Economy & Budget

A responsible plan to cut spending

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Another year, another slow march towards a dangerous showdown over federal funding.

It is almost certain that Congress will fail to pass the required 12 appropriation bills before the fiscal year ends on September 30—the 22nd year in a row it has failed to so. With less than four months left, the Senate has only passed two appropriations bills and the House has passed one and rejected another. Absent a miracle, lawmakers once again face the specter of a government shutdown unless they pass a stop-gap bill funding bill or an omnibus bill slapped together at the very last minute.

{mosads}This annual exercise in budgeting by crisis takes a toll. The fiscal uncertainty can lead businesses to forego major investments, contributing to America’s lackluster economic growth. The constant threat of a government shutdown also empowers lawmakers—on both sides of the aisle—who want to reward special interests and increase spending to hold the country hostage until they get their way. Washington, D.C.’s budget dysfunction is weakening America and driving us deeper into debt.

But it doesn’t have to be this way. Restoring a normal budgeting process free from manufactured cliffs and crises requires thinking outside the box. That’s why Congress should pass a long-term, two-year funding bill that ensures that the spending cuts already established by law are maintained.  

This proposal has three advantages over the status quo. First, it would stop the cycle of budgeting by crisis, providing certainty to job creators. Second, it would cut and cap spending at the bipartisan levels established by Congress only a few years ago. Finally, it would give legislators a chance to fix the budget process and pass normal appropriations bills without the threat of a shutdown.

This plan—we call it “stop, cut, and fix”—would be a win for both economy and the taxpayer.

Here’s why. A two-year appropriations bill would fund the federal government at the levels established in the 2011 Budget Control Act. This law, passed by bipartisan majorities in Congress and signed into law by President Obama,limited non-entitlement spending from 2011 to 2021. After some modification from subsequent legislation in 2013 and 2015, the caps for 2017 and 2018, respectively, are now $1.07 trillion and $1.065 trillion, which amounts to a modest reduction in discretionary spending of 0.4 percent. 

Unfortunately, the current budget cycle will give lawmakers ample opportunity to break these promises, which has become a tradition since the Budget Control Act’s initial passage. The budget battles in 2013 and 2015 allowed Congress to blow past the spending limits by $146 billion in the past three years. (For example: To prevent a shutdown last October, Congress upped the limit for 2017 from $1.04 trillion to $1.07 trillion). Locking in funding levels until 2018 would prevent lawmakers from pulling the same trick this year or next. The savings to taxpayers would be $152 billion.

Equally important, a two-year budget would also help Congress return to a normal appropriations process.

Lawmakers have not seriously debated funding priorities on their own merits in years, mainly because Harry Reid refused to pass a budget during his last five years as majority leader and appropriations bills were largely scuttled last year. Instead, the government has been funded via last-minute “grand bargains” designed to avert government shutdowns. Yet these bills have been a hodge-podge of random items thrown together with little rhyme or reason. Neither lawmakers nor the American people had time to identify what truly deserved to be funded—and what didn’t.

Once the threat of a shutdown is taken out of the picture, Congress could have a much more constructive—and lengthy—debate over how the taxpayer’s money should be spent. Crucially, there’s nothing stopping lawmakers from adjusting federal spending at any point during the two-year period. Congress would have complete flexibility to introduce and pass amended spending bills at any time. Lawmakers would simply have to weigh each proposal’s pros and cons, which is how the budget process is supposed to work in the first place.

This is especially important when it comes to defense spending. Last October, a proposal to increase the Pentagon’s budget was paired with other funding increases as part of must-pass packages to avoid a shutdown. America’s military spending should be unshackled from far-less important items.

Ultimately, a two-year appropriations bill is the best way for Congress to end the era of budget crises and realize the spending cuts lawmakers already promised to make. The real question is whether such a bill can pass.

It certainly can. Republicans would have a strong case to make to their constituents. They can improve the economy, save tens of billions of dollars for taxpayers, and place spending constraints on the next president before he or she is even elected. Congressional Democrats and President Obama would also find it difficult to stand in the way. After all, they’re the ones who have been demanding an end to the annual budget brinksmanship. If they oppose a clean bill that would do just that, they’d have to explain themselves to the American people. That’s an unenviable position a month before an election.

The alternative is for Congress to continue with the status quo of shutdown threats and last-minute deals that leave both the economy and taxpayers in the lurch. Surely it’s time to abandon this failed approach and restore normalcy and certainty to the federal budgeting process.

Koenig is senior policy advisor at Freedom Partners Chamber of Commerce. Visit for more details.

Tags 2017 budget Budget Control Act Democrats Fiscal cliff Harry Reid Republicans U.S. Congress White House

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