The goal of the Compact for America (“CFA”) initiative is for the states to propose and ratify the powerful balanced budget amendment that is contained in the Compact for a Balanced Budget into the United States Constitution in as little as one session year, with a "do or die" date of April 12, 2031 (when the Compact for a Balanced Budget already joined by the States of Alaska, Arizona, Georgia, Mississippi and North Dakota sunsets).
Over two years in the making, the Compact for a Balanced Budget is now a reality. With the signing
into law of the Compact legislation by the governors of Georgia and Alaska in April of 2014, an officially recognized organization of states is now ready to attack the problems of an out of control Congress and a level of national debt that is crippling our future generations. When states enter into a formal contract to legally obligate themselves among each other in an organized effort to achieve a common goal, such a contract is called a “compact”. Currently, there are over 200 compacts in existence, and each state is typically a member of 20 or more compacts.
The Compact approach allows for the specification of the text of the amendment to be advanced by the limited convention it organizes under Article V of the U.S. Constitution-avoiding the very difficult sales pitch that “we have to organize a convention to find out what it might propose.”
The “payload” of the Compact is a powerful balanced budget / debt control amendment where the states are re-positioned as a “board of directors” over Congress. In this role, the states control the new constitutional debt limit that is established in the amendment. Congress can only increase the debt limit in the future with the approval of a majority of the state legislatures. The policy implications of the amendment and the state control mechanism are huge and are intended to instill fiscal responsibility and restraint on the part of the U.S. Congress. Time is of the essence – the future of our children and grandchildren are in jeopardy.
Specifically, the proposed Balanced Budget Amendment would define a balanced budget in common sense terms: cash-flow-out cannot exceed cash on hand except for borrowing under a constitutional debt limit. That debt limit would not be in the hands of Washington alone; it could be increased, but only with the approval of a majority of state legislatures. The amendment avoids a game of chicken over debt limit increases by requiring spending impoundments when borrowing reaches 98 percent of the debt limit. Finally, the amendment would quell fears of across-the-board tax increases by requiring any new income or sales tax to secure two-thirds approval of both houses of Congress, excepting measures that close loopholes or completely replace the income tax with consumption (end-user sales) tax (and leaving untouched the current constitutional rule for unspecified revenue measures, such as tariffs and fees).
THE DELIVERY VEHICLE
The Compact approach makes advancing constitutional amendments to the U.S. constitution from the states eminently plausible. It does this by condensing into a single enactment joined by 38 states ALL of the legislative acts involved in originating a constitutional amendment from the states under Article V of the U.S. Constitution. It also consolidates into a single resolution passed ONCE with simple majorities and no presidential presentment all of the stages of the amendment process that Congress controls. This cuts the time and resources needed to originate a balanced budget amendment from the states dramatically-by sixty percent or more.
More concretely, in addition to advancing a powerful, yet plausible balanced budget amendment payload, the Compact and the counterpart congressional resolution include:
The Article V application to Congress (specified in the Compact);
An interstate commission that organizes the convention (specified in the Compact);
The convention call (specified in the congressional resolution);
All delegate appointments and instructions (specified in the Compact);
The convention location and rules (specified in the Compact);
An agenda limited to the consideration of the proposed amendment (specified in the Compact);
The ratification referral (specified in the congressional resolution);
The ultimate ratification of the proposed amendment (specified in the Compact).
The consolidated design of the Compact delivery vehicle thus allows for the amendment to be ratified as quickly as within twelve months provided that 38 states have joined the Compact and Congress has activated it. The Compact approach is uniquely powerful and impactful for other reasons as well.
The Compact's "turn-key" approach eliminates any possibility of a “runaway convention.” It compels all member state delegates to follow convention rules that limit the convention agenda to an up or down vote on the amendment it proposes and to return home if those rules fail to hold. It prohibits member states from expanding the scope of the convention, violating the convention rules, or ratifying anything other than the contemplated amendment.
The Compact Commission is uniting the states in the effort and furnishing an institution to parley with other institutions, including Congress, to maximize political strategies to get the job done.
The passage of the Compact pre-ratifies the balanced budget amendment it contemplates-and that pre-ratification is triggered not only by the convention organized by the Compact, but any other convention that proposes the same Amendment (including one organized by Convention of the States), as well as by the direct proposal of the Amendment by Congress. Even if the Compact fails to organize the convention it contemplates, its proposed amendment will still have political legs (before the Compact's sunset date of April 12, 2021).
As proclaimed in a recent Heartland Institute policy report, this effort is “Article V 2.0.”
Compact for America Educational Foundation, Inc. (the "Educational Foundation") will take the lead on all educational efforts. The Educational Foundation is a not-for-profit tax-exempt educational organization formed under section 501(c)(3) of the Internal Revenue Code and is recognized as such by the Internal Revenue Service pursuant to the IRS determination letter dated October 1, 2014. Additionally, the Foundation was retained to serve as the Compact Administrator for the Compact for a Balanced Budget by the Compact for a Balanced Budget Commission on January 13, 2015 pursuant to a technical services agreement. The Educational Foundation is formed primarily to educate elected officials, citizens and residents of the United States and the several states of the use of an interstate compact agreement and counterpart federal legislation to coordinate the use of Article V of the U.S. Constitution by state legislatures and the US Congress to originate, propose and ratify constitutional amendments. Accordingly, the Educational Foundation serves as a pro-bono technical advisor providing procedural guidance to various state legislators, compact commissioners, compact commissions, members of Congress, state governors, and interested citizens on matters related to the development, education, evaluation, enactment and implementation of related interstate compact agreements.
With the Education Foundation's leadership, the general public, academia, think tank scholars, donors, state legislators and members of Congress will first find out details of the CFA initiative online. The CFA briefing teams will provide further education and technical details to the general public, academia, think tank scholars, donors, state legislators and members of Congress through widely publicized non-partisan speeches, debates and forums, as well as through scholarly publications.
PASSAGE OF THE COMPACT
38 states are required to join the Compact before the amendment process goes live. State legislatures will have to pass the Compact bill which will be signed into law by the state governor. Congress is required to pass one simple-majority resolution in each house to activate the Compact. Once 38 states join the Compact and Congress passes the resolution, the states will then officially meet to formally propose and ratify the BBA payload into the U.S. Constitution.
The only Compact for America entity authorized to influence legislation either directly or by way of grassroots calls to action, without regard to the Educational Foundation's technical advisory services contract is Compact for America, Inc. ("Compact for America Action"), which is a not-for-profit tax-exempt social welfare organization under section 501(c)(4) of the Internal Revenue Code and recognized as such by the Internal Revenue Service. The Educational Foundation is making every effort to ensure its operations are not confused with those of Compact for America Action.