The
House and Senate Budget Committees have reported budget resolutions
which appear to hold to the spending levels outlined in the 1997
Balanced Budget Agreement (BBA) while "walling off" Social Security
revenues, providing Americans with modest tax cuts, and increasing
spending critical to maintaining and preserving a strong national
defense. Although Congress is on the right track, the challenge it
now faces is whether or not it will maintain this framework as the
debate over the fiscal year (FY) 2000 budget resolution moves to
the floor and ultimately toward implementation.
The
budget framework agreed to by Senate Budget Committee Chairman Pete
Domenici (R-NM) and House Budget Committee Chairman John Kasich
(R-OH) that is embodied in the resolutions reported by their
committees rests on three central pillars:
-
Committing 100 percent
of the "off-budget" surplus to Social Security;
-
Maintaining the
spending caps agreed to in the 1997 Balanced Budget Agreement;
and
-
Using on-budget
surpluses, when they become available, for tax relief.
Although Congress could do more to stem
government waste and return money to the taxpayers this year in the
form of tax cuts, the FY 2000 proposed budget resolution starts the
budget process off on the right track. Both committees deserve
praise for restricting total discretionary budget authority to
$536.3 billion, the limit established in the BBA, while increasing
federal defense spending by $8 billion.
The
strong spending limits laid down by Congress in the Balanced Budget
Act of 1997 produced the current budget surpluses, and equally
strong fiscal discipline will be required to protect them. By
offsetting desperately needed increases in defense spending with
reductions in wasteful, duplicative, obsolete, or unneeded domestic
programs, Congress is poised to demonstrate its determination to
protect future generations from foreign threats and the scourge of
wasteful runaway government programs.
These budget resolutions were produced in
a timely fashion with extensive consultation between House and
Senate budget leaders. Consequently, there are few differences
between the two resolutions, a fact which reduces, if not
eliminates, the need for lengthy negotiations. At this point,
Congress appears positioned to pass a budget resolution before the
April 15 deadline first established by the Gramm-Rudman-Hollings
Act. This would be only the second time Congress has met that
deadline since it was established in 1986.
Two Cheers.
In the spirit of not letting the perfect be the enemy of the good,
the House and Senate Budget Committees have produced FY 2000
proposed budget resolutions that deserve two cheers. Congress
appears committed to resisting the strong temptation to spend away
the budget surplus.
Yet
uncertainties remain. For example, the Internal Revenue Service
will continue to collect more money from taxpayers than is needed
to operate the federal government, because the budget resolution
provides little in the way of tax relief for FY 2000. The
committees are proposing approximately $15 billion in unspecified
tax relief in FY 2000, increasing to $150 billion over five years
and $800 billion over ten years; but they are providing no details
about the nature or timing of future tax reductions. In addition,
the budget resolution proposes to "lock away 100 percent of the off
budget Social Security Surplus" rather than just the two-thirds
promised by President Bill Clinton. How this will be done and what
it means for reform of the Social Security program remains
unclear.
How to Stay on
Track.
If there is any hope for Congress to adhere to the proposed budget
framework and deliver on its promises, it must remain mindful of
the following:
-
Do not bust the budget
caps.
The strong spending limits laid down by Congress in the Balanced
Budget Act of 1997 produced the current budget surpluses, and
equally strong spending limits will be required to protect
them.
-
Discretionary spending caps are
credited by the Congressional Budget Office with eliminating
deficits and producing surpluses;
-
All major decisionmakers, including
President Clinton, have agreed on the need to increase investments
in national security; and
-
Increases in defense spending can and
should be offset by reductions in domestic spending.
-
Stick to the Balanced Budget
Act deadlines.
The Appropriations Committees can help avoid an "end of the budget
year train wreck" by being equally attentive to their own
deadlines.
-
Consult early and
often.
Continual consultation between the House and Senate Budget
Committees led to draft resolutions with few major differences,
which helps minimize conflict.
-
Recognize that convictions
require courage.
The ink was not yet dry on the resolutions before they were
attacked as "harmful to elderly, children and working families."
Almost every attempt at fiscal responsibility in the past 20 years
has evoked accusations of callousness. By its very nature, fiscal
responsibility means that some special interests will get less of
the taxpayers' money than they think they deserve. Standing up to
them is part of the job of any elected official.
CONCLUSION
The
House and Senate Budget Committees have completed a difficult task
reasonably well and in a timely manner. Although the budget
resolutions reported out of the committees are less than perfect,
they move in the right direction. The House and Senate budget
resolutions hold to the spending limits of the BBA, invest in a
strong national defense, stabilize and reform Social Security, and
begin to return on-budget surpluses to American taxpayers. The
challenge for Members of Congress now will be to preserve this
sound framework as the debate moves to the full House and Senate
and to deliver on their promises to the American people.
Peter Sperry is a former Budget Policy Analyst
in The Thomas A. Roe Institute for Economic Policy Studies at The
Heritage Foundation.