Last week, Representatives Mike Pence (R-Ind.), Jeb Henserling (R-Texas), and John Campbell (R-Calif.) introduced a joint resolution that would, if passed by two-thirds of each house and then by three-quarters of the states, amend the Constitution to limit federal spending to 20 percent of the Gross Domestic Product. Congress could waive the limit if a declaration of war was in effect (the last time Congress declared war was December 8, 1941, 68 years and two major and several minor wars ago). In peacetime it could override the limit by a two-thirds vote in each house.
As the congressmen explain at length here, 20 percent of GDP is the postwar historical average of federal spending. And, indeed, there is an inverse correlation between federal spending as a percentage of GDP and national economic prosperity. Michael Barone this morning has a good example of the relationship between government spending and prosperity. Current spending, enormously increased in the last year and a half, is currently about 24.7 percent of GDP. If ObamaCare etc. go through, federal spending will be at permanently higher levels.
Is this a way to go? Similar amendments have been around for at least 25 years and have never gone anywhere. Certainly the present Congress would pass a joint resolution against motherhood and apple pie before it passed this one. And even if it did, it is hard to imagine the legislatures of three-quarters of the states ratifying it. States have become ever more dependent on federal money over the past few decades and are especially so now, with state budgets bleeding red ink.
Even in prosperous times, it is not likely that state legislatures would vote to put limits on the federal gravy train. (Memo to the congressmen: the Constitution calls for amendments passed by Congress to be ratified either by state legislatures or by conventions called in each state for that purpose, at the option of Congress. The latter method has only been used once, to repeal Prohibition, when Congress knew that many state legislatures were under the thumb of “the preachers and the bootleggers.” If you’re serious about passing this amendment, conventions of citizens elected to address the matter are the answer. The Tea Partiers would have a field day.)
The proposed amendment also states that the “Congress shall have the power to enforce this article by appropriate legislation.” By not specifying how to define GDP, that’s an open invitation to cook the books, something at which Congress is very expert.
Personally, I think this amendment is misguided and might seriously hamstring the federal government under certain circumstances and lead to even worse book-cooking. California’s requirement that taxes be raised only with a two-thirds vote in each house of the state legislature hasn’t restrained state spending and only caused a grand proliferation of accounting smoke and mirrors. California is facing fiscal ruin.
I’d prefer an amendment requiring the federal government to keep honest books and have those books audited by a genuinely independent authority, which would also “score” proposed legislation as the CBO does now. But an independent authority would have the power to ask the questions, not just answer the ones Congress asks. Congress wouldn’t like that idea any better than linking spending to GDP. But it is very hard to come up with an argument as to why the federal government should be allowed to use phony accounting.