What do you do when one-third of your budget is limited by a spending cap? Shift funding to the part of the budget that is not capped, of course!
That is, if you are a Member of Congress.
The House Energy and Commerce Committee recently passed the 21st Century Cures Act (H.R. 6) with unanimous consent. Regardless of the merits of the various science-related provisions in the bill (which spans 333 pages), Congress should not defy budget discipline by circumventing spending caps in law.
The National Institutes of Health (NIH) is funded in the part of the budget called “nondefense discretionary spending.” All discretionary spending is governed by statutory budget caps, implemented as part of the Budget Control Act of 2011 (BCA). The BCA capped discretionary spending to reduce the deficit and curb the growing debt, and to motivate lawmakers, who prefer spending more on discretionary programs, to reform growing entitlement spending.
The Cures Act defies the purpose of Congress’s spending cap, enabling lawmakers to free up spending under the cap by shifting funds to the part of the budget that is not limited by a cap.
Imagine a parent who caps his college student’s fun allowance, while granting unlimited necessary expenses; the student then decides to re-label his beer money a necessary expense. By shifting $50 to the necessary expense side, the defiant college student gets to spend $50 more fun money in addition to spending $50 on beer from the necessary expense account. This student now gets to spend that beer money twice.
Of the roughly $492 billion in nondefense discretionary spending in 2014, the NIH received about $30 billion. The Cures bill provides an additional $2 billion in annual mandatory funding from fiscal year (FY) 2016 to FY 2020 for an NIH Innovation Fund.
Although lawmakers are proposing to offset this spending increase with other savings, the merits of those savings are dubious. The one-time sale of oil in the Strategic Petroleum Reserve should not offset a potential permanent new spending stream, but go to deficit reduction instead. Other proposed savings are gimmicky without producing real savings, such as a timing shift in Medicare Part D reinsurance payments.
If Congress wants to allocate an additional $2 billion to NIH each year, it should do so by boosting NIH’s discretionary budget subject to the BCA spending cap.
But then Congress wouldn’t be able to use those $2 billion to spend in other areas. And that is exactly the point: Budgeting is about prioritizing. When Congress uses gimmicks to get around budget caps, such as shifting funding from the capped side of the budget to the uncapped side, it not only defies budget discipline, it also undermines trust in Congress as an institution.
Mandatory spending grows on autopilot with few congressional checks. Congress should exert more regular control over a bigger portion of the budget, not less. By shifting funding from the discretionary budget to mandatory spending, Congress reduces transparency and accountability. This is moving in the wrong direction.
Congress’s repeated efforts at going around the BCA spending caps, rather than abiding by them, has many outside observers pressing for a broader spending cap that limits all non-interest spending. Representative Kevin Brady (R–TX) recently re-introduced the Maximizing America’s Prosperity Act (H.R. 2471) which would impose such a cap in line with the spending targets established in Congress’s budget resolution.
Congress should build on the Budget Control Act by broadening its spending cap to decrease opportunities for lawmakers to defy the BCA’s very intent.
