Great Questions Answered!


We recently received a number of excellent questions to address. We suspect these questions are more commonly entertained than many folks have the courage to mention. That's why we've made them the focus of this blog.

Judge for yourself whether the strength of our answers carry the burden that has been rightfully placed! Inquiring minds are welcome at Compact for America.

Question 1. How does one address the runaway convention idea and idea of using a compact for an Article V convention simultaneously, especially since the compact approach is novel and not known to most people.

Answer: The fear of a runaway convention is mostly a fear of the unknown. Unlike other approaches, the Compact approach to Article V can neutralize that fear because it ensures the number of states needed to ratify a Balanced Budget Amendment agree up-front to the entire amendment process before a convention is ever organized; including the delegates, the amendment, the convention rules and the ratification itself. Those who continue to fear a runaway convention despite knowing these details are far fewer than those who fear a runaway convention without them.

The Compact is also not as novel as Article V itself in so far as hundreds of compacts have been successfully formed.

When all of this is taken together, wrapping the as-yet unsuccessful and untested Article V convention process in a compact actually makes the entire approach less novel and more understandable than otherwise for most people. The Compact consolidates everything states do in the amendment process into one bill passed once in 38 states and everything Congress does into one resolution passed once with simple majorities. The knowability of the Compact approach uniquely dispells reasonable fears of a runaway convention.

Question 2. If the Balanced Budget Compact gets close to passing at national level, why wouldn't it attract the same or greater opposition than earlier balanced budget proposals have?

Answer: The Compact generally does not attract the same level of opposition as earlier balanced budget proposals have. For example, to this day, George Will is opposed to the earlier balanced budget proposals. He fears a runaway convention. But he heartily endorsed the Compact for America approach to Article V in his April 2014 Washington Post Column. This shows that we tend to neutralize most of the typical opposition to the older BBA approach because the Compact approach answers all questions about the process up front, leaving no unanswered questions. By fully fleshing out the amendment process and the amendment itself before organizing a convention, the Compact approach addresses all of the concerns that derailed the older BBA approach and neutralizes most of the opposition.

Question 3. Why is a VAT included in the Compact's Balanced Budget Amendment?

Short Answer: The Compact’s Balanced Budget Amendment does not include a VAT. The Amendment deters a VAT with a supermajority vote requirement. It requires a two-thirds majority roll call vote of the whole number of each House of Congress in order to pass or increase a VAT. This makes it far less likely that Congress will ever impose a VAT with the Compact’s Amendment in place as compared to the status quo requirement of simple majorities. This is one reason why the Amendment’s tax limit encourages spending reductions before resorting to tax increases to close deficits.

Long Answer: Grover Norquist has endorsed the Compact’s Balanced Budget Amendment. Norquist would not have endorsed the Amendment if it included a VAT. It does not. In fact, Congress already has the power to impose a VAT under its existing constitutional taxing authority. Right now, Congress could impose a VAT on top of the existing income tax with the support of just simple majorities of each House of Congress. What the Amendment does is make it harder for Congress to do so. Here is what section 5 of the Amendment says in relevant part: “No bill that provides for a new or increased general revenue tax shall become law unless approved by a two-thirds roll call vote of the whole number of each House of Congress.” As shown, the Amendment requires a two-thirds vote of the whole number of each House of Congress for any new or increased “general revenue tax.” The definition of “general revenue tax” in section 6 of the Amendment includes any future VAT as well as existing income or future sales taxes. Requiring a two-thirds majority of each House of Congress, rather than the current simple majority rule, makes it more difficult to impose a VAT, not easier.

Question 4. If a flat tax is a good idea, why don't we already have it?

Answer: A flat tax is hard to obtain politically because it requires the elimination of tax code loopholes that powerful special interests defend with great tenacity. But the Compact’s Balanced Budget Amendment does not impose a flat tax or take a position on the merits of a flat tax other than to maintain it as a viable political option together with a fair tax. Section 5 of the Amendment says the two-thirds roll call vote requirement for increasing general revenue taxes: “shall not apply to any bill that provides for a new end user sales tax which would completely replace every existing income tax levied by the government of the United States; or for the reduction or elimination of an exemption, deduction, or credit allowed under an existing general revenue tax.” In other words, this language preserves the current simple majority vote requirement for either replacing the income tax with an end-user sales tax (which is a consumption or "fair" tax, not a VAT) or for closing loopholes in an existing tax. Neither option imposes a flat tax. The Amendment simply maintains the same simple majority vote requirement for flattening the tax code as is currently the case.

Question 5. Is supporting the Compact an electoral liability?

Answer: Voting for the Compact is a political positive for an elected official’s career. Not only have thousands of Americans expressed their support for the Compact for America initiative, but our polling data shows supermajority levels of support for the policy ideas advanced by the Compact and the Compact itself. You can read our Michigan poll here. Our national poll is here. And we have many more polls available here.

