December 2018 Newsletter

by | Dec 4, 2018 | AVC Newsletter

This month…

  • Indiana Voters Easily Approve a State BBA
  • ALEC Task Force Adopts a Resolution Aimed at Pushing
        Congress to Call a BBA-focused Article V Convention
  • Progress for the Congressional Term Limits Effort
  • Prominent Ds & Rs Call on Congress to Fix the Debt
  • Is Congress Now Incapable of Solving the Debt Crisis? 
  • AP Story Claims Article V is Just for Conservatives
  • Failure to Enact a Federal BBA Could Endanger Medicare
  • Article V Expert Produces 2 New Papers

Indiana Voters Easily Approve a State BBA –
During the November 6 election more than 70% of Hoosier voters said “Yes” to Indiana Public Question 1, thereby ratifying an amendment to the Indiana constitution.  The amendment provides that unless overridden by a 2/3rd vote by both houses of the state legislature, the state is required to adopt budgets that restrain spending to estimated revenues.

The measure was originally proposed by Mike Pence in 2015 when he was Indiana’s governor.  Now adopted, the amendment will go into effect for the next two-year budget cycle, which extends from July 1, 2019, to June 30, 2021.

According to an IndyStar (Indianapolis) news report, “In the amendment, ‘revenue’ refers to income that comes into the state general fund and all other state funds but not bond proceeds or other loans.  ‘Expense’ entails the operating costs of the government.   If costs exceed revenue at the end of a biennial budget period, then the next biennial budget has to subtract the shortfall from the projected revenue for the next budget period.”

When Pence first proposed the measure, he was reported to have said, “A balanced budget requirement in the constitution of the state of Indiana will assure Hoosiers that today and tomorrow, Indiana will spend wisely, protect our state from an economic downturn, and unlike Washington, DC, we won’t bury our children and grandchildren under mountains of debt.”

Under Indiana’s constitution, a proposed amendment must be approved in two legislative sessions in a row before it can be presented to the public.  That is what happened.

In the months leading up to the election, some opponents claimed that the amendment could cut pensions to fill a budget shortfall.  Former Indiana Sen. Brandt Hershman says that is untrue.  He says, “Pensions will be actuarially funded, which means that they will be based on accounting practices that project future liabilities and the investment it will take to cover them.”  Read the entire IndyStar report HERE.

Following the voter approval, the News-Sentinel (Fort Wayne) carried an editorial applauding the newly ratified constitutional provision.  It pointed out that following the election national credit rating agency Moody’s Investors Service called the new BBA “credit positive” for the state.  It also commented, “It’s a policy that ought to be enacted by the federal government as well.” 

An Associated Press report on Moody’s rating said that Indiana’s measure was the only state finance-related ballot measure in the November election “to earn a ‘positive’ indication in Moody’s postelection roundup”.  Read the AP report HERE.

ALEC Task Force Adopts a Resolution Aimed at Pushing
Congress to Call a BBA-focused Article V Convention –
During its late November States & Nation Policy Summit in Washington, DC, the American Legislative Exchange Council’s (ALEC) Federalism and International Relations Task Force adopted an important BBA-related resolution.

The unanimously-adopted action by the task force encourages state legislatures to adopt a model resolution urging “the US Congress to call an Article V Convention for proposing a Balanced Budget Amendment (BBA) and related fiscal limits. This call will be issued on the counting of 34 Article V Applications from among the more than 700 applications already submitted by state legislatures.”

The action was requested by the seven-month-old group known as Let Us Vote for a BBA.  Consistent with the objectives of the new BBA group, the model resolution urges Congress to “stipulate that the State Convention Mode of Ratification shall be used if a BBA is proposed by the Article V Convention,” effectively a vote of the people.

A summary of the task force rationale and a copy of the entire model resolution can be read HERE.

Progress for the Congressional Term Limits Effort –
A news release put out by US Term Limits just before the November 6 election reported, “The year 2018 will go down in history as the resurgence of the term limits movement.”  It said, “A record-shattering 405 candidates nationwide that are running for office this cycle and will appear on the general election ballot, have signed a pledge calling for congressional term limits, and another 36 candidates have signed a pledge to defend their state legislatures term limits.”

USTL stated that according to a January 2018 poll, 82 percent of voters approve of Congressional term limits.

Prominent Ds & Rs Call on Congress to Fix the Debt –
Following the November 6 election, the Campaign to Fix the Debt co-chairs, former Pennsylvania Governor Ed Rendell (D) and New Hampshire Senator Judd Gregg (R) issued the following statement:

“With a new Congress comes a new opportunity to solve our nation’s biggest problems. Our leaders now face a choice – partisanship or progress.

“We are entering this next year with surging and unsustainable levels of debt ($21.7 trillion and climbing), and the new Congress just elected will preside over the return of trillion-dollar deficits.

“The outgoing Congress passed legislation adding $2.4 trillion to the debt over the next decade through unpaid-for tax cuts and spending increases, and no progress was made on fixing our health and retirement programs. It is a problem the next Congress will not be able to ignore.

“Our leaders need to acknowledge the tough choices ahead and level with the American people on our increasingly dangerous and out-of-control fiscal situation and what it will take to fix it.

