It’s the duty of Congress to use American tax dollars responsibly, Richard Stern says.
American taxpayers deserve to know where their money’s going because “the government doesn’t have the moral right to walk up and take whatever it wants of your labors because a bureaucrat thinks they know better than you how to use the resources you produced,” says Stern, director of the Grover M. Hermann Center for the Federal Budget at The Heritage Foundation. (The Daily Signal is the news outlet of The Heritage Foundation.)
There are 12 appropriations bills that move through Congress each year, and according to Stern, it’s the job of lawmakers to ensure that each bill uses Americans’ hard-earned taxpayer dollars well, but also the job of the American people to hold their elected officials accountable to do just that.
“I think we’ve ended up in a society where people have kind of quietly thought, ‘Maybe the government is better at spending that than I am.’ And I think that’s been the genesis of the problem,” he says.
Stern joins “The Daily Signal Podcast” to explain what appropriations are and the approval process for them, and why politicians need to be more transparent and responsible when spending taxpayer money.
Listen to the podcast below or read the lightly edited transcript:
Virginia Allen: We are joined today by Richard Stern. Richard is the director of the Grover M. Hermann Center for the Federal Budget here at The Heritage Foundation.
Richard, thanks for being with us.
Richard Stern: And thank you for having me on today.
Allen: We’re going to go back to civics class, essentially, for a moment here. As we all learned, Congress has the power of the purse. So when Congress passes a spending bill, Congress then is also involved in determining where that money goes and that determining of where the money goes brings us to something called appropriations.
So, Richard, in as simple terms as possible, can you just explain what are appropriations?
Stern: Well, I think you hit the nail on the head. So, whenever the government spends your money, it’s supposed to go through the appropriations committees in the House and Senate who sit down and do that work of deciding which programs make sense, how much money per program, and very importantly, what kind of strings do you put on that?
So does Congress just give a lump sum slush fund to some federal agency or do they say, “No, no, no, you have to use this money this way, but you can’t use it that way”?
Now, that’s the way it’s supposed to work. Part of what we’re going to get into a little later here is, of course, in typical fashion, it doesn’t work that way, but that’s the idea.
Allen: OK. Thank you. That’s a good overview.
And of course, in Congress, as you mentioned, we have these appropriations committees, and so once the budget is passed, the appropriations committee gets to decide how to spend about one-third of the federal budget, that portion of the pie, it’s discretionary spending. This does not include things like Medicare, Medicaid, Social Security.
There are 12 subcommittees under the Appropriations Committee and they debate and discuss these various bills and how much is going where, how exactly do they decide how much funding to approve to each kind of section of the government, each agency.
Stern: I think the most important part is what you said earlier there, which is that appropriations now only covers about a third of the federal budget.
So for people listening, you heard me say, well, it’s supposed to be that all the money goes through there and now it’s like, “Wait a second, why is only a third of the money going through there?”
What’s happened over time is that Congress has slowly said, “You know what? We don’t want to do this process where we have to hold hearings, where it has to be transparent, where there’s an annual review over the spending programs to make sure they’re still living up to our expectations.”
No, no, no, Congress wants to put most of this money on autopilot so they don’t have to be accountable. They don’t have to go back to the American public. They don’t have to hold hearings. They don’t have to do this kind of in full transparent view of the public.
So slowly but surely over two-thirds of government spending, of the money the government takes from you to spend on all kinds of things, now is done through mandatory spending autopilot where it doesn’t go through this process, it doesn’t have an annual review process, it’s just off in the distance. And in fact, agencies, federal bureaucrats, unelected bureaucrats have an enormous amount of power that comes with running those programs.
So that’s that part of the budget.
But to your kind of specific question here, that remaining third where Congress still does the right thing where they still hold hearings and hold the regular annual process, the way it works is they decide what programs either because, like defense, they want to be able to change things around year over year. Or other programs like some of the housing programs that are less popular, they don’t feel like they can get into a mandatory position and so they leave them discretionary.
And so it’s kind of that political calculation that ends up defining how large the discretionary spending pile is and which programs remain discretionary and which remain mandatory.
Now, as you can imagine, there’s always groups of members of Congress, tragically, many that are Republicans, that try to bump up discretionary spending as much as possible.
You’ve heard of earmarks, there are thousands and thousands of those that get offered in these appropriations bills and those have a muted effect in increasing spending in discretionary bills.
But those are just thousands of one-off requests from members of Congress for a grant here to somebody that donated to them, a grant here to some institution that’s important in their district.
But again, it’s these kind of slow perversions of it where discretionary spending has gone from kind of just funding the military, for example, to now the vast majority of it is funding little grants here and there that help at this entity or that entity. And so it’s the government choosing winners and losers, playing favorites in the market.
So, at the end of the day, the budget process is there to try to put a cap on how much discretion spending is happening, but there’s enormous pressure to just blow it up and increase it, stealing your money to fund all of their friends.
Allen: Well, it gets wonky a little bit fast, Richard, and there’s a part of me and I think for many Americans who think, is that intentional? That it gets murky quickly and there’s all of these layers within appropriations and can feel a little hard to track and follow. But as Americans, why should we care about this process and what is happening?
