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and libertarians yet again. It is not just the $328 billion dollars the Obama Administration borrowed 24 hours after the shutdown ended. It is not only because the ReidMcConnell deal essentially empowers President Obama with limitless borrowing authority until February 8, 2014. And it does not matter that the Party Elite sided with Senators McCain and McConnell, rather than Lee and Cruz, in the preceding dust up. Republicans failed us because the premise of their fight was wrong. All sides looked to Washington to reform itself—either immediately or after the next election. But where Reagan, Gingrich and Bush failed under far more favorable circumstances, we cannot seriously think anyone can succeed today. As we ponder the graveyard of the Reagan Revolution, the Contract with America, and Compassionate Conservatism, we must recognize that Washington will never fundamentally or permanently reform itself. Its denizens are too distant from the Heartland. They are too encircled by entrenched interests that favor the endless growth of government. They are too tempted by the concentration of limitless power. Not since the New Deal has there been anything close to a level playing field in Washington for advocates of limited government ideas. It is and has been profoundly mistaken for conservatives and libertarians to bank on any Washington-centric strategy for restoring our Republic. Instead, we should have brought, and now must bring, the fight to our home turf—the States; and we need to do more than a rear-guard action of resisting federal overreach through state-by-state litigation and legislation. We must organize the States to change the rules of the game by exercising their ultimate power to originate constitutional amendments. Only by amending the Constitution, and sidestepping the rigged game produced by the New Deal revolution, can we restore our Republic. The counter-revolution should begin by advancing a Balanced Budget Amendment that makes debt truly scarce for the federal government. This is because, more than any other policy, unlimited debt spending is the source and enabler of an ineffective, overstretched and overreaching federal government. The power to incur limitless amounts of debt is what enables politicians to get away with promising to spend limitless amounts of money. Simply put, unlimited debt is the fairy dust that creates the illusion of limitless resources. When the illusion of limitless resources exists, it becomes impossible to persuade politicians—and increasing numbers of Americans—that the federal government should have a limited and sustainable role in our lives. Moreover, many politicians use unlimited debt to buy political advantage 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. That’s why 49 state constitutions have some sort of debt limit or balanced budget requirement. Throttling back limitless debt spending is the only way to create a structure that forces a debate over the proper priorities and sustainable functions of the federal government that will otherwise be easily evaded. That’s why Thomas Jefferson lamented fewer than ten years after the Constitution was ratified, “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.” Sadly, as most recently illustrated by the Reid-McConnell deal, Washington has not and will never control its addiction to debt. Fortunately, the Founders gave us the power to cure Washington’s addiction in Article V of the United States Constitution. Article V empowers state legislatures to originate constitutional amendments through a convention of the States. In Federalist No. 85, Alexander Hamilton reassured the States that they could “rely on the disposition of the State legislatures to erect barriers against the encroachments of the national authority” through state-initiated constitutional amendments. Federalists made similar arguments at various ratification conventions. Because of this “closing argument,” the Constitution was eventually ratified. It is high time for us to prove Hamilton right. But to have a real shot at success, we need to step away from a rote application of the language of Article V, which would require thirty-four states to apply for Congress for a convention; Congress to call the convention; at least twenty-six states to appoint delegates; a convention to deliberate and propose an amendment; Congress to refer the amendment for ratification; and thirty-eight states to ratify the amendment in convention or through their legislatures. We just do not have time to muddle through a process that requires the passage of at least 100 legislative enactments across numerous distinct legislative sessions, which would likely take ten or more years to generate a Balanced Budget Amendment. That was a legislative quest that even President Reagan and Milton Friedman could not complete in the 1980s. Instead, we need to upgrade to “Article V 2.0”—what the Goldwater Institute calls the “Compact for America.” Using an agreement among the states called an “interstate compact,” Compact for America invokes Article V of the United States Constitution to advance a powerful Balanced Budget Amendment. The amendment would define a balanced budget in commonsense terms: cash flow out (spending) must match cash flow in (taxes). By definition, deficit spending would be out of balance and would be limited by a constitutionally-imposed debt limit. That debt limit would not be Washington’s to fiddle with alone; it could be increased, but only with the approval of a majority of state legislatures—acting as an outside board of directors. The amendment avoids a game of chicken over debt limit increases by requiring the President and Congress to start designating spending impoundments when spending reaches 98% of the debt limit. It imposes real consequences for bad behavior—any violation of these obligations and limitations by the President is deemed an impeachable misdemeanor. Finally, the amendment would quell fears of across-the-board tax increases by requiring any new income or sales tax to secure twothirds approval of both houses of Congress, excepting measures that close loopholes or completely replace the income tax with an end-user sales tax. Strong medicine, yes. But nothing less than the strongest medicine will cure Washington's debt spending addiction. Of course, two-thirds of each house of Congress would never propose this amendment. That’s where “Article V 2.0” comes in. Compact for America consolidates everything Congress and the States do in the Article V process into just two overarching pieces of legislation—one congressional resolution and one interstate compact joined by thirty-eight states. The interstate compact allows the States to agree in advance to all elements of the Article V amendment process—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 BBA. Simple majority passage of a single
concurrent resolution in Congress would consent to the compact and set the amendment process inexorably in motion to its conclusion. Compact for America thereby promises to transform the state origination of a Balanced Budget Amendment into a “turn-key” operation. It makes the process roughly equivalent to a ballot measure requiring concurrence of simple majorities of Congress and thirty-eight states in a single legislative session each. Not only that, but as soon as two states join the Compact, a Commission is formed by the Compact, which has as its organizing purpose the job of expanding membership in the Compact, organizing the eventual Article V convention, and enforcing the Compact’s laser-focus on advancing the Balanced Budget Amendment it carries. The Commission does not dissipate with the winds of political change. It does not disappear. It only disbands when the objective of ratifying the Compact for America's Balanced Budget Amendment is fulfilled. The Compact Commission also keeps a watchful eye on Congress during the process. It provides a unified platform for member states to cheerlead Congressional advocates—and criticize, challenge, and resist any effort by Washington to oppose the Compact or subvert the Article V process. It serves as a constant reminder that Washington’s fiscal irresponsibility is the impetus behind the organization of a parallel institution whose sole purpose is to limit Washington's power by amending the Constitution. Compact for America won’t dissipate like past Article V efforts or the resolve of the Party Elite. It will be a thorn in the side of the Political Class that won’t go away until the job is done. The mere existence of its Commission will cause Washington to look in its rear view mirror, behave more responsibly, and observe existing limits on its power more diligently than otherwise—if for no other reason than to avoid inspiring duplicative efforts organizing around other important issues. In short, Compact for America brings institutional commitment to rewriting the rules of the post-New Deal game that will match Washington’s commitment to unlimited power and fiscal irresponsibility. Advocates of limited government finally have the vehicle to positively change Washington from the States in concert with—but not in subordination to—our congressional champions. Next time, let’s roll with the states before cruising with Ted.
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