As we approach the August 3 deadline set by the Obama Administration, the ridiculous nature of the entire debt limit would be a source of considerable amusement if not so serious. On or about the deadline, Congress will pass some sort of extension and the President will sign it into law at a level neither of them have any intention to honor. That will result in another performance of the debt Limit Two Step in 18 to 24 months. In truth, the national debt limit is utterly meaningless given congress has the ability to simply raise it to facilitate the annual budget shortfall whatever that may be. It would be as if you had the ability to raise the spending limit on your credit card whenever you bumped into that limit. It is simply ridiculous.
To be of any effect, the national debt limit must have real meaning which would force the congress to manage its annual budget within a fixed limit of unfunded expenditures. Some have suggested a maximum level of debt to GDP as a way of limiting the total level of debt. While this has some merits, it provides an administration incredible incentive to modify or tamper with the calculation of GDP, or to fuel inflation to increase the nominal amount of debt available to fuel their spending. The reality is there needs to be an ability to increase the debt limit; it must however be much more inflexible than the budget process the debt limit should be driving.
While in general I do not support legislating by way of the constitution, the primary purpose of that document is to define how the government should function and thus it is only right that the process by which the debt limit is raised should be defined by way of an amendment to the constitution. My proposed amendment would provide two ways by which the debt limit could be increased, both reinforcing the federal nature of our government and imposing upon the Congress and the President a limit they simply could not change at their own whim.
Part 1 would require the Congress to pass a change in the debt limit my way of a two thirds majority vote of both the Senate and the House of Representatives. Upon passing any debt limit modification, the resolution would then be forwarded to the states and would require the approval of the legislatures of 50 percent plus one of the states representing at least 50 percent of the population of the United States as at the most recent census. At neither the national of state levels would executive (President or Governor) approval be required.
Part 2 would allow any state’s legislative branch to propose a change in the national debt limit, and if adopted by two thirds of the states representing at least 50 percent of the population, that modification of the limit of the national debt would come into force. As with part 1, no approval would be required by any national or state executive. In this case the federal government would have to function within the debt limitations imposed upon it by the states, the people’s democratically elected representatives at a much closer level.
Such an amendment would make the limit on total debt financing available to the federal government a real constraint on spending. Part 1 would allow the congress to initiate changes they viewed as essential and an opportunity to convince a majority of the people’s state represent ivies of the validity of the change. Part 2 would allow the peoples elected representatives at the state level the ability to restrain the federal government’s ability to mortgage the nation’s future. In no way would this control federal spending so long as such programs are funded. It would however made the national debt a truly limited funding option controlled by elected officials representing the people other than those spending the money.
Is this radical? Absolutely. Would it allow the federal government to function? Absolutely, so long as they spend within their ability to pay for the expenditures with current revenue or to convince the states of the rational to increase the nation’s total indebtedness. The current system of unlimited deficit spending threatens the very existence of the republic; radical change is required to preserve our nation’s future.