Donald Trump shocked Congress last week by calling for the debt ceiling to be lifted, or at least suspended for the remainder of his presidency. This is a position that Democrats typically support. Thankfully, this plan has been shelved for now, but there may be a way for conservatives to turn this political lemon into lemonade. What if Congress did away with the debt ceiling in its long-awaited budget reconciliation bill, but did so in a way that addressed the debt itself rather than the ceiling?
Do you want to restore relevance to state legislatures and autonomy while dealing with the debt crisis? Consider making states responsible for debt management. This idea may not be as far-fetched as you think.
As part of an upcoming reconciliation bill, Congress could introduce a rule that would prevent the state from raising the debt ceiling without approval from two-thirds of the state Legislature.
We are no longer self-governing citizens. Today's politics reveals an alarming reality for both the right and the left. In other words, our government is no longer run by the people, by the people, for the people, and according to the people. Its cause is the dismantling of the federal system created by the Constitution. Instead of the states representing the people in the federal government, the entire system was turned upside down.
The states became a joke, a bunch of schleppers following the orders of the federal government and gobbling up its attention and money. Our founders envisioned the need for localism when America was a relatively homogeneous group of just 3 million people. This is even more true today, with 340 million highly diverse individuals and communities.
From a liberal and conservative perspective, the tables must be turned to restore the balance of power intended by the Founders. There are few better solutions to achieve this than devolving debt powers to the states. The idea was first proposed by the Goldwater Institute and recently promoted by Rep. Eric Burleson (R-Missouri). on my podcast.
put the state in the driver's seat
Empowering states through this transformative reform will strengthen their autonomy. This would make state and local elections more relevant, align state and public priorities, and make the federal government more accountable.
While the federal government collects $5 trillion in one central pot, state and local governments collect only $3.5 trillion in combined revenue, making them less influential. The federal government then returned about $1.1 trillion to states, imposing conditions and distortions that left state officials unable to control their own destinies.
The federal government collects most of its revenue from the wealthy, leaving half the country uninterested in curbing federal government excesses. The truly wealthy, on the other hand, accept their burden and are content to pay amounts that amount to bribes to maintain their positions. At this point we might as well give the money to the King of England. These funds have nothing to do with self-government or the character of our communities and are typical of the “taxation without representation” that led to the War of Independence.
In recent years, much of this revenue has come not from taxes but from printing money to pay interest on debt through auctions of government bonds. This practice left Americans with an even worse tax burden: a long period of unmanageable inflation. What if we moved control of the printing presses to the states and put them firmly in the driver's seat?
Empower grassroots conservatives
As part of an upcoming reconciliation bill, Congress could introduce a self-imposed regulation that would prevent states from raising the debt ceiling without approval from two-thirds of the state Legislature. Even with the 26-state standard, raising that cap would require the consent of several Republican-controlled chambers for every Democratic-controlled chamber. Rather than devolving Congress' spending authority to the states, this approach would impose restraints that would limit federal spending absent state approval for higher caps.
Currently, Democrats have full control of both chambers of Congress in only 18 states. Even with a simple majority vote requirement, raising the debt ceiling would require approval from eight Republican-controlled states or legislatures. Shifting this power to state legislatures would elevate the debate over the scope of the federal government to the local level, allowing conservative grassroots movements to veto excessive spending. It would also give state legislators a key role in Congress' most important decisions, effectively acting as a backdoor repeal of the 17th Amendment.
Over time, this plan would force states to take control of their own futures and permanently reduce the size of the federal government. If states take the lead in debt management, the conservative vision of full state oversight of health care, transportation, education, and agriculture could become a reality.
Civil society created the states, and the states created the federal government. Many of today's public policy problems arise from upending this governance. Giving states the power to limit their debt would not only address the federal spending crisis but also potentially solve widespread dysfunction in the federal government with a single, systemic action. Now we need elected officials with the courage to support bold ideas like this and others to promote localism. It's not too late to include this reform in next year's most important legislation.
