|
This week, America’s national debt surpassed $40 trillion.
This sobering milestone makes it even more apparent that Congress can no longer delay addressing the fiscal state of our nation. This record level of debt threatens our national security, strains our vital safety net programs, and creates a cascade of negative consequences for Americans from Main Street to Wall Street.
Part of our national debt woes stem from Congress’ flawed budget process. Let’s break down why it never seems to work.
The U.S. Constitution gives Congress the ability to raise and spend money. It also outlines where and how revenue, or taxes, must be created. But the Constitution does not explicitly state how the government must budget its money.
In practice, discretionary federal spending is primarily handled by the Appropriations Committees, but this only covers part of annual expenditures. The larger share of annual expenditures is what we call mandatory spending, like funding Social Security and Medicare, and is spent automatically in accordance with current law not subject to annual appropriations. Revenue measures—the taxes and other policies that generate the money for the spending—are considered by the tax‑writing committees: the Ways and Means Committee in the House and the Finance Committee in the Senate.
Prior to 1974, there was not a formal process for combining the two functions. Then in the early 1970s, President Richard Nixon directed the Office of Management and Budget (OMB) to withhold funds appropriated by Congress that were intended for programs and activities he sought to curtail.
Congress responded with passing the Congressional Budget and Impoundment Control Act (CBA). This landmark legislation created the Congressional Budget Office, House and Senate Budget Committees, and established procedures under which Congress would begin to adopt an annual budget resolution.
Budget resolutions set the total revenue target, government spending, the resulting annual deficit or surplus, and the estimated total debt over the next five to ten fiscal years. On paper, the CBA laid out a sound, structured approach to developing budget resolutions. In reality, Congress has struggled to carry out the process as intended.
Budget resolutions are non-binding. There are few direct consequences for Congress if it strays from the blueprint, and Congress has, in the past, waived protections meant to enforce it. In modern times, budget resolutions have typically been used as a vehicle to begin a process known as “budget reconciliation.”
As I have discussed before in this newsletter, reconciliation is the process under which Congress enacted the Tax Cuts and Jobs Act, the American Rescue Plan, the Inflation Reduction Act, the Working Families Tax Cuts, and most recently, the Secure America Act.
To kick off the reconciliation process, the House and Senate must adopt budget resolutions containing instructions for authorizing committees to increase or decrease the deficit. For example, a hypothetical budget resolution used for reconciliation could direct the House Agriculture Committee to decrease the deficit by $100 billion over the next decade. Once the resolution is adopted, authorizing committees begin drafting legislation to meet their respective spending or saving targets.
The use of reconciliation to pass large legislative packages has grown increasingly common. This is because reconciliation bills only require a simple majority in the Senate, allowing them to bypass the 60‑vote threshold needed to overcome a filibuster for most other pieces of legislation.
You can see how spending could get so out of control with a broken budget process.
If we’re going to meet the challenges of today and tomorrow—from a $40 trillion national debt to more than $1 trillion in annual interest payments and the looming insolvency of major trust funds like Medicare and Social Security—Congress must fundamentally rethink how it budgets.
That is why I recently introduced the Budgeting for a Better America Act. Alongside a bipartisan group of lawmakers, my bill addresses the failures of our current budget process and incorporates reforms to improve transparency and prevent runaway spending.
Specifically, the Budgeting for a Better American Act would require Congress to adopt a biennial budget framework and establish a bipartisan fiscal commission. These solutions, among others included in the bill, would help restore fiscal responsibility to our nation.
To dive deeper, you can read more about my bill HERE. |