Stern: Absolutely. I think at the end of the day, keep in mind it’s your money. You worked hard, you have a job where you do things that are valuable to other people. You produce a product, you produce a service that enriches somebody else’s life. And then the question is, where does the value of that go? …
And if you want to talk about wonky as well, the government’s got a bunch of different creative ways they can steal money out of your paycheck. But the truth is, at the end of the day, whatever the tax is, whether it’s printing money through the Fed and causing inflation or it’s borrowing from money markets or taxing in any number of taxes, at the end of the day, every dime the government spends is a dime that comes out of your paycheck. It’s a dime that was hard-earned by a hardworking American.
You’re absolutely right, there’s all of these different layers of wonkery. A lot of it’s intentional to confuse things. A lot of it, honestly, was well-intentioned, the kind of parse out all of the different mechanical aspects of spending.
So they each go through some unique consideration process. But the truth is those layers have made it easier to hide the ball on how much money is being taken out and stolen.
But at the end of the day, whether a dollar is capped, non-capped, it’s capped-exempt, it’s this category, that category, every single dollar is a dollar stolen from a hardworking American. And I think that’s the crucial thing to remember here.
Allen: What are the appropriation bills that Congress is debating right now and are there any major programs or spending that specifically conservatives should be concerned about?
Stern: Oh, almost all of it. As you said, there are 12 bills. One of the bills covers Congress itself. It’s called the [Legislature] Branch bill, it just funds Congress.
There’s a bill that covers homeland security, which, of course, is our border security, the human trafficking that’s going on across the border. That bill, of course, never sees the light of day on the floor for the most part because Democrats don’t want to debate it for obvious reasons.
Then there are two different bills that handle defense spending. One of them handles the [Department of Veterans Affairs] and military construction. The other one is kind of the core defense bill.
The other eight bills, so most of the spending, most of the bills, most of the text of the bills cover what are called the non-defense discretionary spending. It’s a kind of wonky way of saying money that isn’t our national security or border security, money that is probably choosing winners and losers on the market.
And if you go through, it’s hundreds and hundreds of programs, but that’s the vast majority of what those other eight bills are. Are grants here, grants their, favoritism here, favoritism there.
Allen: Richard, when do you think was the last time that we had true fiscal responsibility in Congress?
Stern: That’s a good question. It’s a little bit of a cop out, but at some level, last time we had that was the 1920s. And I would say that because back in the 1920s there were a handful of mandatory programs and they kind of made sense.
And so that was really the last time where members of Congress individually had a lot of influence and power, where the committees really did their job, where leadership led but didn’t dictate, where the federal budget by and large was stable, where there was something of kind of a reasonable conversation over how much money do we actually need to take from Americans to fund actual constitutional core functions.
So in some ways, 100 years ago really was the last time.
I would say as recently as the 1990s, under [House Speaker Newt] Gingrich, probably, is kind of the last time that at least within the discretionary pile of things—which is already small at that point, it was already less than half the budget. But at that time, though, that probably was the last time where you had kind of Congress functioning somewhat within kind of the normal process on this. It’s been kind of a rapid deterioration over the last 30 years or so.
Allen: At the core, what’s the problem here and how do we fix it? Is it structural? The whole appropriations process needs to be reformatted? Is it more of just we need to have lawmakers who are making the right decisions on how money is allocated and the process around that? How does this get resolved where we can get back to that place of fiscal responsibility in Congress?
Stern: So, in particular, I think the structure is fine, in the sense that the structure that’s put together—don’t get me wrong, it’s a little bit of put together by a committee, it’s a little overcomplicated from what it needs to be, but it’s an OK structure.
The real problem is that nobody follows the structure whatsoever. It’s a little bit like we talk about border security and the old line on this is [President Joe] Biden, [Barack] Obama before him, just didn’t enforce immigration law. That’s a little bit of what’s happening here.
So I think really the crux of it gets to the, well, why does no one follow the process? And I think a lot of it comes down to members not doing the right thing. But a lot of it comes down to voters, frankly, not putting that kind of pressure on members of Congress.
For my marbles, I think, at the end of the day, what we need is a country that is fully devoted again to the idea that the fruits of somebody’s labors are theirs. That the government doesn’t have the moral right to walk up and take whatever it wants of your labors because a bureaucrat thinks they know better than you how to use the resources you produced.
And I think, at the end of the day, that’s been the problem, is that the Left can walk up and simply say, “I know better how to use your money. Elect me and I’ll build a grand monument over here.” And what they hide the ball on is who that was stolen from. What kind of amazing things would we have done as a society that didn’t get done because that money was stolen?
And it’s really not just the money, it’s the actual goods and services, it’s the things that people produce that’s being stolen by the government. And I think we’ve ended up in a society where people have kind of quietly thought, “Maybe the government is better at spending that than I am.” And I think that’s been the genesis of the problem.
Allen: Richard Stern of The Heritage Foundation. If you-all want to hear more from Richard, you can find all of his work on The Heritage Foundation website, that’s heritage.org, and you can also find his work at dailysignal.com.
Richard, thank you so much for your time today. We really appreciate you taking a wonky and complicated topic and breaking it down for us.
Stern: And thank you as well. It was a pleasure to talk about these.
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