Fixing The U.S. Federal Budget

I’ve proposed a few constitutional amendments in the past, designed to give us the freedoms described in the Declaration of Independence. But now, I think it is time that we amend the constitution to solve a simpler problem: The budget of the United States and its effect on the economy.

There have been movements in the past for balanced budget amendments and the like, but I haven’t seen something that really covers all of the problems. Here is the right way:

A framework for a progressive income tax based on our current taxation but vastly simplified is codified in the Constitution. Each of the actual tax rates at each income level is calculated as a multiple of a base quantity X.  The minimum x value is set such that no critical government organizations are defended.

The determination of the yearly X value is codified in the constitution to be based upon an evaluation of the past economy and projections of the future economy with the goal of maintaining a GDP growth rate of +2.5%. The X value is set automatically by this calculation on October 1st of the year prior to the year in which it is in effect.

Based upon the X value, and calculated from the same factors and at the same time, a yearly Y value will be calculated. The Y value is the years new spending. The Y value can be no greater than 10% more than the total tax revenue, and no less than 20% less than the total tax revenue.  The present calculation of X and Y as well as twenty years of the predicted X and Y values are published yearly when the results are determined.

Firstly, all money necessary for servicing any outstanding debt in the given year is paid from Y.  The remainder after this deduction is Z.

1% of Z is apportioned to be used by Congress at their discretion. If any of this total goes unused then it will carry over to the next year.

2% of Z is apportioned to go to a disaster relief fund. Any of this total that goes unused is carried over to the next year. These funds are unlocked for use by a congressional declaration of a disaster.

3% of Z is apportioned to go to a war fund. Any of this total that goes unused is carried over to the next year. This war fund can only be tapped by declaration of a war on foreign territory. If the war fund is exhausted while U.S. citizens remain in peril in a foreign territory, then additional funds may be obtained, but only for the purpose of extracting those citizens to safety. In the event of war on U.S territory, any federal money or property may be diverted to the effort, and any loans or debts are permitted to be obtained by Congress.

The remaining 94% of Z is apportioned by priority to defined organizations that are under the management of the executive branch. The defined organizations are defined in one of two ways. First, for critical organizations such as the military or social security, these are defined in the constitution. Second, for non-critical organizations, these are defined by a bill passed by Congress. Each of these defined organizations has a funding that is set upon its definition. These funding set points automatically adjust each year based upon the past years real GDP such that if the real GDP rises by 5%, then these funding setpoints increase by 5%, and if the real GDP falls by 1%, then these funding setpoints fall by 1%.

Each defined organization is assigned a priority number at its creation. The critical organizations that are defined in the constitution are assigned from the highest group of priority numbers. The non-critical organizations are assigned priority numbers from a lower group. Any new non-critical organization that is defined by a new bill is automatically assigned the lowest available priority number. This insures stability of the government.

Congress shall have the ability to modify a defined organization’s  funding setpoint by no more than 1% of its current value in each calendar year.

Congress shall have the ability to swap the priority numbers of two non-critical organizations if the higher priority of the two is no more than five higher than the lower priority item. This is accomplished by passing a bill declaring the intention to change in the first calendar year, and then by passing a bill enacting the change no sooner than 365 days later.

Each defined organization is authorized to purchase, develop, and manage federal property, or transfer federal property to another defined organization in exchange for an agreed upon price.

And that’s it.  If we get this locked into the Constitution, then the U.S. will endure with stability and predictability in perpetuity.  The U.S. has been around long enough to have a robust economy, and now we need to start thinking about funding the government in the same that a University Foundation or The Vatican would insure its funding.

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