In October, the Republicans failed conservatives and libertarians yet again. It’s not just about the $328 billion dollars the Obama administration borrowed 24 hours after the shutdown ended. It is not only because the Reid-McConnell deal empowered President Obama with limitless borrowing authority until February 8, 2014. And it does not matter that the Party Elite sided with Senator McConnell, rather than Cruz, in the preceding dust up. Republicans failed us because the premise of their fight was wrong.

All sides looked to Washington to reform itself — either immediately or after the next election. But we must recognize that Washington will never reform itself. Its denizens are too distant from the heartland. They are too encircled by entrenched interests that favor the endless growth of government. They are too tempted by the concentration of limitless power.

Not since the New Deal has there been anything close to a level playing field in Washington for advocates of limited government. It is profoundly mistaken to bank on any Washington-centric strategy for restoring our republic. Instead, we must bring the fight to our home turf — the states, and we need to do more than a rear-guard action resisting federal overreach.

We must organize the states to change the rules of the game by exercising their ultimate power to originate constitutional amendments under Article V of the United States Constitution. Only then can we sidestep the rigged game produced by the New Deal and restore our republic.

We should start by advancing a Balanced Budget Amendment that makes debt truly scarce for the federal government. Unlimited debt is the fairy dust that creates the illusion of limitless resources. When the illusion of limitless resources exists, it becomes impossible to persuade politicians that the federal government should have a limited role in our lives. Moreover, politicians use unlimited debt to buy political advantage today while shifting the costs of their policies to non-voting future generations. There is no effective political check on such behavior — except to impose a strong constitutional limit on the use of debt.

Sadly, as most recently illustrated by the Reid-McConnell deal, Washington will never control its addiction to debt. Fortunately, Article V empowers state legislatures to originate constitutional amendments through a convention of the states.

In Federalist No. 85, Hamilton reassured the States that they could “rely on the disposition of the State legislatures to erect barriers against the encroachments of the national authority” through state-initiated constitutional amendments. Federalists made similar arguments at various ratification conventions. Because of this “closing argument,” the Constitution was ratified.

It is high time for us to prove the Founders right. But to have a real shot at success, we need to step away from a rote application of the language of Article V. We just do not have time to muddle through a process that would require at least 100 legislative enactments across multiple legislative sessions, taking ten or more years to generate an amendment. That was a legislative quest that even President Reagan could not complete in the 1980s. Instead, we need to upgrade to “Article V 2.0” — what the Goldwater Institute calls the “Compact for America.”

Using an agreement among the states called an “interstate compact,” the Compact for America invokes Article V to advance a powerful Balanced Budget Amendment. The amendment would define a balanced budget in common sense terms: cash flow out must match cash flow in. By definition, deficit spending would be out of balance and would be limited by a constitutionally-imposed debt limit.



That debt limit would not be in the hands of Washington alone; it could be increased, but only with the approval of a majority of state legislatures acting as an outside board of directors. The amendment avoids a game of chicken over debt limit increases by requiring spending impoundments when borrowing reaches 98 percent of the debt limit. Finally, the amendment would quell fears of across-the-board tax increases by requiring any new income or sales tax to secure two-thirds approval of both houses of Congress, excepting measures that close loopholes or completely replace the income tax with an end-user sales tax.

Of course, two-thirds of each house of Congress would never propose this amendment. That’s where “Article V 2.0” comes in.

Compact for America consolidates everything in the Article V process into just two overarching pieces of legislation — one congressional resolution and one interstate compact joined by thirty-eight states. The compact allows the states to agree in advance to the Article V process — from the text of the proposed amendment, to the application to Congress, to delegate appointments and instructions, to the selection of the convention location and rules, to the ultimate legislative ratification of the BBA. The congressional resolution would consent to the compact and set the amendment process inexorably in motion.

Compact for America thereby promises to transform the state origination of a Balanced Budget Amendment into a “turn-key” operation. It makes the process roughly equivalent to a ballot measure requiring concurrence of simple majorities of Congress and thirty-eight states. Not only that, but as soon as two states join the Compact, a commission is formed to expand its membership and advance the Balanced Budget Amendment it carries.

The commission could disband when the Balanced Budget Amendment is ratified, but until then it would provide a unified platform from which to cheerlead congressional champions — and to criticize and resist any effort by Washington to oppose the compact.

Compact for America would thus be a thorn in the side of the political class that wouldn’t go away until the job is done. It would bring institutional commitment to rewriting the rules of the post-New Deal game that would match Washington’s commitment to unlimited power.

In short, advocates of limited government finally have the vehicle to fundamentally reform Washington from the states in partnership with our congressional champions. Next time, let’s roll with the states first, before cruising with Ted.