A Compact to Save America

A novel, federalist approach to controlling the debt.

The problem is excessive debt — to be specific, our nearly $19 trillion national debt. The solution is a Balanced Budget Amendment (‘BBA’) to the U.S. Constitution that includes an effective mechanism to control debt.

The American people want such an amendment. But for 30 years, their efforts to secure one have been blocked by a Beltway leadership that does not want balanced budgets or reduced debt. It wants business as usual.

Happily, there’s a way around this roadblock. It’s called the Compact for a Balanced Budget, and, when passed by 38 states, it will finally get our national debt under control.

The compact has been joined to date by four states: Georgia, Mississippi, Alaska, and North Dakota. They have set up a commission to coordinate their efforts. The compact is being considered in numerous states.

It has been introduced here in North Carolina by Rep. Chris Millis (R-Hampstead) as House Bill 366. That bill was approved last week by the House ‘Judiciary I’ Committee and is now pending in House Appropriations. The enactment of the bill this session would put North Carolina in the first rank of states leading the effort to save America from fiscal ruin.


The Compact for a Balanced Budget is a uniquely innovative interstate agreement that advances a federal BBA in a single-state legislative bill that is activated by a single congressional resolution. Instead of the numerous legislative steps that would normally be needed in a state-led constitutional amendment effort, the Compact consolidates everything into just one bill in each legislature. Once that bill has been passed in essentially identical form by 38 states and activated by Congress, the BBA becomes part of the U.S. Constitution.

Because the process is state-led, the congressional resolution requires only a simple majority in each house of Congress. And it doesn’t require the president’s signature.


Think of the compact as the launch vehicle, and the BBA as the payload. The vehicle is launched by the states; the payload shifts power to the states. Should the payload reach the target (ratification), a dramatic rebirth of federalism will occur, and a wonderful reflowering of local self-government.

For the first time in more than a century, North Carolina will have a real seat at the budget table in Washington.

The pre-drafted BBA embedded in H.B. 366 repositions the states over the federal government as a fiscal “board of directors.” The amendment limits spending at all times to cash on hand. Congress may still borrow up to the new debt ceiling established by the Amendment, but any increase in the national debt above the ceiling must be approved by a majority of the state legislatures.

To ensure that Congress favors spending restraint over tax hikes as the default path to closing deficits, the pre-drafted BBA adds a new supermajority requirement for increasing current taxes or providing for any new taxes. At the same time, the amendment retains the traditional simple-majority rule for revenue measures that cause the least economic harm (and generate the most political pushback), such as eliminating tax loopholes and replacing income taxes with a consumption tax.

The net effect will be spending restraint and tax reform, which will lead to robust economic growth.


One of the legally necessary steps along the ratification path is the holding of an Article V convention of the states to formally propose the amendment. This step is required by the Constitution. It was placed there by the Founders to ensure that the states seeking an amendment agree on the exact text of that amendment before formally proposing it for ratification by the states. In the 1780s, there was no internet or email; people had to meet in person. Hence the convention step.

Because that step has never yet been taken, some Americans fear the first such convention will ‘run away’ and perhaps threaten liberty. These fears are understandable and must be addressed.

To address state lawmakers’ legitimate concerns, many constitutional scholars, legislators and think-tank experts labored over several years to come up with a legally binding approach that eliminates any possibility of a runaway convention.

The solution is an interstate compact. Compacts are legally binding, like treaties. The compact in H.B. 366 prohibits member states from expanding the scope of the convention, violating the convention rules, or ratifying anything other than the contemplated BBA. Thanks to the compact, everyone knows in advance that each state gets one vote and that the agenda consists of three significant steps, to be taken in this order: 1) adopt the pre-drafted rules; 2) vote up or down on the pre-drafted BBA (no amendments allowed); 3) adjourn. Any actions deviating from this legally binding agenda are legally null and void ab initio, as if they never happened. These rules are enforceable by any member-state’s attorney general.


H.B. 366 takes an extremely cautious, ‘no surprises,’ belt-and-suspenders approach to meet the demands of state legislators across the country who seek not only to circumvent a runaway Congress but also to avert a runaway convention.

Specifically, H.B. 366 creates a legally binding agreement that, in essence, pre-commits 38 states (the number needed for ratification) to the entire constitutional amendment process in advance, so that a specific, pre-drafted federal BBA is formally proposed within 24 hours at the convention it organizes.

There are several ongoing Article V movements today, but only the Compact for a Balanced Budget assures the safety, certainty, speed, and synergy that state lawmakers rightly demand. H.B. 366 embodies what many call ‘the only safe and effective Article V approach.’

Here is North Carolina’s and America’s best hope to save our country from fiscal ruin.

Dean Clancy, a former top White House budget official, is a member of the Council of Scholars of the Compact for America Educational Foundation, Inc., a 501(c)(3) nonprofit organization working to advance a federal balanced budget amendment by way of an interstate compact. Follow him at deanclancy.com or on Twitter at @DeanClancy.

[Originally published at JonesandBlount.com, August 10, 2015. @JonesandBlount. Republished at deanclancy.com.]

Leave a Reply

Your email address will not be published. Required fields are marked *