An Ohio lawmaker is calling for a convention of the states to debate a constitutional amendment requiring a balanced national budget.
State Rep. Kyle Koehler (R-Springfield) is sponsoring a bill to enter Ohio into the Compact for America (CFA), a constitutional convention for the purpose of creating a national balanced budget amendment.
States Lead, Washington Follows
A constitutional convention debating the proposed amendment is called when the proposal is affirmed by 38 states. A previously agreed-upon constitutional amendment would be the only item authorized to be on the convention’s agenda.
Koehler says the balanced-budget amendment proposal that would be the only issue taken up by CFA would require Washington, DC lawmakers to do what state lawmakers already have to do every year.
“Because [CFA’s] amendment limits spending to cash on hand, plus a limited amount of borrowing, there will never be a budget gap under the amendment,” Koehler said. “If the money or borrowing capacity does not exist to spend, the spending cannot occur. It will require the federal government to step up and do the hard work that many states that have a balanced budget requirement, including Ohio, already do.”
The Problems of Tomorrow, Today
Koehler says a constitutional balanced-budget requirement removes political incentives to place the burden on future generations.
“Endless growth in spending is enabled by unlimited borrowing capacity, because unlimited borrowing capacity enables the cost of endless spending to be shifted to future generations at no immediate political cost,” Koehler said. “With the Compact’s balanced-budget amendment in place, there would no longer be a source of free resources for endless growth in spending.”
‘Self-Enforcing’
Nick Dranias, president and executive director of the Compact for America Educational Foundation, says CFA would create political incentives for lawmakers to spend money wisely.
“[CFA’s] balanced budget amendment aligns incentives such that the amendment is essentially self-enforcing,” Dranias said. “The amendment first imposes an easy-to-assess limit on spending: The federal government cannot spend at any point in time more than [the] cash [it has] on hand from taxes and free-and-clear income, [plus] borrowed funds up to a specific amount of full-faith-and-credit debt.”
Dranias says CFA would prevent lawmakers from using budget gimmicks to spend money the government doesn’t actually have.
“This pay-as-you-go spending limit cannot be evaded by budgetary gimmicks such as rosy estimates of revenue or conservative estimates of cost because it does not hinge on how a budget is estimated. Either the cash exists and can be spent, or it doesn’t and can’t be spent.”
