With the sound of the gavel at noon, September 12, 2017, the Arizona State Capitol became host to the first Balanced Budget Amendment Planning Convention convened under Article V of the United States Constitution and a resolution of the Arizona House of Representatives, HCR 2022. This is the first effort to convene an Article V convention since 1861 when a convention was held in Washington DC, in a futile effort to stave off the Civil War.
The purpose of the Phoenix convention is to set forth the ground rules for a future convention to consider a balanced budget amendment to the federal Constitution. To quote House Speaker, JD Mesnard, the author of HCR 2022, "Arizona is sending a message that if the federal government can't get its fiscal house in order, the states will do it for them…." The idea of amending the Constitution to require a balanced budget has gone through many iterations. Repeated efforts have been made in Congress without success. Out of frustration, proponents of a balanced budget have turned to Article V.
To date, 27 states have endorsed an amendment in one form or another, to require the federal government to balance its budget. Last weeks convention in Phoenix drew 72 delegates duly authorized by nineteen state legislatures with three states sending official observers. Among the first items of business was the election of Arizona legislator and Majority Whip, Rep. Kelly Townsend, to Chair the Convention with Utah Rep Ken Ivory, elected Vice Chair.
The genius of our Constitution is that it provides for change and adapting to unforeseen circumstances in an orderly and lawful way. In our 230 year history as a nation we have amended our founding document 27 times. In every case this process involved an act of Congress referring a proposed amendment to the states. But Article V provides an alternative way to change our government. "Congress….upon application of the Legislatures of two thirds of the several states, shall call a convention for proposing amendments." With 27 of the needed 34 states now calling for a balanced budget amendment, the once far fetched idea of an Article V convention may soon become a reality.
How would this process work? According to the Balanced Budget Task Force, once an Article V convention is convened, a simple majority of the 50 state delegations, each with one vote, has the authority to propose an amendment. Congress retains the authority to decide whether ratification is carried out by state legislatures or state ratification conventions. But once decided, ratification of a balanced budget amendment by thirty eight states would enshrine it as the 28th Amendment to the Constitution.
The power of Washington DC in state/federal relations has become so dominant that it is easy to understand why many people unfamiliar with the Constitution assume the states are political subdivisions of the national government. In fact, it's the other way around. The federal government was created by the states and they retain sovereignty under our federal system. The 10th amendment places strict limits on the federal government, "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." The United States is a sovereign nation composed of sovereign states. This means the states could reorganize or even abolish the federal government. The federal government has no such power over the states. Article V is the ultimate guarantor of the sovereignty of the states and their control of the national government.
With the exception of the Civil War convention of 1861, an Article V convention has never been attempted. Why now? Proponents can name 22 trillion reasons and they are increasing every day. Twenty two trillion dollars is the accumulated national debt since our nation's founding. Over half of this amount—14 trillion to be exact—has been borrowed since 2000. This staggering debt continues to grow under both Democratic and Republican administrations.
Despite the warnings of many economists, not to mention common sense, that our debt is unsustainable and threatens our solvency as a nation, there is a lack of political will to curb spending. Now states are stepping forward to exercise the political leadership lacking in Washington DC.
The high water mark for our national debt was WWII when it reached 122% of GDP. But the extraordinary circumstance of war was followed by decades of economic growth. By 1970 our Gross National Debt had fallen to 37% of GDP. But since then the federal government has increasingly financed its operations through borrowing. Today our gross national debt stands at 107% of GDP. This compares to China at 66%, Mexico at 44%, and Russia at 11%.
The United States is an outlier among economically developed nations in that we run massive trade deficits with the rest of the world and we finance a large percentage of our national government with borrowed money. The persistence of these circumstances has convinced many state legislators, myself included, that our national government is on a collision course with economic reality. Left unchecked, our growing national debt will destroy our economy, impoverish our people and threaten our existence as a sovereign nation. Last week's Phoenix Convention marks an historic effort by the states to use their powers under Article V of the federal Constitution to stave off the day of reckoning.