Question 6. Since there was already a Balanced Budget Amendment process started in the 1980's, wouldn't resources be better spent on that?

Short Answer: The Compact approach and the older approach can run in parallel with positive synergies between them. Therefore, a binary choice should not be forced between them. However, if a choice must be made, the Compact approach furnishes greater certainty, safety and speed in delivering a ratified federal balanced budget amendment than the older approach (which actually started in the 1950s), which gives it a greater chance of ultimate success in delivering a ratified Balanced Budget Amendment.

Long Answer: It is a mistake to believe that both the older BBA effort and the Compact effort cannot be pursued at the same time. Each approach has its own unique risks and rewards. Both furnish positive synergies for the other. If the goal is to maximize the chances of getting to a Balanced Budget Amendment, one’s policy portfolio should include both approaches. Eggs should not be put in one basket in such a massive and uncertain political undertaking. Here's why both the Compact and older BBA efforts are synergistic:

  • If both approaches move forward, that presents multiple targets for the opposition, dividing and weakening the opposition, and enabling pathways around blockages that might uniquely stop one approach or the other.

  • If the older approach succeeds in organizing a convention, the Compact approach can furnish it with a fully vetted federal Balanced Budget Amendment ready for proposal and also with a head start on ratification (because four states or more will have already agreed to ratify the Compact’s amendment).

  • If the Compact approach succeeds first, the older approach could use its greater drafting flexibility to propose amendments that improve the Compact’s Balanced Budget Amendment (the amendment is great, but it might not be perfect!).

That being said, the bottom line is that the older BBA approach is both further away from the goal of securing a ratified amendment than the Compact approach, and it still suffers from the same problems that derailed it in the past.

The older BBA effort is further away from the goal of securing a ratified amendment because getting to a convention is not the same as ratifying an amendment. Even if the earlier effort got to a convention in the next two or three years, it would still need to draft an amendment, secure a congressional resolution to refer the amendment to the states for ratification, and secure ratification from either 38 state legislatures or 38 state conventions. Getting to a ratified amendment through the earlier BBA effort could take decade or more.

By contrast, the Compact approach only needs one congressional resolution and 34 more states to join the effort to generate a ratified amendment thereafter in only six weeks and one day. In principle, the Compact approach could generate a ratified amendment next year. The same cannot be said even in principle for the older BBA approach. This fact counsels in favor of a policy “portfolio” that includes the Compact approach.

Additionally, and sadly, the earlier BBA effort is a story of taking one step forward and two steps back. The older effort actually began well before the 1980s, with the earliest related proposals being made in the 1950s, and a head of steam not growing until the mid-1970s. Although the current proponents claim that they are only 6 states away from triggering a convention, the earlier effort claimed to be much closer in the 1980s. The effort’s proponents then-claimed the effort was only 2 states away from the magic 34 threshold in the 1980s. But they still failed—even with the energetic support of Ronald Reagan and Milton Friedman. After failing to secure the supposedly 2 remaining states in the 1980s, the earlier effort dissipated and saw more than a dozen and a half of its states rescind the necessary resolutions through the 1990s and early 2000s.

Although the earlier effort has fought back valiantly from those lows, it would be unwise to bet on it to the exclusion of the Compact effort for three reasons.

  • First, there is no Ronald Reagan leading the charge this time around.

  • Second, the reasons for the earlier approach’s failure to generate a convention, much less a ratified amendment, despite more than 50 years of attempts are still present today; namely a lack of certainty about the amendment process, a lack of certainty about the merits of the amendment that might be proposed, and a lack of certainty about ratifying the amendment.

  • Third, although the advocates of the older approach claim 27 or 28 BBA applying resolutions exist, whether the applying resolutions can aggregate towards the magic number of 34 is subject to serious doubt. Our analysis shows that no more than 9 to 11 of the applying resolutions request a compatible amendment agenda for the convention being sought. You can read our analysis here.

In fact, the only way that the older BBA effort can aggregate more than 9 to 11 resolutions is if the specification of the desired amendment agenda or the operative language in an Article V applying resolution has no legal effect or significance. There are serious reasons to doubt whether this is legally correct, as you can read in our analysis here. So there is a significant risk of litigation blocking a convention ever being called through the older approach to the extent that it relies on more than 9 to 11 resolutions.

In contrast, the Compact approach addresses all the problems of the earlier approach by ensuring that everyone knows up front the details of the amendment process, the details of the amendment itself, and also that the necessary number of states have agreed to ratify the amendment. The Compact’s applying resolutions aggregate because they are necessarily substantively identical (for a state to adopt the Compact, the legislation must be substantively identical). These are all unique advantages that counsel in favor of including the Compact approach in the policy portfolio to compensate for the deficiencies of the older approach, in order to maximize the chances of success in delivering a ratified Balanced Budget Amendment.

#articleveducation

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