“Although we come from different parties, we are both Americans who want to continue the essential tradition of leaving the country better off for the next generation.  We cannot afford more partisanship and short-sightedness.”  For information about the Campaign to Fix the Debt, click HERE.

Is Congress Now Incapable of Solving the Debt Crisis? –
On November 8 the MySA web site and the Express-News (San Antonio, Texas) carried a commentary by economists John Merrifield and Barry Poulson, discussing the need for a serious “stress test”… like bank stress tests applied to private institutions beginning in 2010… for the federal government.

They report that a form of fiscal stress tests have been conducted by the Federal Reserve and the International Monetary Fund.  They say “In short, these stress tests suggest that the greatest threat to fiscal, and financial market, stability is not weakness in the balance sheets of private financial institutions but rather in the growing debt burden and balance sheet of the federal government.”

They point to other developed countries that have enacted fiscal rules to constrain spending and deficits… “deficit and debt brakes [that] are continuous stress tests, or guardrails, designed to keep fiscal policy from going off-track.”

They report that they have simulated “similar fiscal rules to estimate their potential impact on deficits and debt in the United States over the next two decades,” concluding “that over this period, with these fiscal rules in place, the United States could balance the budget and reduce debt to sustainable levels.”

They worry though that “The United States now has little fiscal space to respond to a major recession”… and conclude by saying “Perhaps we have passed a tipping point, such that Congress is now incapable of solving the debt crisis.”  Read their commentary HERE.

AP Story Claims Article V is Just for Conservatives –
During early November a series of publications carried variations of a story by Associated Press writer Matt Sedensky.  Publications carried the article under such varied headings as “Conservatives Push for Amendments” and “Conservatives want to bypass usual way to amend Constitution”.

In spite of the heading, the article does acknowledge that Article V is a constitutional provision that more left-leaning Americans also seek to use.  Sedensky evidences a reasonable grasp of what Article V is all about, and its history, until it comes to his selection of “experts” to quote on the subject.

Expressing “fears” related to a possible Article V convention the article quotes Michael Klarman, described as a “constitutional law professor” at Harvard University, as saying “What’s to stop a convention from passing an abhorrent affront to the Founders, like an outright ban on Muslims.”  Surely any knowledgeable “constitutional law professor” knows that an Article V convention does not “pass” any constitutional amendments… it only has the authority to “propose” amendments.  Read the AP story HERE.

Failure to Enact a Federal BBA Could Endanger Medicare – 
A November 11 article in the Wall Street Journal says the Congressional Budget Office projects the federal government will spend “more on interest than it spends on Medicaid in 2020; more [on interest] in 2023 than it spends on national defense; and more in 2025 than it spends on all nondefense discretionary programs combined, from funding for national parks to scientific research, to health care and education, to the court system and infrastructure”.

The article, by Kate Davidson and Daniel Kruger, says “the sheer scale of debt being accumulated by the federal government has put the US on a path of rising interest costs that in the years to come could crowd out other government spending priorities and rattle markets.

“In 2017, interest costs on federal debt of $263 billion accounted for 6.6% of all government spending and 1.4% of gross domestic product, well below averages of the previous 50 years. The Congressional Budget Office estimates interest spending will rise to $915 billion by 2028, or 13% of all outlays and 3.1% of gross domestic product.”

The WSJ writers report that, “The US Treasury is set to issue twice as much debt in 2018 as it did in 2017, according to Treasury Department borrowing estimates.”  Read their article HERE.

Article V Expert Produces 2 New Papers –
During November Professor Rob Natelson of the Independence Institute posted two new studies that will be of interest to Article V activists.  Natelson is a nationally-known constitutional scholar and author whose research into the history and legal meaning of the Constitution has been cited repeatedly at the US Supreme Court, federal appeals courts, and state supreme courts.  He is widely acknowledged to be one of the country’s leading active scholars on the Constitution’s amendment procedures.

Natelson’s “Response to the Runaway Scenario” is a study on the often repeated, historically baseless fear that the Article V state application and convention procedure could get out of control and wreak havoc on America’s Constitution, and why that fear has no rational basis.  The reasonable evidence on the five pages of this paper should be read by every Article V activist, skeptic and journalist.

In a second paper released on November 16, entitled “Are recent “rescissions” of Article V applications valid?” Natelson cites six “errors” or “material mistakes” some state legislatures have relied upon in their efforts to rescind prior Article V applications.  He concludes that Congress might choose to consider at least some of the previously rescinded applications as still valid.

Meanwhile in a blog posting entitled “A Backdoor Approach to Calling an Article V Convention”, David A. Super, a professor at Georgetown University Law Center, has questioned the methodology used by Natelson in a recent paper he wrote for the Federalist Society (“Counting to Two Thirds: How Close Are We to a Convention for Proposing Amendments to the Constitution?”).

Super, an outspoken opponent of using the Article V process (see his March 2017 “A constitutional convention is the last thing America needs” commentary in the Los Angeles Times) calls Natelson’s approach “an end-run around state legislatures”. To access the five above papers/articles, click on the titles.

Who Said It?

 “To take out a credit card from the Bank of China
in the name of our children,
driving up our national debt…
that’s irresponsible, it’s unpatriotic.”


Barack Obama