Politics & Policy

Truth in Budgeting

As Americans struggle to balance their checkbooks in the real world, lawmakers in Washington continue to apply postmodern accounting tricks to mask their out-of-control spending habits. New legislation introduced by Sens. Jeff Sessions (R., Ala.), top Republican on the Senate Budget Committee, and Olympia Snowe (R., Maine) would help to tamp down some of these shenanigans.

For example, President Obama’s latest deficit plan claims to “save” $1.1 trillion, or about one-third of the entire package, by not continuing to fund the Iraq and Afghanistan campaigns at surge troop levels — which is to say, by not spending money that would never have been spent in the first place. His controversial health-care bill “pays for” a new long-term care insurance program (the CLASS Act) by collecting ten years worth’ of premiums to fund just five years worth’ of benefits.

Both parties have sought to use such gimmickry to their advantage. The spending deal struck in April between the White House and House Speaker John Boehner (R., Ohio), hailed by Republicans leaders as the “largest real-dollar spending cut in American history,” turned out to be riddled with phony savings, including $4.9 billion recouped from a crime victims’ reserve fund that would not have been paid out in any case. Since 2005, budget gimmicks have, despite rules intended to promote fiscal restraint, enabled Congress to allocate more than $350 billion in additional deficit spending.

While it is no substitute for amassing a political majority in Washington with a firm commitment to reducing federal spending, particularly on entitlements, cracking down on these deceptive accounting practices would go a long way toward restoring fiscal sanity to the federal budget process.

The new Republican bill, known as the Honest Budget Act, would strengthen congressional rules, and create new ones, that would make it more difficult for lawmakers to continue to claim imaginary savings that in reality don’t save taxpayers a dime.

The Democrat-controlled Senate hasn’t passed a budget in nearly 900 days. As a result, appropriators are not bound by any enforceable spending limit. This has led to a series of ad hoc spending agreements and little or no budgetary restraint. The HBA would establish a 60-vote threshold in the Senate in order to advance appropriations bills in the absence of a budget resolution.

The bill would impose strict limits on the oft-abused “emergency” spending designation, intended to cover genuine unforeseen emergencies such as natural disasters or terrorist attacks, but frequently invoked to exempt normal spending on discretionary programs such as food stamps, skirting statutory “pay as you go” requirements. A 2008 appropriations bill awarded $210 million in emergency funding to conduct the 2010 Census, a regularly scheduled project written into the Constitution itself — hardly an unforeseen emergency. The Honest Budget Act would require all emergency spending to be offered in separate amendments and would allow members to object to any measure with a point of order requiring a three-fifths vote to overturn.

In November 2010, in an effort to highlight his professed support for “broad sacrifice” on deficit reduction, the president announced a two-year federal pay freeze. Congresses heeded this call by passing legislation to temporarily suspend cost-of-living pay increases for federal workers. However, this hasn’t prevented more than 70 percent of federal workers from receiving “within grade” pay increases, at a rate of 2 to 3 percent of their total salary. As a result, the president’s so-called freeze is costing taxpayers approximately $1 billion per year. This bill would eliminate these within-grade increases.

Phony rescissions (the war-funding gimmick), time shifts (CLASS Act funding) and deceptive changes to mandatory spending programs (the crime victims’ reserves savings) would also be targeted, along with a host of other tricks that have for too long allowed federal lawmaker to operate outside the realm of reality-based budgeting.

Senator Sessions has been clamoring all year for an open and honest budget process. House Republicans have done their job by passing a bold, responsible budget resolution. Since then, however, responsibility for solving the country’s extraordinary financial woes has been relegated to closed-door negotiations and now a twelve-member “supercommittee.” By introducing the Honest Budget Act, Sessions has given the remaining 523 of our elected officials an opportunity to act responsibly to curtail Washington’s destructive spending spree.

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