With the national debt approaching $20 trillion, unfunded federal program liabilities estimated at $205 trillion or more, and a return to $1 trillion deficits looming, we have no time to waste when it comes to fixing the national debt.
That’s why the Balanced Budget Compact is good public policy and absolutely essential to protecting the future of our nation and that of Tennessee.
The Balanced Budget Compact is a legally binding agreement among the states to advance and ratify a federal Balanced Budget Amendment in as few as 12 months through a 24 hour convention under the authority of Article V of the United States Constitution. As such, it delivers unparalleled speed, certainty, synergy and safety in uniting the states to fix the national debt.
The Compact delivers unparalleled speed by consolidating everything the states do in the Article V amendment process in one bill, and everything Congress does into one resolution. With Tennessee’s leadership, the support of simple majorities of Congress and just 33 more states can yield a ratified federal Balanced Budget Amendment before the end of next year. Only the Compact makes it possible to fix the debt with the speed our creditors may demand.
The Compact delivers unparalleled certainty by advancing a specific federal Balanced Budget Amendment that you can read today. The amendment limits Washington’s borrowing capacity to 105% of the outstanding debt on ratification and otherwise restricts federal spending to unencumbered cash revenue at all times. It handles emergency borrowing needs with release valves that do not enable easy evasion, such as requiring the approval of a majority of state legislatures for any future increase in its constitutional debt limit. And it encourages spending reductions before tax increases to close deficits. It will create a powerful incentive for Congress to generate balanced budgets and pay down the debt during good times, reserving borrowing capacity for bad times like a rainy day fund.
The Compact delivers unparalleled synergy by supplying all other subject-matter compatible Article V efforts with a fully vetted and pre-ratified federal Balanced Budget Amendment (Alaska, Georgia, Mississippi and North Dakota have already agreed to ratify it). In the unlikely event they get to a convention first, the Compact’s Balanced Budget Amendment can be immediately proposed with a head start on ratification; proving that Article V can work and minimizing the risk that a drafting-style convention might completely bog down.
The Compact delivers unparalleled safety by including 17 safeguards that ensure member states control the convention quorum and limit the Article V convention it organizes to a 24 hour up-or-down vote on its pre-specified federal Balanced Budget Amendment. Nothing else can plausibly happen. The Compact is designed to ensure the bad guys do the right thing even if for the wrong reasons.
We are Greece waiting to happen. Tennessee and its sister states must lead when Washington won’t.
Nick Dranias is the president & executive director of the Compact for America Educational Foundation.
*This is a guest blog post and does not necessarily reflect the views of the Beacon Center.