Now that the President, the House, and the Senate have released their budgets for the upcoming fiscal year, many taxpayers are wondering what to make of these competing plans. Certainly, there are a lot of questions to ask while evaluating the merits of a budget: does it achieve balance in a ten-year window? Does it set the foundation for entitlement reform? Does it chart a course for fixing our broken tax code?
While these are all important questions, they are largely academic. Budgets are non-binding. They aren’t laws and cannot enact major policy changes. They are mostly symbolic documents that carry no practical importance – with two significant exceptions.
First, the budget can create a path to reconciliation – an arcane process that can help expedite the passage of policies deemed to reduce the deficit. Senate Democrats effectively used this process to approve large portions of the Affordable Care Act (ACA) in 2010. Many Republicans on the Hill believe reconciliation could be the key to rolling back some of the ACA now that the GOP is in control of both houses of Congress. On this point, taxpayers should cheer both the House and Senate budget, as they both open the door for the reconciliation process.
The second reason the budget is important is for setting the top-line numbers that indicate what Congress can spend in the upcoming fiscal year. On this point, taxpayers should be very, very concerned.
Back in 2011, Congress and President Obama approved the Budget Control Act, a law that while imperfect, did have the salutary effect of establishing budget caps. These caps have represented perhaps the biggest legislative victory for fiscal conservatives in years. By restraining the growth of spending, we’ve seen greater fiscal discipline and a shrinking federal deficit.
Now, just five years after the caps were put into place, the House and Senate budgets would make a mockery of them. Technically, both budgets comply with the caps, but they do so by disingenuously pumping tens of billions of dollars into the uncapped Overseas Contingency Operations (OCO) account.
OCO is supposed to be used solely for emergencies and military operations, but both the Senate and House budgets would turn it into a slush fund that allows them to skirt the budget caps.
The House budget would allow for $94 billion – 38 percent above the Pentagon’s request of $58 billion. The Senate’s budget originally matched the $58 billion request, but later adopted an amendment that pushes that figure up by a whopping additional $38 billion. Interestingly enough, the budget the House passed last year called for total OCO spending of $38 billion in this upcoming fiscal year.
This huge increase in OCO spending has virtually nothing to do with emergencies or ongoing military activities – it is a naked ploy to circumvent budget caps and spend more money on defense programs.
If Congress wants to spend more on defense, it can stick to the budget caps by making spending reductions elsewhere. Yet, they are not only refusing to pursue corresponding cuts elsewhere in the budget, but actually moving in the opposite direction. This week, House leadership is reportedly removing a provision that calls for billions of dollars in spending offsets.
The attitude toward budgeting displayed by both chambers of Congress with their current blueprints is irresponsible and, for fiscal conservatives, should be absolutely unacceptable. As the House and Senate work on their budgets this week, we will see if Congress will listen to the voice of the taxpayers or if politicians will remain deaf to the need for fiscal responsibility.