Liberty Amendments IV - Limit Federal Spending

Warning! This Amendment has Merit but Requires Change Before Incorporation

SECTION 1: Congress shall adopt a preliminary fiscal year budget no later than the first Monday in May for the following fiscal year, and submit said budget to the President for consideration. 

SECTION 2: Shall Congress fail to adopt a final fiscal year budget prior to the start of each fiscal year, which shall commence on October 1 of each year, and shall the President fail to sign said budget into law, an automatic, across-the-board, 5 percent reduction in expenditures from the prior year’s fiscal budget shall be imposed for the fiscal year in which a budget has not been adopted. 

SECTION 3: Total outlays of the United States Government for any fiscal year shall not exceed its receipts for that fiscal year. 

SECTION 4: Total outlays of the United States Government for each fiscal year shall not exceed 17.5 percent of the Nation’s gross domestic product for the previous calendar year. 

SECTION 5: Total receipts shall include all receipts of the United States Government but shall not include those derived from borrowing. Total outlays shall include all outlays of the United States Government except those for the repayment of debt principal. 

SECTION 6: Congress may provide for a one-year suspension of one or more of the preceding sections in this Article by a three-fifths vote of both Houses of Congress, provided the vote is conducted by roll call and sets forth the specific excess of outlays over receipts or outlays over 17.5 percent of the Nation’s gross domestic product. 

Levin, Mark R. (2013-08-13). The Liberty Amendments: Restoring the American Republic (pp. 73-74). Threshold Editions. Kindle Edition. 

Everyone in the United States would agree that the Federal Government taxes and spends too much.  Congress would agree, the Democrats would agree, and so would the Republicans.  In spite of that, no one does a thing about limiting Federal spending.  For the Republicans to limit the Democrat's spending would mean that the Democrats would retaliate by blocking the Republican's spending.

Mr. Levin's book does an excellent job of making the case for limiting Federal spending and I highly recommend reading it to understand just how much we need to force restraint upon the Congress' spending.  The only question is how to restrict it and by how much.

Mr. Levin first requires, in Section 1, that Congress submit a preliminary budget but does not define a preliminary budget.  This is a wasted exercise and there are no consequences if they do not and, even if they do, there is no requirement or expectation that those budgets have any basis in reality.  He mentions that the preliminary budget be submitted for presidential consideration - whatever that is.

Section 1 is a meaningless exercise and should be removed from this proposal.

Section 2 is an excellent idea, finally putting some teeth and consequences into the Congress' failure to do their job.

Planning and running a government agency requires time and effort.  It is irresponsible for the Congress and the President to not pass a budget in time for government to run efficiently - Mr. Levin virtually ignores the President's role and responsibility in the budget process: if he doesn't sign the bill there is no budget no matter what Congress does.  I recommend the following slight, but significant, changed Section 2:

SECTION 2: Shall Congress fail to pass, or the President fail to sign, a final fiscal year budget bill at least 30 calendar days prior to the start of the next fiscal year, which shall commence on October 1 of each year, an automatic, across-the-board, 5 percent reduction in all expenditures, except for Constitutionally protected wage guarantees, from the prior year's fiscal budget shall be imposed for the fiscal year in which a budget has not been adopted.  The 5 percent reduction will not be altered or varied for that fiscal year, even by a later passed budget, except for in time of war declared by a majority of both houses of Congress according to Article I, Section 8.

What my version does is to bring the mention of the President closer to the problem along with Congress.  Mr. Levin's version uses a flawed logic statement that can never pass evaluation:  Shall the congress fail to pass and the President fail to sign.  If the Congress does not submit the budget then the president cannot fail to sign.  He cannot "fail" to sign something that does not exist.  Nit-picking, you say?  Don't believe for a minute that Congress and the Supreme Court will be any less intent on challenging the meaning of the words of this or any other of the Liberty Amendments.

My version also eliminates any confusion that, should Congress and the President fail to act, the 5 percent reduction stands for the year but it allows for the fact that Congressional and Supreme Court wages cannot be reduced during the term of office.  It also allows for an exception in the case of actual war - or at least a fake war that Congress is willing to actually stand up and call a war.

Section 3 is good but,when combined with Section 5, it appears to eliminate the ability of the Federal Government to borrow - something, up to now, permitted explicitly in the Constitution.  When discussing Section 5, I'll address that; otherwise, Section 3 is right on target.

I agree that the Federal Government's ability to spend should be tied to the wealth of the nation as described in Section 4 but I think 17.5 percent of the GDP is much, much, too high.  I propose the the following version of Section 4.

SECTION 4: Total outlays of the United States Government for each fiscal year shall not exceed 15 per cent of the Nation's gross domestic product (GDP) for the previous calendar year.   

