Every U.S. citizen now owes roughly $100,000 in federal debt. That is the grim news from the most recent study by the Congressional Budget Office (CBO). CBO data show that federal debt has been growing at an unsustainable rate for decades and will continue to do so in coming years. At some point, the United States will hit a fiscal cliff, when lack of confidence in the ability of the federal government to repay the debt will result in sharply higher interest rates and default. We are in the final years of our debt crisis.
Congress is simply unable to bring federal expenditures into balance with federal revenues to stabilize and reduce federal debt. Congress has passed numerous statutory rules mandating this solution, but these rules are routinely circumvented and suspended. There is little discussion of the debt crisis in this election year because elected officials have in effect thrown in the towel.
However, the states have now launched a Hail Mary to solve the debt crisis. State attorneys general will soon file a lawsuit in the U.S. Supreme Court, which seeks a Declaratory Judgement against Congress for failing to fulfil its constitutional duty under Article V to record and count state applications for a fiscal responsibility amendment.
Article V of the U.S. Constitution gives the states as well as Congress the power to propose amendments. The states have submitted applications for a fiscal responsibility amendment for centuries, but Congress has failed to record and count these applications. In 1979, two thirds of the states had submitted applications for a fiscal responsibility amendment, but Congress failed to count these applications or call the amendment convention.
This year, Rep. Jody Arrington (R-TX) filed HCR 24, which would require Congress to fulfill its constitutional duty to record and count state applications for a fiscal responsibility amendment and call the amendment convention if the requisite applications by two thirds of the states is met. Unfortunately, this legislation has made little headway in Congress.
debt brake was incorporated in the Swiss Constitution through a referendum with support from 85 percent of Swiss citizens. The debt brake simply requires Swiss legislators to bring expenditures into balance with revenue in the near term. A cap is placed on the rate of growth in federal spending equal to the long run rate of economic growth. The debt brake allows for emergency spending in the short term, but deficits must be offset by surplus revenue within a six-year period.
The importance of the Swiss debt brake was revealed this year when the Swiss Parliament rejected a proposed budget that exceeded the spending limit and would have required suspension of the debt brake. The Swiss Parliament also rejected legislation earmarking funds for the Ukraine War because the spending violated the debt brake rules. In contrast to the United States, the Swiss debt brake has imposed effective constraints on fiscal policies over the long term. The debt brake helped Switzerland to stabilize and reduce federal debt as a share of national income.
Polls reveal that an overwhelming majority of U.S. citizens support a fiscal responsibility amendment to the Constitution. So, if a fiscal responsibility amendment is ever submitted to the states for ratification there is a high probability that the measure would pass. However, the odds are against the United States enacting a fiscal responsibility amendment in the Constitution though the Article V process. We are like the football coach with one play left to win the ball game; we don’t have much choice.
Barry Poulson (think@heartland.org) is a policy advisor with The Heartland Institute.
Image: RawPixel.com
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