Calls for Congress to get serious and rein in
its spendthrift ways once and for all are nothing new.
Surprisingly, though, lawmakers may be on the verge of doing just
that. And if they do it properly, they can do more than just avoid
budget "train wrecks." They can inoculate future Congresses against
a relapse into their old ways.
That second point is crucial. Pundits are right to pillory
lawmakers for their wasteful, pork-laden ways, but those same
pundits don't seem to appreciate the fact that the budget process
is skewed toward higher spending. Changing the process is
key.
Back in January, congressional leaders were anxious to turn over a
new leaf on their spending habits. It's no wonder: Several
extravagant spending years saw the cost of the federal budget
skyrocket to more than $20,000 per household last year, and it's
only projected to get worse. So Congress hammered out a budget
agreement that takes a good (though quite modest) first step in
that direction.
The House passed this agreement and has moved on to the important,
though arcane, matter of the budget process - the foundation that
governs the way Congress spends taxpayer money. House leaders have
a real opportunity to make bold changes to this foundation, changes
that could bring the taxpayer, instead of the lobbyist, into the
halls of Congress.
How did the budget process break down in the first place?
To begin with, the incentives are perverse. Members of Congress
aren't rewarded for protecting the taxpayers' pocketbooks. Instead,
they're under tremendous pressure from special interest groups and
powerful lobbyists to pass new spending, special programs and
lucrative subsidies. They're rewarded for bringing special projects
to folks who hail this windfall of "free" federal money.
But it's not free money - it's the taxpayers' money. As President
Reagan wrote to Bob Dole in 1985 requesting the line-item veto,
"The House [has made] no meaningful effort to shrink this
gargantuan federal spending machine that gobbles up your taxes and
divvies them out to a multitude of special interests." Not much has
changed.
Spending is also out of control because the budget process is 30
years old and has been riddled with creative escape hatches that
enable this bad spending habit to fester. Growth in spending is
guaranteed, and budgets that don't grow enough to keep up with
prescribed formulas are said to be "cut."
Hey, it makes sense in Washington. But one thing is clear to all:
It's a budget process run amok.
What are needed are bold reforms that will fundamentally change
lawmakers' incentives. This means much more than putting a new
twist on old budget rules. Congress should focus on four core
principles:
- Total spending - not just a small part - should be capped. The
real fiscal threat comes from entitlement programs such as Social
Security and Medicare, whose growth must be contained if we're to
avoid saddling future generations with large tax hikes or enormous
debt.
- The budget should include a full measure of the government's
financial obligations. Congress ignores commitments made to Social
Security and Medicare in the budget; meanwhile, the bills continue
to mount.
- The president should be involved throughout the budget process
- not only at the end, when he has no choice but to sign or veto
entire bills sent to him. Taxpayers deserve a binding budget
resolution with the force of law behind it.
- Budget decisions should include strong enforcement. Congress shouldn't be allowed to use procedural loopholes to wiggle out of the rules and limits they impose on themselves.
Easy changes mean yielding to the interests of various turf-holders. The real test of any reform is not how smoothly it sails through Congress, but whether it upsets the applecart along the way. In the case of the budget, it boils down to a struggle to maintain power over the federal checkbook.
As Congress reflects on the Reagan legacy, let's hope they stick to higher principles. House leaders should allow a full and open debate on tough, meaningful reforms that will change the incentives for spending - and then create a system that puts the taxpayer, not the lobbyist, in the room when they write the nation's spending plans. These steps will help regain the trust of the American people.
Alison Acosta Fraser is director of the Roe Institute for Economic Policy Studies at The Heritage Foundation (heritage.org).
Originally appeared in Washington Times