How Congressional Republicans Can Force Biden To Cut $130 Billion in Spending

COMMENTARY Budget and Spending

How Congressional Republicans Can Force Biden To Cut $130 Billion in Spending

Sep 23, 2022 2 min read
COMMENTARY BY
Matthew D. Dickerson

Director, Grover M. Hermann Center for the Federal Budget

Matthew is the director for the Grover M. Hermann Center for the Federal Budget at The Heritage Foundation.
U.S. President Joe Biden speaks on the DISCLOSE Act during an event at the Roosevelt Room of the White House on September 20, 2022 in Washington, D.C. Alex Wong / Getty Images

Key Takeaways

Obama’s Statutory Pay-As-You-Go Act of 2010, better known as Statutory PAYGO, requires new deficit spending to be offset with spending cuts elsewhere in the budget.

Waiving the Statutory PAYGO budget rule requires 60 votes in the Senate. With the Senate split 50-50, Republicans hold all the cards.

Congressional Republicans can, and should, force more than $100 billion in spending cuts this fall.

The federal government’s multitrillion-dollar spending spree has caused devastating inflation. It is hurting families throughout the country, reducing real incomes for the average worker by $3,000 since January 2021.

Calling a halt to excessive spending would be a first step toward getting our economy back on track. Congressional Republicans can do this and actually force President Biden to cut spending by $130 billion. Here’s how.

Mr. Biden’s $1.9 trillion American Rescue Plan Act—the match that lit the inflationary fire—violated the budgetary rules put into place by his Democratic predecessor, President Obama.

Mr. Obama’s Statutory Pay-As-You-Go Act of 2010, better known as Statutory PAYGO, requires new deficit spending to be offset with spending cuts elsewhere in the budget. If Congress fails to pass these offsets by the end of the year, then the president is required to implement automatic spending cuts.

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As a consequence of his overspending, Mr. Biden will be forced to cut $130 billion at year’s end, when Statutory PAYGO gets triggered.

In recent years, Congress has weaseled its way out of these budget rules. Lawmakers have turned off Statutory PAYGO enforcement in order to excuse their irresponsible spending. That irresponsibility has pushed the national debt to more than $30 trillion and set the stage for today’s inflation and the ensuing recession.

In the lame-duck session after the election, Mr. Biden will ask Congress to ignore the rules once again and give his spending a “get out of jail free” card.

But waiving the Statutory PAYGO budget rule requires 60 votes in the Senate. With the Senate split 50-50, Republicans hold all the cards.

Mr. Biden’s preferred hand would increase government spending—and inflationary pressures—by more than $100 billion above what is required by current law. That would be terrible policy, and also terrible politics for Republicans who are attempting to make the case that they would be better stewards of the economy than their Democratic counterparts.

The Statutory PAYGO rules give lawmakers two options for paring spending. Congress could enforce Statutory PAYGO and let the automatic cuts prescribed by the law happen; or Congress could enact different, targeted cuts equaling the required amount on a bipartisan basis.

To be sure, the big spenders won’t like either of these options, preferring to keep spending high. But Mr. Biden is only in this situation because he and his allies in Congress went on an irresponsible spending spree, triggering the PAYGO rules.

Mr. Biden may attempt to scaremonger about the automatic spending cuts, which are specified in Obama’s Statutory PAYGO law. However, most popular programs are protected from these cuts, including Social Security, military spending, veterans’ programs and welfare benefits.

Medicare providers would see a 4% haircut in payments, although the nonpartisan Congressional Research Service says that Medicare “beneficiaries see few direct impacts.” Only about 2% of the $5.9 trillion budget is subject to any cuts to enforce Statutory PAYGO.

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If Mr. Biden dislikes the specific cuts that Mr. Obama’s law says he has to make, he can ask congressional Republicans to help replace them with other spending reductions.

Rolling back the $80 billion IRS slush fund that will be used to harass small businesses and dropping the massive student loan bailout for doctors and lawyers would be good places to start.

Either way, congressional Republicans can, and should, force more than $100 billion in spending cuts this fall.

Mr. Biden’s extravagant spending has pushed the American economy into stagflation. Inflation and the state of the economy have consistently ranked as the number one issues on the minds of Americans.

People are desperate for Washington to change course. Cutting irresponsible spending will be a vital first step toward getting the economy back on track.

This piece originally appeared in The Washington Times