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Compact For A Balanced Budget

November 14, 2014

Goldwater Institute’s Nick Dranias On A Balanced Budget Amendment (video)

In this 3 minute speech given at CPAC 2013, Constitutional Policy Director Nick Dranias explains why it is time for States to lead. 49 states have a balanced budget requirement or debt limit. They are far from perfect, but they keep most States out of the situation faced by the federal government—which borrows nearly 50 cents of every dollar spent. It is time we learn from the States. Based on what debt limits have worked best in the States over 150 years of trial and error, the Compact for a Balanced Budget advances a powerful Balanced Budget Amendment that will finally bring sanity to the federal government’s finances. An interstate compact provides the vehicle to advance the BBA because it transforms the otherwise cumbersome state-initiated amendment process under Article V of the United States Constitution into a “turn-key” operation.


Model Legislation:

The Compact for Balanced Budget consolidates everything in the Article V process into just two overarching pieces of legislation — one congressional resolution and one interstate compact joined by thirty-eight states. The model legislation below furnishes the nuts and bolts of this crucial reform vehicle.


Balanced Budget Amendment


Click above to review the text of the proposed BBA. This is for easy reference only; the proposed BBA is already included in the model legislation below. The proposed BBA would define a balanced budget in common sense terms: cash-flow-out must match cash-flow-in. By definition, deficit spending would be out of balance and would be limited by a constitutionally-imposed 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 an end-user sales tax, and leaving untouched tariffs and fees

Compact for State Legislators

Click above for the model interstate compact legislation that is the reform vehicle for the proposed BBA. It should be sponsored and introduced by state legislators. The compact allows the states to agree in advance to everything they control in the Article V process — from the text of the proposed amendment, to the application to Congress, to delegate appointments and instructions, to the selection of the convention location and rules, to the ultimate legislative ratification of the proposed BBA. The Compact has already been joined by Alaska and Georgia, and its commission is in the process of being populated.

Resolution for Congress

Click above for the model congressional resolution that consents to the Compact for a Balanced Budget and sets in motion the corresponding Article V amendment process. It should be sponsored and introduced by members of Congress. It is a “concurrent” resolution because it does not require Presidential approval. It is an “omnibus” resolution because it contains several legislative parts in a single act that completely fulfills Congress’ role in the state-initiated Article V process—from the consent to the compact, to the call for the convention, to the ultimate ratification referral of the proposed BBA.

Legislative One-Page Overview

This one-page document gives a 50,000 foot overview of the entirety of the Compact for a Balanced Budget and Congressional Resolution.


This presentation briefly explains the national debt problem facing the nation and why Compact for a Balanced Budget is a uniquely effective solution to that problem.

Compact for America Overview Briefing (video/presentation)

Intellectual Ammunition

The Compact for a Balanced Budget uses the “Compact for America” approach to Article V amendments. The links below lead to fact sheets that quickly and conveniently explain the merits of the Compact approach for legislators, citizens, and members of the media.




The Compact’s “Article V 2.0” Turn-Key Approach is Our Best Shot

How Compact for America’s “Article V 2.0” turn-key approach works in one page.

Why the Compact is Our Best Hope for the Future

What makes the Compact for a Balanced Budget’s proposed BBA the solution to our national debt problem in two pages.

How the Compact’s Safeguards Safely Regulate the Origination of a Balanced Budget Amendment

Why there is no plausible way that an Article V convention organized by the Compact for a Balanced Budget would deviate from its agenda and retain political legitimacy in two pages.

Why the Compact for a Balanced Budget Can Fix the National Debt

The case for joining the Compact for a Balanced Budget initiative in one page.

The Compact for America Approach to Article V is How to Make Federalism Relevant to the Youth (MP3 Download)

In a speech given before the Philadelphia Society, Dranias explains why a big, plausible reform idea like the Compact for America approach is just the thing needed to engage young people in the fight to restore federalism.

The Balanced Budget Amendment Thoroughly Explained Section-by-Section

This document thoroughly explains in plain English the Compact for a Balanced Budget’s powerful, yet plausible Balanced Budget Amendment.


Scholarly Resources


The Goldwater Institute’s Nick Dranias at Temple University School of Law


The Goldwater Institute’s Nick Dranias at Temple University

This presentation comprehensively explains why the Compact approach is the best Article V vehicle to reform Washington from the states in partnership with our congressional champions.

Introducing “Article V 2.0”: The Compact for a Balanced Budget

This Heartland Institute Report explains why the compact approach to advancing constitutional amendments is the next generation approach to constitutional reform.

Compact for America: An Economic Explanation

This Wyoming Liberty reprint furnishes an economic assessment of the balanced budget amendment at the heart of the Compact for a Balanced Budget.

