Congress Guts Budget Rules and Misses Chance to Cut Spending

COMMENTARY Budget and Spending

Congress Guts Budget Rules and Misses Chance to Cut Spending

Jan 5, 2023 4 min read
COMMENTARY BY
Matthew D. Dickerson

Senior Policy Advisor, Hermann Center for the Federal Budget

Matthew is a senior policy advisor for the Grover M. Hermann Center for the Federal Budget at The Heritage Foundation.
Republican lawmakers were handed a golden opportunity this week to single-handedly cut spending. Erik Pronske Photography / Getty Images

Key Takeaways

Republicans in Congress missed a huge opportunity to begin putting our country’s fiscal house in order.

The massive omnibus spending bill included a provision that simply turned off enforcement of the Statutory PAYGO rules not just this year, but next year as well.

Congressional leaders must be prepared to seize these and every chance to slow the growth of government spending and save our country.

Republicans in Congress missed a huge opportunity to begin putting our country’s fiscal house in order.

Inflation caused by runaway government spending and money printing was the top issue on the minds of voters in the November midterm elections.

The Left’s reckless pursuit of these disastrous policies has been a boon for fiscally conservative politicians bold enough to honor their promise to the American people.

“Across the country, conservative candidates who offered courageous leadership and a clear policy agenda were rewarded,” Heritage Foundation President Kevin Roberts explained. “Candidates who focused solely on blaming President Joe Biden for the country’s problems, without offering any solutions, were disappointed.”

The lesson for politicians should be that they need to understand the issues that matter to American families, identify solutions to those challenges, and then boldly go on offense to achieve results by taking advantage of legislative opportunities.

The most important solution lawmakers could advance to address the country’s largest problem, inflation, is reducing government spending.

Republican lawmakers were handed a golden opportunity this week to single-handedly cut spending.

That’s because President Joe Biden’s $1.9 trillion American Rescue Plan Act–the spending bill that lit the inflationary fire–violated the Statutory Pay-As-You-Go rules put into place by President Barack Obama.

The Statutory PAYGO law requires deficit-increasing laws like the American Rescue Plan to be paid for with cuts elsewhere in the budget. If Congress doesn’t do its job, then the president is required to automatically carry out specified spending cuts.

Biden’s bill for his spending was set to come due in January, when the President would have been required to cut $132 billion out of the $6 trillion budget.

To reduce inflationary government spending, all Republican senators had to do was absolutely nothing. It would have been a perfect opportunity to help American families.

Of course, Biden wants to keep government spending as high as possible, inflation be damned. And some Republicans wanted to avoid the specific cuts required by Obama’s Statutory PAYGO law, which would include a 4% haircut to Medicare payments to providers.

They could have negotiated other spending cuts to replace the automatic reductions. The $80 billion IRS slush fund to add 87,000 agents would have been a popular place to start.

Because Republicans didn’t vote for the American Rescue Plan Act that triggered Statutory PAYGO rules (they didn’t vote for the Statutory PAYGO law either), they would have been totally blameless if Biden ultimately rejected common sense solutions and instead decided to enact the automatic spending cuts.

Republicans held all the leverage.

What ended up happening?

The massive omnibus spending bill introduced by the leadership of both parties in the Senate included a provision that simply turned off enforcement of the Statutory PAYGO rules not just this year, but next year as well. This would result in a $260 billion deficit-fueled spending hike.

Comically, the provision turning off budget enforcement rules were written in such a way that they violated another Senate budgetary rule.

Senator Rand Paul, R-Ky., raised a point of order, stating:

Today’s legislation breaks the Congressional Budget Act rules, so Congressional leaders have included in this monstrous spending bill language to simply waive the PAYGO rules. Congress has time and time again waived its own rules and the result has been over $31 trillion in debt, inflation, and a weakened economy. Let’s respect the American people by being responsible stewards of their tax dollars and adhering to our own budget rules.”

Unfortunately, 16 Senate Republicans and all Democrats voted to “waive all applicable budgetary discipline.”

Paul tweeted “That Point of Order was waived with the help of 16 REPUBLICANS. If it had been upheld, this monstrous spending bill would have been stopped until there were SERIOUS cuts.”

Eighteen Senate Republicans ultimately voted for final passage of the omnibus, pushing American taxpayers further into debt and increasing inflationary pressures.

Not taking advantage of the leverage to achieve results for the American people presented by Statutory PAYGO is a big, missed opportunity. One that will cost taxpayers hundreds of billions of dollars.

Next year will feature several important policymaking inflection points that should be opportunities for conservative lawmakers to reduce inflationary government spending by trillions of dollars, including the debt limit, government funding, and the farm bill.

The American people expect–and deserve–bold leadership. Congressional leaders must be prepared to seize these and every chance to slow the growth of government spending and save our country.

This piece originally appeared in The Daily Signal on December 23, 2022