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Debt v. Spending

tax reform government spending moneyby Gordon S. Jones

Since getting the boot from the United States Senate, Bob Bennett has been writing a weekly column in the Deseret News, one of Utah’s two daily newspapers (and the only one that doesn’t periodically chastise its readers for being too stupid to understand its editorial positions). Occasionally ex-Senator Bennett reminds us that he is a very smart man with many good ideas. Occasionally he reminds us why the voters got rid of him. He does so in his op-ed of Monday, 7 October.

In his short essay, which you can read yourself here, Bennett tells us why it is important not to default on commitments made to those who have lent the U.S. money, and indeed it is. He neglects to mention the spending that made this borrowing necessary – spending to which he was a major contributor. When Bennett took office, the national debt stood at about $6 trillion. By the time he left it had grown to about $14 trillion.

During his 18 years in the Senate, Bob Bennett voted for 132 out of 133 appropriations bills on final passage in the Senate. Appropriations bills are the bills that actually spend the money. 

The size of this debt and its growth trend is what should concern us far more than today’s fight. The Congressional Budget Office projects that by 2038, public debt will reach 100% of GDP. By 2088, just paying the interest on the debt will consume 50% of total revenue. In the words of the CBO, “At some point, investors would begin to doubt the government’s willingness or ability to pay U.S. debt obligations, making it more difficult or more expensive for the government to borrow money. Moreover, even before that point was reached, the high and rising amount of debt that CBO projects under the extended baseline would have significant negative consequences for both the economy and the federal budget.”

Yes, there is a short-term problem, but the long-term problem is horrendous. Some (but not all) Congressional Republicans are attempting to get a handle on that long-term problem, a problem for which Bob Bennett shares responsibility.

What these thoughts make clear is that the root of the problem is excessive spending. (Yes, it is a deterioration of values and the desire for immediate gratification that drives the spending, but this is going to be an article about mechanics, not moral philosophy – for which I’m ill-suited anyway.)

In brief, whatever problem we look at today, we can see that it is driven by a lack of spending self-control on the part of Washington. Congress spends too much!

The deficit? The deficit is created when Congressional spending exceeds tax revenue.

Taxes? Taxes have to be raised because Congress spends too much.

Inflation? Relatively low right now, but ominous signs on the horizon. Congress has spent so much more than it has taken in that there will be tremendous pressure to “monetize” the debt – pay it off by printing more money.

The housing market? In the tank because Congress spends too much. Congress encouraged—even worse, demanded—that the banks lend to people unlikely to be able to make their mortgage payments. Congress then spent like drunken sailors to make good on its regulatory folly.

Weak dollar? The dollar is weak because the unprecedented deficit spending is already leading to very strong growth in the money supply, threatening future inflation.

The future of your children and grandchildren? There is only one way to save their future, and that is to stop spending.

International standing of the United States? Precarious, not because we are militarily weak (though we are certainly weaker than we should be in this dangerous age). Not because we are so apologetic about our past “sins” (though the pale pink of the “red line” didn’t do us any good). No, our standing is in decline because foreign governments own enough of our debt that they can “suggest” what our foreign policy should be. They own that debt because Congress spends too much.

Unemployment? High and persistent. When Congress spends more than it takes in, it borrows to make up the difference, crowding out the private borrowing that finances the business expansion that creates jobs. The money Congress is spending is killing the American job-creating machine.

Earmarks? That’s government spending. Some excuse earmarks on the grounds that they amount to only 0.56 percent of federal spending. That’s already too much, but the fact is that when an appropriations (spending) bill has your earmarks in it, you can’t vote against it, no matter how much that bill busts the budget. Earmarks are the oil that keeps the Congressional spending machine running smoothly.

Big Government? That’s a government that spends too much, because it has a Congress that spends too much, because it has Appropriations Committees that can’t say no to spending requests, because the members of the Appropriations Committee vote in lock-step to loot the taxpayers to pay for favors for each other, using their power as appropriators to bribe the ordinary members of Congress to go along.

