It's time to end the era of budgeting by crisis

When the Trump administration proposed reforming the tax code, simplifying and lowering rates, we at Americans for Prosperity argued that it would unleash an economic boom that would produce more jobs and higher wages. Since its enactment in December 2017, that’s exactly what has happened.

The United States has its lowest unemployment rate in 50 years and its highest consumer confidence rate in about 15 years. Businesses are expanding and wages are increasing.

While we were enthusiastically endorsing tax reform, we were warning that if tax cuts were not accompanied by serious spending reforms, a debt crisis loomed.


That crisis is upon us. So it is critical that any deal that is forged to fund the government for the next year or two begins to put Washington on a path toward fiscal sustainability.

If past is prologue, the chances of that happening are not high. Often, the end of year spending package is a massive omnibus, cobbled together in the dead of night, costing trillions of dollars and decorated like a Christmas Tree of unrelated items. The House is getting a head start on that process this time, with a 667-page “mini”-bus that will cost taxpayers nearly $1 trillion.

Taxpayers and future generations would be left to pick up the tab.

Since January 2017, $2 trillion has been added to the federal debt, which now exceeds $22 trillion, or about $67,000 per person.

According to the administration’s latest budget proposal, the annual deficit will reach $1.1 trillion in both fiscal 2019 and fiscal 2020. At this rate, almost $9 trillion would be added to the debt over eight years – close to what was added during the previous administration.

With this ballooning debt will come an explosion of spending on interest – by 2020, we will likely be spending more on interest than on Medicaid; by 2025, we will be spending more on interest than on defense.


Spending is the culprit. Tax revenues are rising, up 2 percent in fiscal 2019 over the same period a year ago. But spending is up 7 percent.

The biggest spending drivers are mandatory programs Medicare, Medicaid and Social Security which are racing toward insolvency. By 2026, Medicare’s hospital insurance trust fund will run out and, by 2035, Social Security retirement benefits will be cut across the board by over 20 percent.

That’s why we can’t afford another midnight budget deal that makes “everybody” happy by plying them with money. The process must be reformed if we are to have any chance of getting our debt under control and preserving the American Dream for future generations.

Rather than rushing to pass a two-year budget that continues the unhappily bipartisan tradition of bloated appropriations, Congress should work in bipartisan fashion to systematically curtail runaway spending.

We recognize that there are substantial differences among voters and lawmakers about the role of government and how to set spending priorities that reflect those differences. That makes compromise difficult.

But when Congress gets around to passing its year end spending deal, it could impose some discipline on itself by including what’s known as an automatic continuing resolution provision. A CR is a stopgap spending bill, usually short-term, that funds government operations, typically at the previous year’s level.

Instead of simply wrapping all spending bills into one giant measure and leaving themselves and the president no choice but to accept it and keep the government functioning or reject it and shut down the government, an automatic CR would fund agencies until new spending bills are enacted. It could also include small automatic cuts as an incentive for Congress to act.

This change couldn’t come soon enough. Shutdowns are highly damaging: Moody’s estimated that the 2013 shutdown alone cost the U.S. economy $20 billion. They create intense uncertainty for agency heads and employees.

An automatic CR would give the president and lawmakers better options, work to get spending under control, and end the pattern of budgeting by crisis.

Russell Latino is vice president, economic opportunity portfolio, at Americans for Prosperity.