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Impoundment: Part 4 of 7 in the Compact BBA Series

This posting is the fourth in a 7 posting series explaining the Balanced Budget Amendment at the heart of the Compact for a Balanced Budget.

Previously, we explained that section 1 of the Balanced Budget Amendment ensures that the federal government cannot spend more than cash on hand from ordinary revenue sources and plain vanilla full faith and credit borrowing. Then we discussed how sections 2 and 3 of the model Amendment sets an initial constitutional debt limit that limits available borrowing capacity to 105% of the outstanding full faith and credit debt, plus any increase approved by a majority of state legislatures.

This posting explains section 4 of the Amendment, which enforces the spending and debt limits of sections 1 through 3.

Section 4 of the Compact's BBA establishes the enforcement mechanism for the debt limit it establishes. It requires the President to specify “impoundments”—what spending will not take place—when we reach a red zone of borrowing capacity-98% used. It empowers Congress to override the President's "impoundments" in 30 days with equal or greater amounts. To encourage accountability for the Country's Chief Executive, the Amendment specifies that the President's failure to enforce the debt limit is an impeachable misdemeanor.

Section 4 has been criticized with the contention that there is no reason to expect the threat of impeachment to incentivize the President to enforce the debt limit by making the required impoundments. This criticism is easily refuted.

First of all, how many Presidents when they had the impoundment power did not exercise it? The short answer is none. Presidents impound all the time. Every time a debt limit fight happens, that's what the President is doing when he stops allowing spending on national parks or grandma's social security check.

The critique of Section 4 thus starts with a false premise-that ordinarily Presidents would be reluctant to impound. Presidents are not reluctant to impound. What's great about section 4, is that it limits the abuse that can be done by the President in impounding by allowing Congress a simple majority override that does not require the President's signature--something that Congress does not have the power to do today, which is why Congress always loses the debt limit battle under the current regime.

Leaving this point aside, the foregoing critique of section 4 fails to grasp how the amendment makes the threat of impeachment powerful. Simply put, it establishes a clear and unequivocal line of political accountability to the President. If the President does not exercise his impoundment power, section 1's pay-as-you-go spending limit will immediately limit all federal government spending to taxes or non-borrowed income (such as from selling federal lands) when the debt limit is reached. This would be the mother of all sequesters. The howling would be intense. The special interests looking for political revenge would have a clear target, highlighted by the impeachment clause. It would be devastating politically to the President. And, most importantly, Congress would have every reason to enhance the blame placed on the President to avoid anyone remembering that they made the appropriations in the first place!

In the political context created by the Amendment, the threat of impeachment would look very, very real to the President. It is silly to suggest he would not try to avoid it. Why would he risk his presidency when all he has to do is what Presidents always do—impound spending to enforce a debt limit? The foregoing critique of section 4 shows inexperience with the political process.

Tomorrow, we'll talk about the Amendment's tax limit--section 5.

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