Public Savings, Stabilization & Emergency Funds
PROPOSED / DRAFT: PUBLIC SAVINGS, STABILIZATION & EMERGENCY FUNDS
POSITION
Government should save during ordinary years, maintain a separate fund for genuine emergencies, and stop treating new debt as the first answer to every problem. The former general reserve is replaced by two transparent funds with defined deposits, purposes, limits, approval rules, audits, and replenishment duties.
TWO FUNDS, TWO PURPOSES
Savings and Stabilization Fund: Available for a severe recession, a major collapse in recurring revenue, or temporary continuity of essential public services. It may not finance permanent recurring programs, routine operating growth, political projects, or predictable repairs.
Strict Emergency Fund: Available for a declared disaster, attack, invasion, war, pandemic, catastrophic cyberattack, critical-system failure, or another sudden event that materially threatens life, safety, national security, or essential infrastructure. It may not cover an ordinary deficit or a foreseeable expense that should have been budgeted.
REQUIRED ANNUAL DEPOSITS
While the applicable government remains in debt:
3.5% of annual audited net recurring revenue is deposited into the Savings and Stabilization Fund.
1.5% is deposited into the Strict Emergency Fund.
The combined annual deposit is 5%.
After the applicable government becomes debt-free:
7% of annual audited net recurring revenue is deposited into the Savings and Stabilization Fund.
3% is deposited into the Strict Emergency Fund.
The combined annual deposit is 10%.
For the federal government, the higher rates begin only after certified gross federal debt reaches zero. For a state system, they begin only after the covered consolidated state and local public debt reaches zero.
Net recurring revenue means recurring revenue actually collected after refunds and before spending, transfers, fund deposits, or debt-principal payments. Transfers among covered public bodies are eliminated from the calculation so the same money is not counted twice.
FEDERAL & STATE COVERAGE
The federal requirements apply to the federal government and every covered federal entity. Each state must establish the same framework for the state and every county, city, town, village, school district, authority, special district, and other public body within that state. Each system must publish the entities, revenue, debt, deposits, withdrawals, earnings, and balances included in its calculation.
MAXIMUM BALANCES
The federal Savings and Stabilization Fund may not exceed 67% of the trailing three-year average of nominal United States gross domestic product. The federal Strict Emergency Fund may not exceed 33% of that measure.
Each state applies the same 67% and 33% limits using the trailing three-year average of nominal gross state product.
The limits are tested annually. A scheduled deposit pauses when its fund reaches the maximum. If one fund is full and the other is not, the scheduled deposit may be used to fill the other fund. When both funds are full, excess revenue is paid to debt principal while debt remains and is returned proportionately to taxpayers after debt payoff under the MPA taxpayer-refund policy.
CARRYFORWARD & ACTUAL EARNINGS
Unused principal remains in the applicable fund and carries forward permanently. It is not forfeited at year-end, and government is not required to spend it merely because it is available.
The funds may retain actual net interest, dividends, and realized gains. No guaranteed or artificial return may be reported. Every fee, expense, loss, holding, manager, and conflict must be disclosed. Interest one federal account pays to another does not create new public wealth and may not be counted as an external gain.
The Strict Emergency Fund must remain in cash and highly liquid, low-risk assets. The Savings and Stabilization Fund may use a separately approved, diversified, low-cost investment policy administered by independent fiduciaries. Political investing, favoritism, government control of private companies, insider dealing, hidden fees, and undisclosed conflicts are prohibited.
SAVINGS-FUND WITHDRAWALS, 30/30/30
A proposed federal Savings and Stabilization Fund withdrawal must identify the qualifying condition, amount, purpose, recipients, duration, controls, repayment or restoration plan, and measurable end condition.
Congress must approve, modify, or reject the proposal within 30 calendar days.
The President must act within the next 30 calendar days, subject to the Constitution's presentment requirements.
If the action is contested, an expedited court process must permit review and temporary relief within the following 30 calendar days. Where authorized, a three-judge federal court and direct Supreme Court review may be used. This rule guarantees timely access and temporary protection, not a predetermined judicial result.
Each state must use the same 30/30/30 structure through its legislature, governor, and courts under its constitution.
STRICT EMERGENCY WITHDRAWALS, 10/10/10
The President or a governor may release immediate emergency funds when delay would materially threaten life, safety, security, critical infrastructure, or disaster response. The immediate release is limited to the first 10 calendar days and may not exceed 1% of the applicable government's trailing three-year average net recurring revenue.
First 10 calendar days: Congress or the state legislature must approve, modify, or reject the emergency withdrawal.
Second 10 calendar days: The President or governor must accept, sign, or veto the legislative action under the applicable constitution. Federal presentment remains governed by Article I, including its rule concerning Sundays.
Final 10 calendar days: If contested, expedited judicial review must be available for jurisdiction, legality, temporary orders, preservation of funds, and recovery. Federal law may authorize a three-judge court and direct Supreme Court appeal, but no law can guarantee that a court will finally decide every dispute within 10 days.
REPLENISHMENT, RECOVERY & CLAWBACK
An approved withdrawal is replenished through ordinary future deposits under the applicable schedule.
If a withdrawal is rejected or found unlawful, undisbursed money is frozen, lawfully cancellable obligations are cancelled, and money still held by agencies, governments, contractors, companies, or organizations must be returned. Fraud, ineligibility, overpayment, breach, or misuse triggers repayment and lawful clawback.
Money is not clawed back from an innocent disaster victim or a supplier that lawfully performed in good faith. Any remaining shortfall must be restored from unrestricted revenue within 90 calendar days or by the end of the fiscal year, whichever occurs first.
A good-faith emergency judgment that is later rejected does not create personal liability by itself. A fabricated declaration, personal diversion, intentional fraud, knowing misuse, falsification, concealment, or obstruction may produce personal civil and criminal accountability after due process.
NO BORROWING AGAINST THE FUNDS
No public body may borrow against, pledge, collateralize, divert, sell, or transfer a fund balance to evade the withdrawal rules. The funds may not be treated as available cash for ordinary budget balancing.
PUBLIC AUDIT
Every fund must publish annual deposits, earnings, fees, losses, withdrawals, commitments, recipients, recoveries, replenishment, current balance, applicable cap, and whether the government qualifies for the debt-period or debt-free deposit rates. Security-sensitive details may be protected, but cleared independent auditors must receive the complete record.
Core MPA standard: Save in ordinary times. Keep emergency money for real emergencies. Let unused money grow. Do not borrow against it, hide it, or spend it merely because it is there.
Related policies: Federal Spending & National Debt; Taxes; Public Money, Audits & Proof of Spending; Infrastructure Modernization & Disaster Response.
Status: Proposed / Draft, not yet formally adopted.
Originally published: October 3, 2026.
Last updated: October 3, 2026.
Version: Draft 0.1.