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Take a Bite Out of This Cornucopia of Knowledge-The Ultimate Compact for America Article Aggregation

October 21, 2014

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It's Time for the Grownups to Take Charge of Washington

August 13, 2014

Washington doesn't know how to behave when it comes to spending money it doesn't have. That's why the Compact for a Balanced Budget requires a majority of State legislatures to approve any increase above an initial debt limit. In other words, 26 state legislatures would be required to cosign on the federal government’s credit card.

 

Why state legislatures? Because they are closer to you. State legislators are earlier in their career. Their constituents are more relevant to their own ambitions. You also can find them and give them a piece of your mind more easily than you can influence your U.S. Senator or Congressman. Just try this at home: call your state legislator and ask for a face-to-face appointment. Next try doing the same thing with your U.S. Senator or Congressman-good luck!

 

Of course, some may question the seeming novelty of injecting the states into the national debt debate; but state legislatures should have a voice in whether new federal debt is incurred for the same reason that the U.S. Constitution originally gave state legislatures a voice in the U.S. Senate: a distant centralized authority should not have a free hand in determining the future of every community in the nation.

 

In fact, the contemplated state debt approval process is actually more modest than the Constitution’s original design of the states controlling the U.S. Senate by proxy (before the Seventeenth Amendment). Rather than states controlling half of the whole legislative power of the federal government, with the ability to directly influence all federal affairs, the Compact's BBA targets the states to the specific problem of unsustainable federal debt spending. It empowers the states only in direct proportion to Washington's addiction to debt spending. And if Washington kicks its debt habit, then the states will no longer have the power to intervene directly in the federal budget. Outside oversight and intervention continues only until such time as Washington uses debt responsibly.

 

Equally important, unlike the current and continuous national debt brinkmanship spurred by Washington’s statutory debt limit, the Compact's BBA is designed to force Washington to prepare a budget to make the case for more debt long before the midnight hour arrives. It requires the President to start designating spending to impound when borrowing exceeds 98% of the debt limit. It then requires Congress to override those impoundments within 30 days with alternatives if they disagree. By forcing both the executive and legislative branches to put their cards face-up on the table long in advance of hitting a constitutional debt limit, the BBA would ensure no game of chicken can hold the country’s credit rating hostage.

 

The Compact’s BBA also recognizes that the debt problem is primarily a spending problem. It does this by requiring any new or increased income or sales tax to secure two-thirds approval of both houses of Congress. But the amendment still allows for simple majority approval of increases in tax revenue under limited circumstances. The BBA allows simple majority approval of revenue increases that result from ditching the income tax code in favor of a sales tax. It also allows simple majority approval of revenue increases that result from reducing or eliminating tax exemptions, deductions and credits. And it allows simple majority approval of new or increased tariffs or fees (the original primary source of federal revenue).

 

The Compact's BBA thereby ensures any new tax burden that is assumed to pay down the debt will only result from making our tax code more voluntary, flatter, fairer and far more conducive to economic growth—which is the best way to prevent both debt spending and tax increases in the long run.

 

With a fairer and flatter tax code, the buck stopping at the President’s desk, and the states serving as an active board of directors for our wayward federal executive and legislative branch "CEOs," adults would finally take charge in Washington.

 

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by Nick Dranias

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