States Can Unite to Rein in Feds on Spending

By Nick Dranias


Goldwater Institute

Georgia legislators, like so many across the nation, understand the challenges – and requirement – that they balance the state budget. Unfortunately in Washington, as Yogi Berra would say, every budget is déjà vu all over again because Congress has forgotten the definition.  

Recognizing that Washington will never reform itself, states are realizing they must reach out from home turf to rein in a Congress that, encircled by entrenched interests favoring the endless growth of government, has lost sight of home and the hardworking Americans behind the tax dollars it gambles.

It’s up to the states to organize and change the rules of the game, exercising their ultimate power: to originate constitutional amendments under Article V of the U.S. Constitution, through a convention of the states. And it’s time to advance a Balanced Budget Amendment to make debt truly scarce for the federal government.

Unlimited debt is the fairy dust that creates the illusion of limitless resources. When the illusion of limitless resources exists, it becomes impossible to persuade politicians that the federal government should have a limited role in our lives. Worse, politicians shift the costs to non-voting future generations. There is no effective political check on such behavior except to impose a strong constitutional limit on the use of debt. That’s why Georgia Reps. Paulette Braddock and Andrew Welch are leading an effort called the Compact for a Balanced Budget.

The Compact – agreement – would unite the states behind a powerful balanced budget amendment for the federal government. The proposed amendment would define a balanced budget in common sense terms: Cash flow out must match cash flow in. By definition, deficit spending would be out of balance and would be limited by a constitutionally imposed debt limit. That debt limit would not be in the hands of Washington alone; it could be increased, but only with the approval of a majority of state legislatures acting as an outside board of directors.

The amendment avoids a game of chicken over debt limit increases by requiring spending impoundments when borrowing reaches 98 percent of the debt limit. Finally, the amendment would quell fears of across-the-board tax increases by requiring any new income or sales tax to secure two-thirds approval of both houses of Congress, except measures that close loopholes or completely replace the income tax with an end-user sales tax.

Using a Compact as the vehicle for this reform promises to transform the state origination of a federal Balanced Budget Amendment into a “turn-key” operation. It allows the states to agree in advance to the entire amendment process – from the text of the proposed amendment, to the application to Congress, to delegate appointments and instructions, to the selection of the convention location and rules, to the ultimate legislative ratification of the amendment. The Compact makes the amendment process roughly equivalent to a ballot measure requiring concurrence of simple majorities of Congress and 38 states.

Not only that, but as soon as two states join the Compact, a commission is formed to expand its membership and advance the Balanced Budget Amendment it carries. With Georgia’s leadership, the commission would provide a unified platform from which to cheerlead legislative champions and to resist any effort to oppose reform.

How serious are Georgia legislators? The Compact for a Balanced Budget is in Georgia’s blood. In December, Georgia legislators were among a group at George Washington’s home, Mount Vernon, for a historic meeting to discuss the procedures that would govern a convention for proposing amendments under Article V of the U.S. Constitution. Although it was rescinded in 2004, nearly 40 years ago, in 1976, Georgia’s General Assembly voted to ask Congress for a convention to propose a constitutional amendment requiring a balanced federal budget. Just last year, Georgia’s Senate passed SR 371, a resolution renewing its application to Congress. This year, a new organization called the “Convention of the States” is expected to push for a wide spectrum of important constitutional reforms.

By passing the Compact for a Balanced Budget shoulder-to-shoulder with these parallel efforts, Georgia would send a strong signal to Washington that it just won’t quit. It would also show the world that Georgia takes our Constitution seriously.

After all, our Constitution was ratified because the states were told that they could reform Washington through constitutional amendments. In Federalist No. 85, for example, Founding Father Alexander Hamilton promised the states that they could “rely on the disposition of the State legislatures to erect barriers against the encroachments of the national authority” through state-initiated constitutional amendments. Federalists made similar promises during most ratification conventions. With our future increasingly mortgaged by limitless debt spending, it is high time that we enforce those promises.

With Georgia’s leadership, the Compact for a Balanced Budget would do just that.

Nick Dranias is Director of Policy Development and Constitutional Government at the Goldwater Institute. Dranias led the Institute’s successful challenge to Arizona’s system of government campaign financing to the U.S. Supreme Court. Dranias also serves on the board of Compact for America, Inc., which is urging the states to advance a Balanced Budget Amendment using an interstate compact.

The Georgia Public Policy Foundation is an independent think tank that proposes market-oriented approaches to public policy to improve the lives of Georgians.  Nothing written here is to be construed as necessarily reflecting the views of the Georgia Public Policy Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (January 17, 2014). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.