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State Compacts

What if states could advance and ratify a powerful federal balanced budget amendment in only 12 months?

The Issue

That could happen with a new approach to state-originated amendments under Article V of the United States Constitution: the Compact for a Balanced Budget. The Compact uses an interstate agreement to simplify the state-originated Article V convention process.

According to Nick Dranias, a leading advocate of this approach, the Compact approach to Article V reduces the number of necessary legislative enactments, stages, and sessions from 100+ enactments to 39 (38 states joining the Compact, one congressional resolution), from six legislative stages to three (passage of compact, convention proposal of amendment, congressional passage of resolution), and from five or more session years to as few as one (the current target is three years).

In addition, Dranias says, the Compact approach eliminates all reasonable uncertainty about the process. It identifies and specifies the authority of the delegates from its member states. It specifies in advance all Article V convention ground rules. It requires all member state delegates to vote to establish rules that limit the agenda to an up-or-down vote on a specific, pre-drafted balanced budget amendment. It disqualifies from participation any member state – and the vote of any member state or delegate – that deviates from that rule. It further bars all member states from ratifying any other amendment that might be generated by the convention.

Thus, from the vantage points of efficiency, public policy, and certainty, the Compact for a Balanced Budget is an upgrade from the non-compact approach to Article V – with one significant caveat. The requirement of such detailed and upfront agreement will probably work only for well-formed reform ideas that likely already command supermajority support among the states and the people. The list of such reform ideas is short.

Before this crucial reform can become a reality, 34 more states must join the Compact (to reach the ratification threshold of three-fourths of the states) and simple majorities of Congress must approve it. This can be done in as few as 12 months.

Policy Takeways

In 2014, Govs. Nathan Deal and Sean Parnell formed the “Compact for a Balanced Budget” between Georgia and Alaska. Subsequently, in 2015, Mississippi and North Dakota adopted the Compact as well.

The Compact for a Balanced Budget now establishes a binding commitment to fix the national debt, spanning the nation from the Atlantic to the Pacific. The formation of the Compact for a Balanced Budget changes the political game.

The Compact for a Balanced Budget Commission – an interstate agency dedicated to organizing a convention for proposing a balanced budget amendment – held its first organizational meeting on January 13, 2015. The Commission is now busy leading the charge for fiscal reform shoulder-to-shoulder with allied legislators, citizens, and public interest groups. It has lent credibility to and ignited support for the effort. And with the introduction of House Concurrent Resolution 26 on March 19, 2015, the Commission is also engaging with Congress on fulfilling its role in the amendment process.

The Compact for a Balanced Budget Commission is an outside-the-beltway organization that can do much more than ponder hypothetical fiscal reforms: It will marshal a state-based effort to propose and ratify a powerful balanced budget amendment.