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Take a Shot at the Compact's Balanced Budget Amendment!

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With the input and peer review of numerous statesmen, legal, historical and fiscal experts, we at Compact for America believe that the Compact for a Balanced Budget advances the most transparent, non-gameable, non-partisan, plausible and powerful federal Balanced Budget Amendment ever yet proposed. We think there is no doubt that it will vastly enhance fiscal responsibility at the federal level compared to the status quo of unlimited borrowing capacity.

Yes, that is quite a claim. Perhaps, dear reader, you are just a wee bit skeptical. We don't blame you! It is prudent to trust but verify. And in that spirit, we invite you to review the following sectional analysis of the balanced budget amendment and challenge us to prove our claim!

Please use the comment section of this blog to put us to our proof. Show us where you think the proposed Balanced Budget Amendment might fall short and we will respond to your claims calmly, patiently and respectfully!


“Section 1. Total outlays of the government of the United States shall not exceed total receipts of the government of the United States at any point in time unless the excess of outlays over receipts is financed exclusively by debt issued in strict conformity with this article.”

Intent of provision: Federal spending is limited to tax cash flow with the sole exception of borrowing under the debt limit specified in Sec. 2.

We challenge all readers to show us how this provision could fall short of its intent.

“Section 2. Outstanding debt shall not exceed authorized debt, which initially shall be an amount equal to 105 percent of the outstanding debt on the effective date of this article. Authorized debt shall not be increased above its aforesaid initial amount unless such increase is first approved by the legislatures of the several states as provided in Section 3.”

Intent: The federal government’s currently unlimited borrowing capacity is limited to 105% of the total outstanding debt.

We challenge all readers to show us how this provision could fall short of its intent.

“Section 3. From time to time, Congress may increase authorized debt to an amount in excess of its initial amount set by Section 2 only if it first publicly refers to the legislatures of the several states an unconditional, single subject measure proposing the amount of such increase, in such form as provided by law, and the measure is thereafter publicly and unconditionally approved by a simple majority of the legislatures of the several states, in such form as provided respectively by state law; provided that no inducement requiring an expenditure or tax levy shall be demanded, offered or accepted as a quid pro quo for such approval. If such approval is not obtained within sixty (60) calendar days after referral then the measure shall be deemed disapproved and the authorized debt shall thereby remain unchanged.”

Intent: A referendum of state legislatures is required to approve any increase in the debt limit set by Sec. 2. This provides flexibility for emergencies but ensures the federal debtor will no longer have the unilateral power to set its own credit limit.