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Oklahoma leaders can help solve the federal debt crisis

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Oklahoma leaders can help solve the federal debt crisis

May 22, 2024 | 6:28 am ET
By Barry W. Poulson David M. Walker
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Oklahoma leaders can help solve the federal debt crisis
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(Photo illustration by iStock/Getty Images Plus)

Our nation is experiencing debt fatigue, allowing debt to increase more rapidly than the economy for far too long.

Total federal debt is now over 120% of the total size of the entire national economy, and the Congressional Budget Office projects that it will increase to at least 166% of the national economy by midcentury, and possibly much higher.

The federal debt is just the tip of the iceberg, current unfunded social insurance obligations are over double the size of federal debt. The accumulation of debt, liabilities, and unfunded obligations associated with federal social insurance programs exposes the country to an increasing risk of a major fiscal crisis. It also threatens the long-term viability of Social Security and Medicare.

As the “trust funds” associated with Social Security and Medicare become exhausted, future generations face the possibility of paying higher taxes and receiving less benefits.

In contrast, state and local governments have been more successful in maintaining sustainable debt levels. A good example is Oklahoma, which is one of the most fiscally responsible states in the nation. Oklahoma has stabilized debt at 8.9 percent of state income, well below the average for all states.

The explanation for the success of Oklahoma, as well as other states, is that citizens have imposed stringent fiscal rules on their state and local governments. Oklahoma now has some of the most effective fiscal rules in the nation, including balanced budget requirement, debt limit, tax and expenditure limit, rainy day fund, and gubernatorial veto authority.

Oklahoma is a conservative state, so it is not surprising that state and local governments pursue prudent fiscal policies. But over the years Oklahoma citizens have enacted stringent constitutional and statutory rules imposing more effective constraints on fiscal decisions. With this combination of fiscal rules Oklahoma state and most local governments have balanced their budgets and stabilized debt.

There are several lessons that the federal government can learn from the experience with fiscal rules in the states. Incorporating fiscal rules in the Constitution makes it more difficult for legislators to act in a fiscally irresponsible manner. If legislators fail to balance the budget and stabilize debt, they face the wrath of citizens who voted to incorporate the fiscal rules in their Constitution. Citizens also have recourse through the legal system to enforce the Constitutional fiscal rules.

Legislative leaders in Oklahoma have the power under Article V of the U.S. Constitution to address federal fiscal irresponsibility as well. Two thirds of the states, currently 34, can call a convention of states to propose fiscal restraints on the federal government. Any resulting fiscal responsibility amendment proposed by a convention must be submitted for ratification by three-quarters of the states, currently 38, preferably by a vote of the people as was the case with the 21st Amendment.

Oklahoma submitted a plenary application for an Article V amendment convention in 1908. In 1976 Oklahoma submitted the first in a series of applications for a fiscal responsibility amendment to the Constitution.  Recent research discovered that more than the required number of states called for such a convention of states in 1979 and yet Congress failed to act.

Legislation introduced in Congress this year (H.C.R. 24) would require Congress to fulfill its obligation under Article V of the Constitution to certify and count state resolutions and call the convention. Organizations like the Federal Fiscal Sustainability Foundation are working with state legislators in an appeal to the Supreme Court for a declaratory judgement that would require Congress to record and count the applications and call the convention if the requisite number of applications has ever been met.

For too long Oklahoma and other states have allowed Congress to preempt their power to propose amendments to the Constitution. The states have met the two thirds requirement, and it is now up to Congress to set the time and place for such a convention. To do otherwise would reward bad Congressional behavior and moot the state’s equal rights to propose amendments to the Constitution as provided by Article V.