BEYOND THE NUMBERS
Michigan lawmakers are considering signing on to an interstate compact that would write a series of imprudent provisions into the U.S. Constitution related to the national debt, spending, and taxes. The compact, which a group called Compact for America is promoting and other states will likely consider in the coming year, would:
- Establish an arbitrary constitutional limit on the national debt. The compact sets the debt limit at 105 percent of whatever the debt happens to be on the day the compact takes effect. That ignores the fundamental question of how much debt is appropriate.
- Grant the President unprecedented powers, upsetting the basic “checks and balances” system that has served the country well. If the debt approaches the limit, the compact empowers the President to decide how to cut spending to avoid exceeding the limit and requires the President to impose those cuts under threat of impeachment. With this extraordinary new power, the President could slash programs he or she didn’t like, radically change the rules for certain programs, or take other actions – all without congressional approval. Congress would have only 30 days to pass an alternative plan, which it would find extremely hard to do, especially if neither party controlled both the Senate and House.
- Weaken the country’s ability to respond to a major war or other emergency. Under the compact, the only way to exceed the debt limit – even in times of war, depression, or natural disaster – is for both houses of Congress to pass legislation seeking state approval and for a majority of state legislatures to grant it within 60 days, without conditions. Requiring this extraordinary process even in dire emergencies would be extremely foolish and could cause serious harm to the country and its people.
- Unwisely restrict tax changes. The compact bars the federal government from raising taxes or establishing almost any new tax without a two-thirds vote of both houses of Congress – an extremely high bar. Allowing a small minority of lawmakers to block needed tax changes (or hold them hostage to win support for their own pet projects) would promote dysfunction in Congress and make it much harder to invest in the schools, roads, and other infrastructure that form the foundation of a strong economy. It also would largely prevent Congress from establishing new, more modern forms of taxation in response to economic, technological, and other changes.
Fortunately, a series of unlikely events must occur for the compact to take effect. First, 38 states must enact identical bills endorsing it; only four have so far. Second, Congress must certify the compact, which will be a tough sell since, for one thing, it would significantly reduce Congress’ power. Third, the President must sign off on the compact, too. That’s another major hurdle, given that the compact’s harsh spending restrictions would greatly diminish the President’s ability to meet the country’s needs, let alone champion new investments.
Finally, legislators still would need to meet at a constitutional convention – the first since 1787 – to pass the compact and avoid the temptation to alter the Constitution in other, unpredictable ways. While the compact lays out ground rules for a convention, delegates may be able to change those rules after a convention opens because the Constitution provides for no power above that of a constitutional convention itself.
But even apart from the risk of a “runaway convention,” the compact itself would radically alter the country’s future for the worse.
Senior Vice President for State Fiscal Policy and Co-Leader of the State Fiscal Policy Division