Federal Budget

The budget process has allowed federal spending to leap $455 billion in the past three years.  In 2003, the federal government ran a deficit of $374 billion.  Based on Congressional Budget Office (CBO) estimates, including the unexpected costs of increasing national security and stabilizing our economy, the federal government is on track to reach government surpluses by 2012.  However, even this less-than-optimal time frame hinges on Congress’s ability to control spending.  Unfortunately, the lack of fiscal discipline leads to unchecked spending and legislative deadlock. 

2005 Budget.

To address the spending problem in the short term we need to rein in wasteful spending. With my support, the budget, which provides spending guidelines for Congress, passed the House on May 19, 2004.  The budget resolution freezes the level of domestic spending (except for homeland security).  It provides military spending at the President’s requested level of $402 billion.  The budget also provides for up to $50 billion for additional needed costs associated with operations in Afghanistan and Iraq.  For veterans, the budget provides for a $1.2 billion increase over the President’s request and rejects fee increases.   

This budget agreement also guards against tax increases by leaving room to extend tax relief that would otherwise begin to expire next year.  Specifically, it accommodates the current child tax credit of $1,000 per child, the current level of marriage penalty relief, and the current 10-percent tax bracket – tax relief that would begin to shrink in 2005 if a new law extending these benefits does not pass. 

This budget sets a firm line on excess spending, and it is critical that Congress sticks to these spending guidelines.   Unfortunately, Congress often sidesteps the budget to overspend.  The reason for this is that currently the budget does not have the force of law.  I am spearheading an effort in Congress to change this by reforming the broken budget process and making the budget an enforceable law to control government spending more effectively.

Fix the budget process. 

The biggest obstacle facing government officials when prioritizing spending decisions is the budget process.  Changing the tax-and-spend nature of Congress is one of my highest priorities.  Right now, there is little motivation to reduce spending.  In the House of Representatives, 16 committees authorize spending and one appropriates, which means that every Member of Congress has a hand in the spending process at some point.  The Committee on Appropriations has 13 subcommittees overseeing each of the 13 appropriations bills.  Each subcommittee has the incentive to spend as much as it can because any money not spent by one subcommittee must be spent by another.  According to current budget rules, spending during the appropriations process cannot be saved and returned to the taxpayer or used to pay down government debt; it can only be spent.  I believe Members of Congress should be able to cut money from appropriations bills through the amendment process and return it to taxpayers.

The budget process also allows for supplemental emergency spending, which is money spent above annual budget caps.  Under the current budget process, the definition of “emergency” is subjective.  Emergency spending is not necessarily sudden, urgent, unforeseen and temporary, as it should be defined. Nor does the process allow for a point of order if an emergency spending item violates common sense.  Instead, it allows supplemental bills to be loaded up with non-emergency spending, such as increased support payments to mohair wool and peanut farmers.   Even if these initiatives were valid spending items, they should be decided during the normal appropriations process and not passed under the guise of emergency spending.   

However, with the current one-year budget process cycle, it is hard to determine what is necessary spending and what is not.  Many states like Wisconsin work under a biennial (two-year) budget, which gives legislatures time to focus on government performance reviews and increased oversight of agency efficiency.  Currently, Congress does not have the time to review how taxpayer money is spent.  A biennial budget for the federal government would allow Congress to appropriate in one year and conduct oversight hearings the next. A longer budget process would ensure that taxpayer money is being spent effectively, without agency duplication or waste.  

A better budget process would also allow enhanced rescission for the President.  In other words, the President could carve out pork and send it back to Congress to be voted on again – separate from the appropriations bill in which it was contained.  While this would be a painful process for legislators accustomed to bringing home the bacon, Members of Congress who request funds for legitimate district projects, on the other hand, would have an easy time defending their appropriation requests. 

Additionally, the federal government is as guilty as some large companies have been when it comes to fudging the books and accounting mistakes.  When determining the federal budget overall, the government uses accounting tricks to make it more difficult to determine true spending levels.  For example, Social Security and Medicare surpluses are used to balance the budget.  The inclusion of these funds in our balance sheet gives Congress cover to keep spending after discretionary funds are gone.  Further, Congress can break its own spending rules by declaring appropriations an “emergency,” even when they are not. 

Taxpayer money spent on new or expanded discretionary programs should instead be spent on shoring up Social Security and Medicare, which face bankruptcy when the baby boomers start to retire.  Additionally, money could be used for tax relief to boost economic growth.

I have introduced legislation, The Family Budget Protection Act (H.R. 3800), to rein in excess spending and improve the government’s accounting practices.  This bill has gained the support of a bipartisan cross-section of over 100 House members.  Right now, the budget process is broken.  This new bill will put teeth in the budget process to help Congress act responsibly and stop runaway spending.  Taxpayers deserve greater accountability for money sent to the federal government.

The Deficit.

I am a strong supporter of paying down our national debt, but I also believe that the federal government needs to balance this priority with winning the War on Terrorism and encouraging growth in our economy.  Based on Congressional Budget Office (CBO) estimates, including the unexpected costs of increasing national security and stabilizing our economy, the federal government is on track to reach government surpluses by 2012.  I favor paying down as much debt as possible over the next ten years to prepare for the inevitable demographic change as the baby boom generation begins to retire.

 Some observers argue that the tax relief packages of the last three years are the primary reason that budget deficits have replaced surpluses.  This is incorrect.  In fact, the large deficits reflect the near “perfect storm” that has rocked the federal government’s budget: 1) revenues plummeted due to a weak economy and a sharp drop in the stock market, 2) spending increased due to two wars and new homeland security requirements, and 3) fiscal discipline weakened following the emergence of budget surpluses.

Government revenue is directly tied to the health of the U.S. economy.  The weak economy reduced the size of the tax base, increased spending on programs like Medicaid, and revealed technical adjustments that needed to be made to the budget estimates.  In all, those factors account for 53% of the changes in OMB’s projections, none of which are due to legislation. 

Ensuring that the economy comes out of this period of slow growth is one of my top priorities.  As long as the economy grows, Americans work.  A growing economy is the only way to increase revenue collection -- except for increasing taxes, which I oppose.  In addition, the more money that comes into the federal government, the more quickly we can pay down the national debt and shore up the Social Security Trust Fund.   

Congress can ensure economic growth by protecting the pro-growth tax reductions signed into law and by reducing unnecessary government spending.  The new tax laws focus on making it easier for small businesses to grow and invest, and workers to save more for their retirement and keep more of what they earn.  This policy will help ensure our economy grows. 

Additional Information. 

For more information on the federal budget, please refer to the following websites: 

Office of Management and Budget: www.omb.gov

Congressional Budget Office: www.cbo.gov