This week, a trio of fiscally conservative House Republicans released a document painting a dire picture of the country’s finances. “Over the last five years,” they write, “federal spending has increased from nearly 20 percent as a share of the economy to 24.7 percent as the government’s expenditures increased from $2.47 trillion to $3.52 trillion — a 42 percent increase.”
The congressmen point out that this is the highest level of federal spending as a percentage of the economy since we fought and won World War II. This high spending has been accompanied by an explosion of government borrowing, as the federal budget deficit has ballooned from an already-high $318.3 billion in 2005 to a staggering $1.4 trillion in 2009. The national debt has grown from $7.3 trillion to $11.9 trillion over roughly the same period — “a five-year increase equal to the nation’s entire accumulation of debt from the presidencies of George Washington to Bill Clinton.”
And this will be remembered as a golden era of fiscal responsibility compared to what is to come. As the Baby Boomers retire, Social Security, Medicare, and Medicaid will as presently constitute go bankrupt. The public debt will exceed 110 percent of the economy in 2026 and climb past 200 percent by 2040.
Worse, all these projections assume that Washington does not take on any further unsustainable spending commitments. That means it doesn’t take into account trillion-dollar stimulus packages, health care bills, bailouts, or wars. To keep pace, taxes would have to more than double and the government’s share of the economy would increase by a commensurate amount.
To contend with this looming crisis, Reps. Mike Pence (R-Ind.), Jeb Hensarling (R-Texas), and John Campbell (R-Calif.) have proposed a constitutional solution: on Tuesday, they unveiled a Spending Limitation Amendment (SLA) to cap federal spending at 20 percent of the U.S. economy. Yesterday Pence and Hensarling held a conference call making their case.
“I’m not naïve about the fact that 5,000 amendments have been offered and only 27 have been enacted,” Hensarling said at the outset of the call, acknowledging the hurdles ahead of ratification. But he believed the rising public concern over excessive borrowing and spending by Washington required a national consensus as to the proper size of the federal government.
The SLA could only be waived when an official declaration of war is in effect or by two-third majorities of both houses of Congress. As its sponsors explain in the document announcing its release, the proposed amendment “does not promise a particular spending plan of which programs to restrain and by how much.” They quote columnist George Will: “The Constitution stipulates destinations. It does not draw detailed maps.”
Under the SLA, the stipulated destination would be a federal government that consumes only its historic average share of the national economy. “Total annual outlays shall not exceed one-fifth of the economic output of the United States of America, unless two-thirds of each House of Congress provide for a specific increase of outlays above that amount,” the amendment reads. “Total outlays shall include all outlays of the United States Government, except for those for repayment of debt principal.”
Neither Pence nor Hensarling let their own party off the hook. The massive spending increases they identify in arguing for the SLA all began under the big-government presidency of George W. Bush. “Some of the toughest battles I’ve fought have been against the leaders of my own party in Congress,” says Pence. “Both parties have shown an inability to rein in spending. We’ve seen Gramm-Rudman, the line-item veto, and PAYGO falter… the only force strong enough to rein in spending is our national charter.”
Hensarling says that even the strongest budget-control rules were “only effective for a short period of time, as political pressure grew and Congress un-enacted what it enacted.” And the Texan maintained that the Democrats were now making things even worse: “We were already heading toward a cliff, they [Barack Obama, Harry Reid, and Nancy Pelosi] are pressing on the accelerator.”
Most proposed constitutional amendments go nowhere, especially those with ideological implications. The Equal Rights Amendment came close before Phyllis Schlafly and company beat it back. The political landscape is cluttered with conservative constitutional amendments that have similarly failed, dealing with issues ranging from abortion to flag burning and forced busing. Milton Friedman concluded Free to Choose with several suggested amendments, including one similar to the SLA.
Pence and Hensarling think it will be worthwhile to even start the debate. “The amendment for women’s suffrage probably wasn’t seen as likely for passage,” Hensarling says. “Just having the balanced budget amendment debate in Congress during the early to mid-’90s frankly had a beneficial impact on spending patterns for the time.”
But they do hope the SLA can actually be ratified. “We need the American people expressing themselves through our cherished national charter,” Pence says. “Other than the Ten Commandments, the highest bar you can set is the Constitution,” quips Hensarling. They quoted Rep. Tom McClintock (R-Calif.) as saying “you can peg California’s decline to when California eliminated their state spending caps.”
Without some kind of brake on federal spending, we will see the Californication of the United States. The suffocating growth of government will compromise America’s freedom, prosperity, and national security — “Look at who we’re having to borrow the money we don’t have from,” says Pence.
Even without an amendment, it is a fiscal crisis that could have been averted by heeding the Constitution in the first place.