Federalism

A Balanced Budget Amendment Could Put America on a Sustainable Fiscal Path

One of the highlights of ALEC’s virtual Annual Meeting was a workshop featuring former Wisconsin Governor Scott Walker, OH Senate Majority Leader Matt Huffman and David Biddulph, co-founder of Let Us Vote for a BBA. The trio was laser-focused on the fiscal sustainability that a balanced budget amendment (BBA) to the US Constitution could bring. Watch a video of the workshop here.

While each panelist had a preferred pathway toward a BBA, all three agreed that with the national debt closing in on $27 trillion and record levels of federal spending being advanced by both parties in Congress to mitigate the economic effects of the pandemic, the United States is running out of time to address this existential crisis. As Senator Huffman observed, it is time for all Americans to reject “infighting” in order to meet this challenge, and that we need “more robust state legislative involvement in this process.”

Governor Walker echoed this sentiment, referencing President Ronald Reagan’s first inaugural address: “The federal government did not create the states; the states created the federal government.” Governor Walker also reminded state lawmakers that they not only have the possibility to amend the Constitution when appropriate but the responsibility to do so, a sentiment that Walker also expressed in this Washington Times opinion piece. ALEC has long supported an Article V convention of the states to propose a BBA, adopting model policy and publishing Article V: A Handbook for State Lawmakers in 2011, which was revised in 2016.

David Biddulph’s perspective on a convention of the states to propose a BBA is unique and differentiated him from the others. Citing research by ALEC Board of Scholars member Rob Natelson that appeared in the Federalist Review, Biddulph proposed that Congress should be required to aggregate open Article V applications with BBA applications. This would push the application total up to the 34-state (2/3 of the states) threshold for Congress to call a convention of the states. He also called for the mode of ratification to be by state convention with delegates elected directly by the people of each state – a method that has been used only once for the 21st Amendment to repeal prohibition. Every other constitutional amendment has been ratified by state legislatures. Biddulph’s presentation can be found here.

Highlighting the threat posed by America’s national debt (now higher than every industrialized economy except Portugal, Greece, Japan and Italy) is a valuable exercise in fiscal responsibility. Raising the profile of an Article V convention of the states as a tool available to the states to drive national initiatives, including to propose a BBA, is an important contribution to the popular discourse. It also underscores the power of America’s system of federalism to address our nation’s most intractable challenges.

From the Brookings Institute to The Heritage Foundation to the International Monetary Fund (IMF), apprehension over America’s unsustainable fiscal course is rising. On July 31, Fitch, one of the big three credit rating agencies, became the latest to sound the alarm revising the United States’ Outlook to negative due to “the ongoing deterioration in the U.S. public finances … [Fitch] expects general government debt to exceed 130% of GDP by 2021.” Last month’s ALEC workshop provides one potential solution for America’s debt crisis.

Note: An Associated Press article about the workshop was picked up by newspapers from Washington, DC to San Francisco, CA. The article contained several inaccuracies which were addressed by David Biddulph here.


In Depth: Federalism

Genuine accountability to hardworking taxpayers results when state and local legislators work with members of the community to determine a plan of action that is right for each individual state, city or town. Real solutions to America’s challenges can be found in the states – America’s fifty laboratories of democracy …

+ Federalism In Depth