Gross domestic product shall be calculated using the same formula used by the Bureau of Economic Analysis, or other Federal agency assigned as the primary agency responsible for publishing the GDP in the last full fiscal year prior to ratification of this amendment..  Any changes to the formula used must be approved by three fifths of the legislatures of the various states.   

Every twelfth year, starting from the first full fiscal year after ratification, the maximum allowable outlay of the United States Government will be reduced by 1 percent of GDP until the maximum allowable outlay is 10 percent of GDP.

As I mentioned, the combination of Section 3 and Section 5 remove the ability of Congress to borrow money.  The Federal Government can only spend an amount up to the amount of receipts and borrowed money cannot be counted as receipts so the Federal Government can borrow money but it can't spend it - with one fatal flaw: the Government can use borrowed money to pay interest on its debt since debt payments, according to Mr. Levin's Section 5, are not part of outlay.  Mr. Levin's plan allows the Government to borrow money to pay the interest on borrowed money.  That is a recipe for disaster.  I propose the following as a substitute for Section 5:

SECTION 5: The Federal Government may not borrow money without the express consent of a majority of both houses of Congress as determined by a roll-call vote.  Congress may only provide consent to borrowing during times of war, declared by Congress according to Article 1, Section 8 of this Constitution. 

Congress shall expend from current receipts, funds to repay and reduce the National debt each year by 2 percent of the National debt owed on the day that this amendment is ratified and shall continue to expend from receipts each year to reduce the debt by 2 percent of that original debt figure until the debt is below 25 percent of GDP upon which Congress will expend each succeeding year the funds to reduce the National debt by 1 percent of the ratification day debt until the National debt is paid in full.

Any money borrowed during time of war must be paid in full within 40 years of the end of hostilities or, in any case, within 50 years of the date of borrowing, repayment to be at a minimum of 2 percent of the original debt each year from the date the debt was incurred.  Repayment of wartime debt can be made with additional borrowed funds upon approval of the majority of both Houses of Congress but this additional debt must follow the same repayment rules of any other wartime debt incurred.

Any funds expended in the repayment of the National debt shall not be counted against government spending limits defined in Section 4 of this Amendment but must come from the receipts for the previous fiscal year without borrowing.  

After the Constitution was ratified, the National debt was paid off in about 40 years.  After the Civil War, it was virtually paid off after about 50 to 60 years - though never again completely paid off.  Other than in World War II, the debt has never been as high as it is today or than it was even before the years leading up to the attacks on the World Trade Center and Pentagon on September 11, 2001.  In fact, remember those Clinton years where he supposedly balanced the budget?  The debt increased to what was, then, the highest in relation to GDP ever except World War II - the same condition we're in today.  Clinton's "balanced" budget was balanced with borrowed money.

Section 6 is pretty close to what it should be except that, as is, a super-majority of Congress can completely undo the entire amendment.  In addition, the extra accountability required for over the stated 17.5 percent needs to apply to the adjusted maximum legal outlay I defined in section 4 instead of any specific number - though, over 60 years, the specific number does become a constant 10 percent:

SECTION 6: Only in times of war, declared by the majority of both Houses of Congress according to Article 1, Section 8 of this Constitution, Congress may provide for a one-year suspension of one or more of the preceding sections in this Article by a three-fifths vote of both Houses of Congress, provided the vote is conducted by roll call and sets forth the specific excess of outlays over receipts or outlays over the maximum allowable outlay according to Section 4 of this Article with line item detail to within 1 tenth of 1 percent of the excess.  No more than the next fiscal year's extension may be approved by the Congress at any time.

As I've shown, the spending limits Mr. Levin proposes are too little and too flexible.  He does, though, touch on all of the right concerns.  I hope that my suggested alternative sections at least serve to bring the debate to real, hard, serious, control of Congressional spending.  Without the types of changes I recommend, this proposed amendment does not go nearly far enough to protect the wealth and earnings of Americans from being plundered by the Federal Government.

Protecting the United States of America and its legitimate allies from invasion or attack is the prime function of the Federal Government; everything else comes second to this responsibility.  My changes to Mr. Levin's proposals protect Congress' ability to spend and authorize spending in times of war but Government, just like you and me, must handle any other emergency by cutting our belts in other areas.  If a family member has serious health issues, we may have to put off buying a new car or larger house.  If there are disasters or emergencies in the United States, then other pet programs may have to be cut to fund what must be done.

The last change required to limit spending is to prevent any Congress from indebting the Nation for extended times into the future:

SECTION 7: No bill or authorization from Congress shall obligate the government beyond the next fiscal year.  No Congress shall have the authority to obligate in law any future Congress to approve any spending or to require default spending on any program.  No Congress shall fund, or require the funding, of any amount for any period of time beyond the next fiscal year.

The goal of Section 7 is to prevent unfunded obligations such as welfare programs.

We all want to reduce spending and, with the right changes, this amendment can help.  As written, though, it does not go nearly far enough and is more lipstick on a pig than it is reform.