Problem

One of the tactics cronyists have used to entrench their agenda is that of using binding agreements among the states (or “interstate compacts”) to lend durability to their preferred policies. They have seized upon a little known quirk in constitutional law that allows states to join such interstate compacts by passing a mere statute, and thereby contractually bind future legislatures to their preferred public policy. Sometimes indefinitely.

Using an interstate compact in this way essentially buys better durability than a state constitutional amendment for the “price” of two statutes—one passed in the state making the offer to compact, and one passed in the state accepting the offer to compact. This is because interstate compacts are guaranteed by the U.S. Constitution’s prohibition on states impairing the obligation of contract.

And that’s not all. Cronyists have seized upon another quirk in constitutional law that transforms public policies established by interstate compact into the equivalent of federal law. When a compact receives the consent of Congress, it can trump past federal laws, as well as future state and local laws under the Supremacy Clause; and establish unaccountable interstate agencies to override state and local governments.

Not surprisingly, these features have resulted in the formation of hundreds of interstate compacts, many of which serve in seemingly innocuous ways a cronyist agenda with greater ease and permanency than a state constitutional amendment. The case law sustaining these compact initiatives dates back to the early 1800s and is unassailable in court for all practical purposes. Therefore, we respectfully submit: It is time to fight fire with fire.

Solution

The Limited Government Stronghold Initiative involves the development and propagation of “stronghold compacts” which will either embed or wrap around any new or existing limited government policy, and thereby imbue more durability to that public policy than a state constitutional amendment for the “price” of a statute in two states. If desirable, such a compact can serve as a platform for giving its policy “payload” federal law status with congressional consent.

Just about any public policy, the durability of which implicates the interests of two or more states, can benefit from this “stronghold compact” approach. In particular, the Foundation is engaged in the research and development of similar “stronghold compact” ideas to lend the equivalent of state constitutional durability to: (1) educational choice reforms; (2) donor anonymity protections; (3) deregulation; and (4) anti-subsidy reforms. Here are what they could look like:

• Educational Choice Compact: States could compact to recognize each other’s school voucher, charter school and educational savings account programs, allowing reciprocal access by students to their respective educational systems (or pooling resources to be made available for tax credits, vouchers or educational savings accounts), and also agree that their programs or specific aspects of their programs will not be repealed or burdened by future state laws or regulations;

• Streamlined Regulation Compact: States could compact to reciprocally recognize service providers who operate lawfully without a license or with minimal regulatory restraint and agree not to impose future regulatory burdens on such providers to encourage interstate commerce;

• Donor Privacy Compact: States could compact to reciprocally protect the constitutional privacy interests and freedom of association of anonymous donors to policy organizations and agree not to impose future disclosure requirements in order to encourage a more robust marketplace of ideas in their jurisdictions; and

• Anti-Subsidy Compact: States could compact to engage in mutual disarmament when it comes to subsidizing private enterprise to prevent an “arms race” among member states in adopting cronyist policies to pick winners and losers or artificially encourage business relocation.

The possibilities are endless; and the bottom line is that embedding any underlying limited government reform in a stronghold compact would thereby achieve greater durability than a state constitutional amendment.

For more information about the Limited Government Stronghold Initiative, email CFAEF President Nick Dranias.