Political scientists have for a generation noted that the real division in Congress is now between Republicans and Democrats, but between “appropriators” and “non-appropriators.”

This is how it works:

The Senate Appropriations Committee has 30 members (it is the largest committee in the Senate) representing 30 different states. Given the enormous pressure there is on committee members to stand together in support of appropriations bills as they come to the floor, that means that any spending bill, no matter how outlandish, starts out with 30 votes.

But it’s worse than that, because each committee member represents a state that has another Senator, and those Senators are under considerable pressure not to embarrass their in-state colleagues by rejecting an appropriations bill their colleague approved. That is especially true if the two Senators from the state are members of the same political party.

For example, when an appropriations bill comes to the floor today, it has already been approved by (let’s say) Thad Cochran, Republican Senator from Mississippi. Naturally, Cochran will now support it on final passage. But almost always, Senator Roger Wicker, the other Senator from the Magnolia State, will support it as well, in solidarity.

The situation in the House is similar. The Appropriations Committee there has 51 members, constituting 12% of the House. Almost every state has at least one member from its delegation on the Committee. However, the intra-state loyalty bonds are somewhat weaker. It will register with Cochran how Wicker votes; it is less likely that Sam Farr, Democrat from California and a member of the Committee, will be keeping a close watch on his California colleague Eric Swalwell.

That means that any appropriations bill really starts out with a majority of the Senate and the House inclined to vote for it. No wonder appropriations bills are never defeated! The reality is that appropriations bills are usually supported by about three-fourths of the membership of the two houses, and by solid majorities of both parties. That is why appropriations bills are rarely rated as “key votes” by such organizations as the American Conservative Union: such votes don’t “discriminate” between “good” members and “bad” members. Almost all members vote for them.

What can be done about it?

Here are a few suggestions:

Term limits on Appropriations Committee membership would be a place to start. As members stay on the committee term after term, they absorb the “culture of spending” that the committee teaches. Membership on some other committees (Budget, for example, and Intelligence) is term-limited.

Another possibility is splitting up the committees into their 13 subcommittees, so that the built-in constituency for any reported bill is reduced to 15 or 16 in the Senate, and about the same number in the House. Instead of starting out with 30% of the Senate and 12% of the House, support for a spending bill would begin at 15% in the Senate and less than 4% in the House. As a practical matter, the subcommittees are virtually autonomous now. Yes, the subcommittee refers its proposals back to the full committee, but the full committee simply waves it on to the full Senate or House.

Enforce the rules against legislating on an appropriations bill. Senate and House rules provide that bills appropriating (spending) money cannot contain substantive changes in the law. This rule is routinely violated in the Senate, usually without any objection from individual Senators who might want to use this process themselves some day. It is more openly violated in the House, where the Rules Committee can simply waive points of order against legislating on an appropriations bill. Since the Speaker controls the Rules Committee, this is something John Boehner could do unilaterally tomorrow.

As things stand, appropriating money for any program that has not been re-authorized by one of the authorizing committees is “deemed” to constitute re-authorization. This is a specific (and particularly pernicious type of legislating on appropriations). Planned Parenthood gets taxpayer dollars year in and year out, under Title X of the Public Health Services Act, even though the authorization for that title expired 15 years ago or more.

Earmark reform is an obvious answer to some of the worst aspects of appropriation abuse. Both houses of Congress have fiddled with moratoria and bans over the last few years, but close observers of Congress report that the practice continues. Of course Congress has the power –and the responsibility – to direct how taxpayer funds are spent, but all that means is that earmarks need to be openly proposed, debated, and voted on. They should not be hidden in “committee instructions” to bureaucrats, and they should not be added in conference committees unless they are subject to an up-or-down vote by the two houses of Congress.

Institutional reform is a hard slog, and it isn’t glitzy. But if we are going to bend the spending curve away from total disaster, as the CBO warns, it is vital.

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Gordon S. Jones is a senior fellow at Frontiers of Freedom.  Jones is also an adjunct professor at Utah Valley University and Salt Lake Community College. Jones has extensive experience in Congress, in public policy, and elective politics.