The Senate's larding up of $14 billion to the
president's Iraq and Gulf Coast supplemental spending request is
yet more evidence our lawmakers have surrendered any pretense of
spending restraint.
The numbers are clear: The federal government has expanded by
nearly half since 2001; Washington now spends a peacetime record of
$23,760 per household. Skyrocketing Social Security, Medicare and
Medicaid costs, combined with Iraq reconstruction and domestic
spending priorities, push the projected 2015 budget deficit above
$800 billion. At that point, merely balancing the budget would
require a tax increase of nearly $7,000 per household. And that tab
will continue to surge thereafter.
Devastating tax increases aren't the answer. Responsible spending
control is.
It's easy to blame lawmakers for avoiding difficult decisions. But
when so many reformers "go native" after arriving in Washington,
the larger problem becomes clear: The budget process itself makes
it virtually impossible even for well-meaning lawmakers to restrain
spending.
Indeed, the federal budget process, created 30 years ago, works to
maximize spending. Unlike the 50 state legislatures, the federal
government has no enforceable spending limits. This means
lawmakers, who often spend days at a time listening to special
interests plead for money, can simply add up every spending request
and spend that amount without setting priorities and making
necessary trade-offs.
Special interests will never cease pressing for more money.
Lawmakers need a budget process that helps them say no.
Most beneficial would be a government-wide spending cap limiting
the growth of the federal government to the inflation rate plus
population growth. Any expenditure above this cap would require a
two-thirds supermajority vote in both the House and Senate.
The suggested cap would pare annual spending growth to
approximately 3.3 percent - less than half the current 7.7 percent
rate. That seemingly small change would require lawmakers to save
$3.6 trillion over the next decade, more than enough to finance
Social Security accounts, make permanent the 2001 and 2003 tax
relief and still reduce the budget deficit.
Is limiting annual spending growth to approximately 3.3 percent too
much to ask? Not with a bloated federal budget that has expanded 45
percent in five years and funds scores of wasteful and obsolete
programs. All current programs in the $2.7 trillion federal budget
could continue growing at the inflation rate plus the population
growth rate. However, programs that expand faster would need to be
offset by slower growth in other programs. To say offsets cannot be
found is to assume that every federal program is justified,
successful and efficient.
Nor is this spending restraint unprecedented: From 1993 through
2000, spending growth averaged just under 3.3 percent, and the sky
did not fall.
But, some will ask, what about escalating Social Security and
Medicare costs? These programs' projected 6 to 9 percent annual
growth would eventually require tax increases topping 57 percent
(the equivalent of $11,000 per household today). Lawmakers must
deal with these costs eventually. A spending cap would discipline
lawmakers to set priorities and reform entitlement programs sooner
rather than later.
Ironically, bolder budget process reforms may be easier to enact
than weaker incremental reforms. The balanced budget amendment
always received more votes than minor budget reforms because strong
public pressure made it politically difficult to oppose. Similarly,
spending caps enjoy three-to-one support nationally and are easy
for voters to understand and rally around. Even better than the
balanced budget amendment, spending caps reflect an understanding
that that runaway spending rather than the resulting budget deficit
is the real problem.
Of course, no budget process reform is foolproof. Since spending
caps would be a statute rather than a constitutional amendment,
nothing could prevent a simple majority of lawmakers from routinely
passing new laws adjusting the spending limits upward. Political
pressure and candidate pledges may prevent lawmakers from abusing
that loophole.
Spending caps are a commonsense solution to irresponsible spending.
The competition for limited taxpayer dollars would help eliminate
obsolete programs and reform wasteful programs, thus averting huge
tax hikes needed to kept them going. Already successful at the
state level, a federal spending cap is needed to protect the family
budget from the federal budget.
Brian Riedl
is Grover M. Hermann Fellow in Federal Budgetary Affairs in the
Thomas A. Roe Institute for Economic Policy Studies at The Heritage
Foundation.
First appeared in the Washington Times