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How to Control Congress
· Wednesday, November 17, 2010
Let's assume that each of our 535 congressmen cares about the destructive impact of deficits and debt on the future of our country. Regardless of party, congressmen face enormous lobbying pressures and awards to spend more and little or no pressure and awards to spend less. The nation's founders would be horrified by today's congressional spending that consumes 25 percent of our GDP. Contrast that to the years 1787 to the 1920s when federal government spending never exceeded 4 percent of our GDP except in wartime. Today, federal, state and local government consumes 43 percent of what Americans produce each year. The Washington, D.C.-based Tax Foundation computes that the average taxpayer is forced to work from Jan. 1 to mid-April to pay federal, state and local taxes. If he were taxed enough to pay the $1.5 trillion federal deficit, he'd be forced to work until mid-May.
Tax revenue is not the problem. The federal government has collected just about 20 percent of the nation's GDP almost every year since 1960. Federal spending has exceeded revenue for most of that period and has taken an unprecedented leap since 2008 to produce today's massive deficit. Since federal spending is the problem, that's where our focus should be.
Cutting spending is politically challenging. Every spending constituency sees its handout as vital, whether it's Social Security, Medicare and Medicaid recipients or farmers, poor people, educators or the military. It's easy for congressmen to say yes to these spending constituencies because whether it's Democrats or Republicans in control, they face no hard and fast bottom line.
The bottom line that Americans need is a constitutional amendment limiting congressional spending to some fraction, say 20 percent, of the GDP. That limit could be exceeded only if the president declared a state of emergency along with a two-thirds vote of approval in both houses of Congress. Each year of a declared state of emergency would require another two-thirds vote in each house.
During the early '80s, I was a member of the National Tax Limitation Committee's distinguished blue-ribbon drafting committee that included notables such as Milton Friedman, James Buchanan, Paul McCracken, Bill Niskanen, Craig Stubblebine, Robert Bork, Aaron Wildavsky, Robert Nisbet, Robert Carleson and others. We drafted a Balanced Budget/Spending Limitation amendment to the U.S. Constitution. The U.S. Senate passed that amendment on Aug. 4, 1982, by a vote of 69 to 31, two more than the two-thirds vote required for approval of a constitutional amendment. The vote was bipartisan: 47 Republicans, 21 Democrats and 1 Independent voted for the amendment.
It was a different story in the House of Representatives. Its leadership, under Tip O'Neill tried to prevent a vote on the amendment; however, a discharge petition forced a vote on it. While the amendment was approved by a majority (236 to 187), it did not meet the two-thirds required by Article V of the Constitution. The vote was again bipartisan: 167 Republicans, 69 Democrats. The amendment can be found in Milton and Rose Friedman's "Tyranny of the Status Quo."
The benefit of a balanced budget/spending limitation amendment is that it would give Congress a bottom line just as we in the private sector have a bottom line. Congress would be forced to play one spending constituency off against another, rather than, as it does today, satisfy most spending constituents and pass the buck to the rest of us and future generations in the forms of federal deficits and debt.
The 1980s discussions settled on giving Congress a spending limit of 18 or 20 percent of our GDP. I thought a 10 percent limit was better. When queried by a reporter as to why 10 percent, I told him that if 10 percent is good enough for the Baptist Church, it ought to be good enough for Congress.
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Dave Newbry
Milton Friedman one time suggested a 4% rate would be more than enough to satisfy the government's "need" for spending money.
Posted November 17, 2010 at 12:07:06 PM
ElExtremo1312
Professor Williams!
Once again you are right on the money (pun intended)!
Everyone reading your words should write and/or call their congressional representatives (with a copy of your words) and demand/suggest that they institute a tsunami to pass such an amendment and send it to the states. There would be very few (Cal., NY,) that would fail to ratify it!
Posted November 17, 2010 at 12:49:48 PM
GordAuch
Could the Balanced Budget Amendment be another attempt to legislate morality?
"“Our constitution was made for a moral and religious people; it is wholly inadequate for any other.” --John Adams
Posted November 17, 2010 at 2:02:09 PM
Jerry Lapham
Not sure it would work. What's to keep a future Congress from fudging the GDP figure?
Posted November 17, 2010 at 4:10:32 PM
p3orion
Essentially, what Congress does in running up these huge debts is to guarantee "taxation without representation" to a huge group of citizens.
Who, you may ask? Why, young people who cannot yet vote, and even those who are not yet born! It is they who will be forced to pay for the monstrous spending of today, but who have no say, and will likely get none of the benefits of it.
We rightly bemoan the injustice when voters are disenfranchised of their right to vote by a quirk of geography (for example, deployed military personnel who do not receive their absentee ballots on time.) If only there were some way to enfranchise this vast group of angry voters who are getting the shaft not because they're in the wrong place, but the wrong decade.
You think we complain about societal parasites who live off the minority producing and paying taxes? In twenty or thirty years, our progeny will curse us for what we of the early 21st century did to the economy. I will not blame them a bit...
Posted November 17, 2010 at 4:42:45 PM
Peter
Constitution of the United States of America - Amendment 28
Article 1: In the fiscal year following ratification of this amendment, the power of Congress to lay and collect taxes, duties, imposts, excises, or fees, henceforth called Revenue, shall not exceed thirty percent of the Gross Domestic Product (GDP) of the preceding fiscal year. The fiscal year begins on October 1 for the next calendar year.
Article 2: In the second and subsequent years following ratification of this amendment the power of Congress to lay and collect Revenue shall decrease by one percent each year until the percent shall be ten percent of the Gross Domestic Product (GDP) of the preceding fiscal year. Ten percent of the previous year’s GDP shall henceforth be the permanent maximum Revenue. So there is no misunderstanding — in the first year maximum Revenue shall be 30% of previous GDP; second year, 29% GDP; third year, 28% GDP; twenty-first year, 10%; twenty-second year, 10%, twenty-third year, 10%; etc.
Article 3: In each fiscal year following ratification of this amendment, Congress shall decrease the total debt of the United States of America by three percent until the total debt shall be 500 billion dollars or less, at which time the entire debt of the United States of America shall be reduced to zero, after which time, the debt of the United States of America must be zero at the end of every fiscal year.
Article 4: In any fiscal year in which total expenditures of the United States of America exceed total Revenue of the United States of America, or in which Congress fails to accomplish the debt reduction of Article 3, three fourths of the members of the Senate and three fourths of the members of the House of Representatives, chosen by lot, shall be removed from office on the last Tuesday of March of the following calendar year, on which day a special election shall be held to choose their replacements for full or partial terms. No member of Congress so removed shall ever be permitted to hold any elective office in the government of the United States of America, or to be employed by the government of the United States of America.
Article 5: Congress must contract with three non-governmental entities to determine the Gross Domestic Product, total expenditures, and total Revenues of the previous fiscal year. The three entities must agree on the figures to be presented to Congress by the last Friday of February of the calendar year following the fiscal year evaluated. No entity so contracted shall be eligible to be contracted again for a period of ten years.
Article 6: Congress is prohibited from making loans to any entity.
Article 7: Congress is prohibited from making the United States of America a guarantor of any loan
Posted November 18, 2010 at 6:38:04 PM