It can’t be overstated: Our current fiscal track is unsustainable and our ways of repairing it are inadequate. Or in the words of new House Speaker Paul Ryan, R-Wis., “the process stinks.”
The Senate Budget Committee held a hearing this week on reforming the budget process and exploring ways to avoid the looming financial crisis.
Budget Chairman Mike Enzi, R-Wyo., led off the hearing by emphasizing the need for budget reform because the process is broken and outdated. The Institute to Reduce Spending held a meeting focused on similar issues earlier this month.
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One can only assume that House and Senate leadership has grown comfortable with the status quo. In May, Congress passed the first balanced budget since 2001.
But don’t be fooled. Congress didn’t put the nation back on a path to a balanced budget. Nothing is guaranteed.
When lawmakers pass a budget without additional legislation to implement it, they can go on spending as before. The budget plan alone does not have the power to stop overspending, and it lacks enforcement to ensure it is followed.
A recent Congressional Budget Office report shows government spending in 2015 went up by $181 billion, to a whopping $3.68 trillion. Spending remains out of control, and we need to make sure that elected officials spend taxpayer funds wisely.
Automatic spending, largely on welfare and entitlement programs, has ballooned to consume 12.9 percent of everything the U.S. economy produces in goods and services in a given year, as measured by gross domestic product.
Meanwhile, discretionary spending on defense and domestic programs shrank to about half of that (6.5 percent.) Spending that Congress considers each year makes up a mere one-third of the federal budget and is declining annually.
One of the main concerns voiced during the Senate Budget Committee hearing is the lack of discipline Congress exhibits in sticking to its own budget.
Congress should enforce budget policy with fiscal rules similar to Sweden’s and Switzerland’s expenditure limits, which were enacted to effectively balance their budgets.
If we don’t address our budget problem now, it will escalate to even more daunting levels. The consequences will be much more severe for future generations.
Some of those testifying this week complained that congressional budgets don’t project out far enough into the future.
Broadening the budget window would force Congress to acknowledge that given our current trajectory, interest and entitlement programs will consume all tax revenues by 2033.
Congress also should make actual use of its “reconciliation” process to bring automatic spending under control. The Budget Control Act and its mandatory limits were successful in controlling discretionary spending on defense and domestic programs.
Expanding the spending caps and so-called sequestration authority to encompass more entitlement programs would better target the largest sources of increased spending.
It isn’t certain that leadership will follow suit and continue the discussion of how changes to the budget process could help to control the national debt and the reckless spending that drives it.
Enzi announced plans to hold two more hearings on the subject to help formulate solutions. He is all ears. Let’s see if others are ready to go all action.
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