Preamble

The Nationalist Party is dedicated to securing the nation’s financial future through disciplined fiscal management and long-term debt reduction. We propose a constitutional amendment known as the 'Debt Brake,' which will enforce balanced budgets with adjustments for economic conditions and establish stringent requirements for deficit spending. This policy aims to ensure fiscal stability, address national debt effectively, and enhance transparency and accountability in government budgeting.

 

Policy Statement

Constitutional Amendment: Debt Brake

• Objective: The 'Debt Brake' constitutional amendment is designed to mandate balanced federal budgets annually while allowing for economic adjustments. Additionally, it establishes a rigorous approval process for any deficit spending to ensure fiscal discipline.

• Amendment Provisions:

  • Balanced Budget Mandate: The Constitution will be amended to require that the federal budget be balanced each fiscal year, with expenditures not exceeding revenues.

  • Cyclical Adjustment Mechanism: Introduce a cyclical adjustment mechanism where permissible expenditures are adjusted based on a cyclical factor. This factor will be determined by the ratio of trend real GDP to expected real GDP, providing flexibility during economic downturns and requiring surpluses during economic booms.

  • Deficit Spending Approval: Any budget that proposes a deficit must be approved by a supermajority in Congress. Specifically, a deficit budget must receive approval from at least two-thirds of both the House of Representatives and the Senate.

 

Balanced Budget Requirement

Annual Budget Balance:

• Definition: The federal budget must be balanced each fiscal year, meaning that total expenditures cannot exceed total revenues. This balance is critical to maintaining fiscal responsibility and avoiding excessive debt accumulation.

• Economic Conditions Adjustment: The cyclical factor will adjust permissible expenditures based on economic conditions:

  • Deficits During Recessions: During economic downturns, the cyclical factor will allow for budget deficits to provide necessary fiscal stimulus.

  • Surpluses During Booms: During periods of economic growth, the factor will require budget surpluses to mitigate inflation and build fiscal reserves.

Implementation and Monitoring:

• Cyclical Factor Calculation: The cyclical factor will be calculated by an independent body, such as the Congressional Budget Office (CBO), based on established economic metrics and forecasting models.

• Oversight and Compliance: The Office of Management and Budget (OMB) will oversee compliance with the balanced budget requirement and cyclical adjustments. Regular reports will be provided to Congress and the public.

 

National Debt Reduction

Debt Reduction Target:

• Objective: Reduce the national debt to 60% of GDP within 20 years to enhance fiscal health and stability.

• Progress Monitoring: Annual reports will track progress toward the debt reduction target, including updates on the debt-to-GDP ratio and the total amount of debt reduction achieved.

Debt Repayment Strategy:

• Allocation of Surpluses: A substantial portion of annual budget surpluses will be allocated to debt repayment, prioritizing the reduction of national debt.

• Debt Reduction Fund: Establish a dedicated Debt Reduction Fund to manage and apply surplus funds specifically for debt reduction. The Fund will be operated with transparency, and its activities will be subject to regular audits.

Debt Management and Oversight:

• Treasury Department Role: The Treasury Department will manage the Debt Reduction Fund and oversee debt repayment strategies. Annual reports will detail fund performance and progress toward debt reduction.

• Audit and Evaluation: The Government Accountability Office (GAO) will conduct regular audits to ensure the effective management of the Debt Reduction Fund and proper use of surplus funds.

 

Deficit Spending Approval

Supermajority Requirement

• Approval Process: Any proposed budget that includes a deficit must receive approval from a supermajority of Congress. Specifically, a two-thirds majority in both the House of Representatives and the Senate is required to authorize deficit spending.

• Exception for Emergencies: In cases of national emergencies or extraordinary circumstances, Congress may approve a deficit budget with a simple majority if justified and documented adequately. However, such approvals will be subject to stringent oversight and reporting requirements.

 

Conclusion

The Nationalist Party’s Budget Amendment Policy is designed to enforce fiscal discipline, adapt to economic conditions, and address national debt comprehensively. By adopting the 'Debt Brake' as a constitutional amendment, we will ensure balanced budgets, introduce a flexible adjustment mechanism for economic fluctuations, and impose strict requirements for deficit spending. This policy aims to secure long-term financial stability, promote transparency and accountability, and guide our nation toward sustained economic health and prosperity.​​

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