Using a Compact for Article V Amendments: Experts Answer FAQs

The ground-breaking nature of the “Compact for America” approach to amending the Constitution has raised important questions, which are answered in this report by Goldwater Institute Constitutional Policy Director Nick Dranias, Cato Institute Senior Fellow in Constitutional Studies Ilya Shapiro, American Academy for Constitutional Education Director Shane Krauser, New York Times Best-Selling Author and Professor of History at Western Connecticut State University, Dr. Kevin Gutzman, and Senior Judge Harold DeMoss of the United States Court of Appeals, Fifth Circuit.

Fulfilling the Promise of Article V with an Interstate Compact (National Constitution Center, Dec. 6, 2013)

This opinion piece explains why Compact for America approach to Article V busts the two myths that have hobbled the Article V movement.

States Can Fix the National Debt: Reforming Washington With the Compact for America Balanced Budget Amendment, Goldwater Institute Policy Report No. 257 (April 23, 2013)

Click above for a scholarly analysis showing that Compact for America’s “Article V 2.0” turn-key approach to advancing a Balanced Budget Amendment is safe, effective and fully constitutional.

Use It or Lose It: Why States Should Not Hesitate to Wield their Article V Powers (Library of Law and Liberty January 2, 2012)

Click above for a thought experiment illustrating how states joining an interstate compact to use their amendment power under Article V would change Washington’s behavior.

Federalism DIY: 10 Ways for States to Check and Balanced Washington (Goldwater Institute 2011)

Click above for a scholarly analysis of the law governing interstate compacts.



The Case for State Control

Did George Washington Tell a Lie About State Control Over Article V Amendments? (National Constitution Center, Feb. 26, 2014)

This article demonstrates that the Founders intended for the states to control and target the Article V convention to desired amendments.


Goldwater Institute Article V Event


Goldwater Institute Article V Event (video)


Goldwater Institute Article V Event 2

Goldwater Institute Article V Event (video) part 2



Testimony Before Legislative Committees:


Nick Dranias, Article V, Compact for America, Feb 4, 2014



Original Sources:

Perhaps the most convincing evidence that an Article V amendments convention can be a safe and effective way to control the national debt is by looking at original sources written by the Founders. Their intent for Article V is clear.

U.S. Constitution Article V


Report of Proceedings on September 15, 1787 in Elliot’s Debates (1905), at 356-58


Report of Proceedings on September 15, 1787 in Farrand’s (1911), at 503-05

Founders’ repeated rejection of open convention language for Article V during 1787 Constitutional Convention.

Federalist No. 43

In James Madison’s Federalist No. 43 he writes “It, moreover, equally enables the general and the State governments to originate the amendment of errors, as they may be pointed out by the experience on one side, or on the other”.

Federalist No. 85

In Federalist No. 85, Alexander Hamilton writes “We may safely rely on the disposition of the State legislatures to erect barriers against the encroachments of the national authority”.

Washington’s Letter to Armstrong

In a letter from George Washington to John Armstrong, the future first president writes “It should be remembered that a constitutional door is open for such amendments as shall be thought necessary by nine States”.

Report On The Virginia Resolutions, House of Delegates

In James Madison’s Report On The Virginia Resolutions, House of Delegates (pg 501-02), he writes “…or two thirds of themselves (states), if such had been their opinion, might, by an application to Congress, have obtained a convention for the same object”:

Madison’s Letter on Nullification

James Madison’s letter on Nullification also made reference to the Article V amendment process when he writes “the final resort within the purview of the Constitution, lies in an amendment of the Constitution, according to a process applicable by the states”:


Compact in the News


Washington Free Beacon: Alaska Calls for a Balanced Budget Compact (4/24/2014)


Washington Post: George Will-Amend the Constitution to Control Federal Spending (4/9/2014)


Daily Caller: Next Time, Let’s Roll with the States Instead of Cruz-ing with Ted (11/19/2013)


Breitbart: Heeding the Fall of Rome in an Age of “Caesarism” (1/25/2014)


Mike Church Radio: Article V Convention for a Balanced Budget Amendment  (4/27/2013)


Cato Institute: A Compact for America to Rein in Government (1/4/2013)


Alaska Policy Forum: Alaska is Poised to Link Arms with Georgia to Fix the National Debt  (4/15/2014)


Georgia Public Policy Foundation: States Can Unite to Rein in Feds on Spending (1/17/2014)


MacIver Institute: A Constitutional Amendment To Require A Balanced Budget: Solution To the Federal Debt Addiction  (7/14/2014)


Heartland Institute: State Compacts Could Force Federal Budget Amendment (MP3 Download) (7/21/2014)



Further Reading


Model legislation


Compact for America blog


Compact for America Facebook page




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