November 17, 2015

November 17, 2015 | Commentary on Budget Process, Federal Spending

Note to Congress: Spending limits represent a maximum, not a goal

On November 2, President Barack Obama signed the Bipartisan Budget Act (BBA), which passed Congress with 233 Democrats and 97 Republicans voting in its favor.

Enactment of the BBA was historic event. For the first time in modern history, Congress granted a president unlimited borrowing authority for nearly an entire term in office.

The last statutory limit that constrained how much new debt the Treasury Department could issue expired just 15 days into Obama’s second term. During his presidency, the federal debt has soared, to the point that it now exceeds the size of our economy. Now, with the BBA in the books, the federal debt can continue to grow unchecked for the rest of Obama’s tenure.
Many Republicans who voted for the BBA claimed that raising the debt limit was necessary. In a statement, Chairman of the Finance Committee, Sen. Orrin Hatch (R-Utah) said “supporting this budget agreement is the only realistic way to avert another government shutdown and avoid risking default on our debt obligations.”

Knowing that Republican leadership would be in a tight spot if pushed to breech the debt limit, the president and Congressional Democrats extracted a sweetheart deal. As Sen. Harry Reid’s (D-Nev.) top spokesperson observed, Senate Republican leadership “decided to wait until weeks before the [debt ceiling] deadline to start negotiating, by which time the [Democrat’s] leverage had increased dramatically.”

In return for their help in passing the BBA, Republicans gave Democrats the higher spending limits they desired. Over the next two years, the BBA allows an additional $80 billion in discretionary spending beyond the caps set in the 2011 Budget Control Act. It also paves the way to give the president everything that he asked for on domestic programs while continuing to shortchange the defense department.

However, the BBA did not give money to the president to spend. The authority to spend the money will come later as part of an appropriations bill that Congress will likely take up before the current appropriations expire on December 11.

With the debt limit no longer an issue, Congress has the opportunity to rein in spending before the holiday parties get underway. Since putting limits on discretionary spending four years ago, lawmakers have broken the caps twice. In the process, they will have increased non-emergency discretionary spending by a total of $143 billion by 2021 (the period covered by the Budget Control Act). Amazingly, they have promised to pay for it with $98 billion in savings that aren’t even scheduled to appear until after 2021. Continually delaying reforms in exchange for more spending today is a recipe for going broke.

Simply spending more money without a hard look at our finances sends a message to the American people that savings cannot be found. That’s patently false. The Government Accountability Office (GAO) recently found that the federal government made $124.7 billion in improper payments in fiscal year 2014. Every year the GAO releases its “duplication report” including dozens of recommendations to Congress on how the federal government can run more efficiently and save money in the process.

Congress has the opportunity to make a stand on spending. The BBA’s spending limits are maximums, not minimums. Just like when a family must cut back and prioritize its spending when it cannot afford its budget, Congress must cut back and prioritize as well. The country simply cannot afford the Bipartisan Budget Act.

 

-Paul Winfree is director of The Heritage Foundation’s Roe Institute for Economic Policy Studies.

About the Author

Paul Winfree Director, Thomas A Roe Institute for Economic Policy Studies and Richard F. Aster Fellow
Thomas A. Roe Institute for Economic Policy Studies

Related Issues: Budget Process, Federal Spending

This piece originally appeared in The Hill