Testimony before the Michigan House Committee on Financial Liability Reform

Published November 4, 2015

Testimony before the Michigan House Committee on Financial Liability Reform
Wednesday, November 4, 2015
Nathan Makla, State Government Relations Manager, The Heartland Institute

Chairman Pat Somerville and members of the Committee, thank you for granting me the opportunity to testify today. My name is Nathan Makla, and I am a state government relations manager for The Heartland Institute, a 31-year-old national nonprofit research organization dedicated to finding and promoting ideas that empower people.

The Heartland Institute’s new Center for Constitutional Reform was created to highlight individuals and organizations working to find solutions to the nation’s constitutional problems, such as finding a way to pass a balanced budget amendment.

Heartland does not endorse one particular path to constitutional reform. Instead, it supports and seeks constructive debates on all efforts to restore constitutional order, including a potential agreement by the states to adopt the Compact for a Balanced Budget.

Point 1: States can and should become a stronger check on the size and power of the federal government.

The national government currently faces a debt of $18 trillion. National entitlement programs are headed toward bankruptcy – some as soon as 2016. Many state and local governments face their own impending financial cliffs. Government debt threatens to destroy people’s savings, the economy, and the United States’ role as a global leader.

The national government has grown to the point that it is now a clear and present danger to the American people’s life, liberty, and happiness. States have an obligation to address this threat.

The system created by the Founding Fathers to rein in the national government is now broken. The federal government has unlimited power to tax, regulate, and borrow. The system of federalism designed to check and balance the national government’s powers was undermined by granting it the power to tax personal incomes without limit (Amendment XVI) and requiring the direct election of senators (Amendment XVII). The courts have failed to interpret and enforce key provisions of the Constitution that severely limit the powers of Congress and the executive branch. State governments have become addicted to “revenue sharing,” losing their independence and their ability to help control the growth of the national government.

Point 2: States throughout the country are pursuing constitutional reform.

A new social movement is growing across the nation in support of constitutional reforms that will help halt the expansion of the federal government’s powers.  

Over 200 bills to nullify federal power were filed by state legislatures across the nation during the 2015–16 legislative session. Fifty-six bills that called for an Article V convention for the purpose of enacting a federal balanced budget amendment were filed. Twenty-seven states have also passed single-subject applications for an Article V convention that calls for a balanced federal budget.

If Michigan were to pass the Compact for a Balanced Budget, they would join Alaska, Georgia, Mississippi, and North Dakota.

Other countries are also looking at constitutional reform. Mexico is considering constitutional changes to stem corruption in its national government, and the United Kingdom is planning to write its first formal constitution in the nation’s history.

Point 3:  Compact for a Balanced Budget is a viable way to rein in out-of-control federal spending and restore fiscal responsibility.

In the United States, constitutional reform should be used to impose fiscal discipline on the national government, restore the important role of the states in our federalist system of government, and end the practice of burdening future generations with debt that has emerged because of reckless spending practices.

In a Policy Study published by The Heartland Institute on the Compact for a Balanced Budget, author Nick Dranias, a constitutional law expert, writes, “With the Compact’s balanced budget amendment in place, Washington would no longer have the ability to set its own credit limit and write itself a blank check. The states would become an active board of directors charged with keeping an eye on our wayward federal CEO and staff. Debt would become scarce. Priorities would have to be set. Sustainable federal programs would have to become the norm. A broad national consensus – not midnight-hour panic – would have to support any further increases in the national debt.”

In closing, constitutional reform proposals such as Compact for a Balanced Budget are vitally important to restore vital checks and balances on the federal government and prevent future generations from being burdened by an increasing amount of debt.

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For more information about The Heartland Institute’s work, please visit our websites at www.heartland.org and http:/news.heartland.org, or call Nathan Makla at 312/377-4000 or reach him by email at [email protected]