Honest Finances Amendment
A proposed amendment to the US Constitution that promotes transparency and prudence in the management of our national finances.
Stopping Budget End Runs
For decades, we have been promising generous future retirement benefits to public employees and operating the Social Security, Medicare, and Medicaid programs without regard for the solvency of the country. However, our moment of reckoning is fast approaching: the federal government has accumulated off-budget unfunded liabilities estimated at more than $100 trillion, and we have no hope of having the resources to satisfy these obligations as they come due. Federal officials of both major parties have repeatedly refused to acknowledge and resolve this huge financial burden, leaving the problem to our children and future generations.
This has been called the greatest intergenerational wealth transfer in the history of the world, and it is perhaps the greatest failing of our democratic republic.
Congress uses another sleight-of-hand to grant financial favors to groups without funding them in the budget: it grants subsidies as credits and deductions under the tax code. This allows Congress to dispense favors without prioritizing them with the many other issues competing for federal funding.
Profligate spending is the Achilles heel of a democracy, and we must compel a much needed focus on our national financial capabilities and priorities. The process of setting priorities is one of the most difficult tasks of government, but it is a key to effective governance. To do it successfully, all requests for benefits from the government must be submitted to the discipline (and transparency) of the annual budget.
In addition, we must require that the annual budget be balanced, including funding of outstanding commitments on a reasonable basis, and a plan developed and implemented to reduce the federal debt below the level of our annual Gross Domestic Product.
Summary of the Amendment
We propose that all claims on the federal purse must be presented for public view in the annual budget exercise and funded by budget appropriations, without exception:
All planned cash expenditures shall be listed in the budget, which Congress shall present to the president thirty (30) days before the start of the federal fiscal year; it shall cover five years, with the first two years in traditional detail.
All employee retirement plans of the government of the United States, all insurance-type programs of this government, and all commitments of future expenditures shall be operated on an actuarially sound basis and shall be fully funded in the budget in accordance with best accounting practices, similar to those required of private companies.
Targeted individual and corporate income tax credits and deductions shall be reauthorized annually in the federal budget. Targeted credits and deductions are those that benefit only special interests and are not freely available to members of the general public. This will force Congress to review and prioritize these subsidies annually with all federal expenditures, which is the proper forum for evaluating them.
A Balanced Budget
The projected income in the annual budget shall not exceed authorized expenditures, except if Congress and the president jointly declare a national emergency. In that event, an unbalanced budget will be permitted, but it shall be restored (on a cumulative basis) within eight years.
Federal Debt Reduction Plan
Some of our current expenditures are for infrastructure improvements that will benefit future generations, so it is appropriate that future generations shall bear their cost. Therefore, we shall allow federal debt not to exceed the level of our annual Gross Domestic Product. Congress shall implement a plan to achieve this within five years of the ratification of this amendment; it shall be funded in the budget.
If Congress fails to deliver a budget or the Debt Reduction Plan when due, the powers of Congress shall be suspended and it shall conduct no other business until the failure is corrected. If it is not corrected within ninety (90) days, congressional salaries and health care benefits shall be suspended and it shall be adjourned; the president shall then call for a special election of a new Congress.
Author: Frank Keeney
Socialism or Freedom
The last 200 years have given us a ring-side seat at the workings of a number of different government forms. When we evaluate them, we do not need to rely on theory; we can observe the actual positive and negative results.