Alaska joined Georgia to become the second state to pass the Compact for a Balanced Budget, a move that paves the way for a balanced budget amendment to the U.S. Constitution.
With two states having signed the compact into law, the country’s first-ever Compact Commission for an Article V convention has been triggered. That commission will be a governmental body whose main objective would be to pass a balanced budget amendment. It will engage with Congress and legislative bodies in all 50 states to promote the adoption of the Compact nationwide.
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"More and more states are realizing that the national bludgeoning, immoral national debt growth is precisely what threatens prosperity and empowers federal overreach," said state Representative Wes Keller (R., Wasilla) in an email. Keller sponsored the bill in Alaska.
"Alaska joins the State of Georgia to form a solid legal entity that is ready to grow in power and momentum as more states join up," Keller said. He described the governmental body that will now be formed as similar to "a newly formed corporation that has not yet begun to do business, but with the pent up assets, vision, energy, and potential to be profoundly successful. "
Article V of the Constitution provides states with the right to make amendments to the U.S. Constitution by means of a constitutional convention. The Commission would use an agreement among the states called an "interstate compact" to invoke Article V.
Alaska and Georgia will now appoint officers and an administrator to the commission.
Legislators throughout the states are expected to join Alaska and Georgia and introduce the Compact in the next 12 months, according to Goldwater Institute, the developer of the Compact.
According to the Goldwater Institute, the balanced budget amendment would limit federal spending to revenues except under a constitutionally imposed debt limit. The debt limit would not be decided by lawmakers in Washington alone, but could only be increased if a majority of state legislatures approved.
Additionally, any new taxes increases—whether they be income or sales taxes—would need two-thirds approval of both houses of Congress with a few exceptions.
"This is an historic moment for Americans. The Founders foresaw this problem with centralized power and that’s exactly why they created this mechanism," said Nick Dranias, Goldwater Institute’s constitutional policy director, in a prepared statement. "This Compact is the best opportunity for us to realize their vision and to restore state authority in national issues."
Some have been critical of past attempts to pass a balanced budget amendment. The Center on Budget and Policy Priorities has previously pointed out previous balanced budget amendment proposals posed a "potential for serious economic harm."
"The nation faces serious long-term fiscal problems, but a balanced budget amendment to the U.S. Constitution is an ill-advised way to address them," CBPP wrote.