Unprincipled politicians use unlimited debt to buy votes today while shifting the costs of their policies to non-voting future generations. There is no effective political check to stop such behavior—except to impose a strong constitutional limit on the use of debt.
This is not a partisan point. It is a policy fact. Our nearly $20 trillion national debt is the proof. Both parties have caused it. Unlimited debt leads to unlimited spending on unsustainable programs—whether foreign or domestic, military or civilian—no matter who is in charge of Washington.
The political class in Washington seems to have forgotten its conscience. We cannot trust the debtor to set its own credit limit. We must impose outside oversight.
The Compact for a Balanced Budget would do just that.
Now being advanced by legislators in Arizona, Arkansas, Alaska and Georgia, the Compact uses an agreement among the states to advance and ratify a powerful balanced budget amendment. The amendment would limit spending to cash flow from taxes except for borrowing from a constitutionally-fixed line of credit—to handle cash flow volatility and emergencies.
To ensure that line of credit is not abused, the core of the Compact’s amendment is a requirement of outside oversight for any proposed increase in the federal debt. Specifically, any increase in the federal debt limit would require approval from a referendum of the states.
By design, the Compact makes the goal of achieving a balanced budget amendment obtainable—not an armchair pipe dream. The Compact transforms the amendment by convention process into a “turn-key” operation, allowing the states to agree in advance to everything it involves – 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. This cuts the number of enactments needed to get the job done under Article V of the United States Constitution by more than 60%. It also prohibits the oft-cited fear of a runaway convention.
With this powerful balanced budget amendment in place, Washington would no longer have the ability to set its own credit limit and write itself a blank check.
The Compact for a Balanced Budget promises the outside oversight needed to restore fiscal responsibility and provides a real remedy for the fiscal damage done by Washington. And it can actually get the job done.
It’s time for Americans to show that restoring our country to fiscal health is not a partisan policy objective.