A news service for the people of Michigan from the Mackinac Center for Public Policy

Federal Credit Card

Individual liberty advocates are opening a new front in the tea party battle against the federal government’s power to ring up bigger debts. They have created a proposed constitutional amendment that would require a majority of state legislatures to ratify any future increases in federal borrowing. But unlike many amendment proposals that require Congress to get the ball rolling, supporters of the “National Debt Relief Amendment” want to use local citizen activism and launch the amendment from state legislatures, as allowed under Article V of the U.S. Constitution.

Created by Dallas-based RestoringFreedom.org, the proposal would add the following language to the U.S. Constitution:

“An increase in the federal debt requires approval from a majority of the legislatures of the separate States.”

RestoringFreedom.org was co-founded by businessmen James Booth of Dallas, Texas, and Glenn Hughes of Scottsdale, Ariz. Hughes says the two men began by exchanging e-mails after they became “real frustrated with skyrocketing federal debt and we saw it as a real threat to our children and grandchildren and our nation as a whole.”

RestoringFreedom.org was born as the vehicle to set that right.

“[The] goal is to develop, bring and sell solutions to some of America’s problems,” says Booth.

During March of last year, following nine months of research and working on an ideal target for their combined energy, they hit upon the idea of adding the NDRA to the U.S. Constitution. Believing they had a winner of a proposal that could force Washington to put away the federal credit card, Booth and Hughes asked the Goldwater Institute — a free-market research think tank based in Arizona — to give it a look.

Goldwater was sold.

“They confirmed our belief that this amendment would actually lead to a balanced budget,” said Hughes in a series of videos produced by Goldwater to educate Americans about the idea.

“Fifty states with 7,500 legislators will have the opportunity to look behind the curtain and see what is going on in Washington, D.C., when it comes to mortgaging our future,” said Nick Dranias, director of the Center for Constitutional Government at Goldwater, in one of their videos. “[If] there was ever a glaring omission in the constitution, it is the omission of any mechanism by which to control the ability of the federal government to generate debt.”

Because the states cannot deficit spend and must balance their annual budgets, state-level politicians are likely to have a less profligate attitude toward mortgaging the nation, contends Byron Schlombach, director of Goldwater’s Center for Economic Prosperity.

And then there are the voters themselves. Rather than going to Washington, D.C., state politicians are much closer to the people they represent and thus easier to influence if the taxpayers want Washington to reduce spending. Schlombach argues that this will alter the way government borrows money in America.

“If the federal government thinks it is wise to deficit spend, we will have a full out, national open debate over it.”

The main principle driving the “tea party” movement is a backlash against federal debt and spending.  It was inadvertently launched in the spring of 2009 from the floor of the Chicago Mercantile Exchange by CNBC reporter Rick Santelli, who called for a “Chicago Tea Party” to protest federal plans to bailout imprudent home owners. It has continued with opposition to the federal stimulus bills and the passage of ObamaCare.

The politics of passing an NDRA would seem a natural fit for the work of tea party sympathizers.

Ratification of a new amendment requires approval from three-fourths of the states, either through their legislatures or popular vote, whichever method is chosen by Congress. But Article V of the Constitution lays out two methods for proposing new amendments. Two-thirds of each house of Congress may propose new amendments and submit them to the states. Alternatively, the legislatures in two-thirds of the states may propose their own amendment ideas by demanding that Congress call a “convention for proposing amendments.”

Because it would significantly limit the power of federal lawmakers to create debt, it seems highly unlikely that Congress will eagerly send NDRA to the states.

But this dynamic works the other way if it is state legislatures that are being pressured to propose the amendment. RestoringFreedom.org and its allies will be asking state lawmakers to support a proposal that will give them veto power over federal spending — a substantial addition to their authority. And because those deficit-averse tea party members are closer to state capitols, pressure on state lawmakers to move the NDRA along toward ratification can be more easily and regularly applied.

But Goldwater’s constitutional experts see the support base for the NDRA as potentially much larger than just the tea party activists who are in the streets today.

“It is a battle worth having, no matter what,” says Clint Bolick, director of Goldwater’s Scharf-Norton Center for Constitutional Litigation. He envisions a movement in favor of passing the NDRA that will “galvanize the American people to express their concerns about a mounting federal debt.” This, he predicts, would provide the “broadest popular consensus” that today’s Americans have ever seen in support of a cause.

Indeed, even though Democrats now rule the White House and at least half of Congress, skeptical state legislatures of the future could just as effectively use an NDRA to check the spending power of Republicans if and when they again rule over most of Washington.

Dranias emphatically asserts that the NDRA is designed to cut both ways, and should be used to check the spending habits of all politicians.

“It doesn’t matter what political party is in control,” he says. “The same old story repeats itself: A Congress that is unable to restrain itself and continues to borrow and borrow from our children’s future to the point where government will no longer be sustainable at the federal level.”

In simplest terms, Dranias says the NDRA imposes on the federal government something that every household should have: Responsible adults to watch over the spending.

“The federal government, no matter who controls it, needs a co-signer on any new credit card that they give themselves,” he says. “The co-signer is the branch of government that is closest to the people.”

RestoringFreedom.org is actively soliciting members to join their cause. Membership is free, but they do take donations.

In the short term, members and sympathizers are being encouraged to contact their state lawmakers and urge them to pass resolutions to Congress demanding an amendments convention that will debate and propose a National Debt Relief Amendment.

The American Legislative Exchange Council is now in the preliminary stages of drafting model legislation that state lawmakers can introduce in favor of a NDRA.

The original version of this story was posted online on Dec. 16, 2010. 

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