According to the Financial Times, at least one U.S. Senator has declared the nation should jump off the fiscal cliff rather than compromise on a budget that brings the national debt under control.
No wonder why Thomas Jefferson said over two hundred years ago, “I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for their reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.”
With unbridled fiscal brinkmanship in Washington, no doubt the federal government deserves to have its credit cards cut up. But we shouldn’t forget that there is a legitimate role for a reasonable level of debt in responsible hands. That's why the Balanced Budget Amendment advanced by the Compact for America Initiative would do the next best thing: It would require a majority of state legislatures to approve any increase in federal borrowing above an initial debt limit. In other words, 26 state legislatures would be required to cosign on the federal government’s credit card. In addition, to ensure the initial debt limit is respected, the President would be empowered and required to designate spending cuts when 98% of the debt limit is reached. Congress would then be required to override those designations within 30 days with alternative cuts.
Unlike the current national debt brinksmanship, the Compact for America Initiative is designed to force Washington to agree upon a budget that can command a wide national consensus long before the midnight hour arrives. The Compact for America would keep the nation’s credit rating from being held hostage to a game of chicken between the President and Congress. With the states serving as Congress’ fiscal control board, and the buck stopping at the President’s desk, the Compact for America Balanced Budget Amendment Initiative would powerfully check and balance Washington.
This initiative is just the sort of powerful, yet pragmatic reform that could only be originated outside of Washington, D.C. It’s time for the states and the people, led by their Governors, to seize the day.
Financial Times: Don’t Fear the Fiscal Cliff
Compact for America: Home page
U.S. Debt Clock: Home page