, which has been refined by other lawyers, a judge and public policy experts.

‘Two Overarching Acts’

“The compact approach consolidates the entire amendment process that the states originate into just two overarching legislative acts,” says Dranias. “First, you have the compact, which is the agreement among the states. All you need to do is have 38 states pass this compact. In the compact are all of the moving parts, legislatively, that they would otherwise control and have to separately enact in various stages.” These include the application for the convention, designation of the contemplated amendment, identification of and instructions to all delegates, rules for the convention and who would attend the convention.

On the Congressional side, says Dranias, legislators would need to pass one resolution with simple majorities in each House calling a convention in accordance with the compact and pre-selecting ratification if the amendment that’s contemplated in the compact is approved. So, in total, 39 legislative acts would be needed: 38 state resolutions calling for the convention and one resolution in Congress. This compares to “at least 100 legislative enactments, six independent legislative stages, and five or more years of legislative sessions to generate a constitutional amendment” without a compact.

Learning from States

Forty-nine of the 50 states have balanced budget requirements, either in their constitutions or statutory, yet many of them have budget deficits and large debts. Dranias says a federal balanced budget amendment could be structured to avoid the “gaming” that many state governments engage in to get around their balanced budget requirements.

He notes few states come anywhere close to being as badly in debt as the federal government relative to their economies.

“Regardless of how effective or not state-based balanced budget amendments and debt limits have been, they do create a political atmosphere of scarcity in the use of debt, and at least of embarrassment, which tends to minimize the use of debt relatively to what we see in Washington,” Dranias says.

Furthermore, “The benefit of observing what does not work in the states is that we can design and develop a better amendment for the federal government, and that’s what we’ve done.

“It’s not hard to defeat most of the fiscal gaming we see in states. The way you do it is you just define the balanced budget requirement in terms of strict cash flow,” Dranias says. “Limit spending to the available cash flow from taxes and from authorized borrowing. Define the amount of authorized borrowing to be a specific line of credit of a specific amount and you don’t give control of the amount of the line of credit to the addicted debtor. You don’t give Congress unilateral authority to increase its own debt limit, because it’s obviously absurd. Instead you have to have some sort of outside intervention, some sort of referendum process to allow Congress to engage in any borrowing. If you do that, you can defeat nearly any possible way of gaming the system, short of outright fraud in accounting.”

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