JAMES CARTER: Spending Faster Than The Speed Of Light

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JAMES CARTER: Spending Faster Than The Speed Of Light

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The federal budget is an utter mess. Unsurprisingly, the congressional budget process responsible for that mess is no better. It doesn’t take a rocket scientist to understand that when a process consistently leads to undesirable outcomes, it’s time to change it.

Congress last overhauled federal budget procedures in 1974. Signed into law by former President Richard Nixon, the Congressional Budget and Impoundment Control Act — designed for the era of ABBA and bell bottoms — sought to give Congress better tools for setting multiyear spending and revenue targets, engaging in a thoughtful weighing of budget trade-offs and reconciling the law to reflect national priorities.

Unfortunately, the Budget Act failed to achieve much of anything it was designed to accomplish. It was poorly designed for the 1970s, much less for today.

Consider the results thus far:

  • Congress exercises little self-control over federal spending. Last May, the Congressional Budget Office (CBO) estimated federal spending would total $5.874 trillion in fiscal year 2023 — that’s a spending rate of $186,263 per second and, ironically, nearly identical to the speed of light (186,282 miles per second). But, following Congress’ latest spending frenzy, CBO raised its spending estimate for fiscal year 2023 to $6.221 trillion, or more than $197,000 per second. (Albert Einstein was wrong; Congress has demonstrated it is possible to spend faster than the speed of light!)
  • The federal government has run a budget deficit for 49 of the past 53 years! Already projected to total $1.4 trillion this year, the deficit is expected to more than double to $2.9 trillion by 2033.
  • The federal debt is out of control! Earlier this month, gross federal debt topped $31.4 trillion. That’s the equivalent of $93,600 of debt for every man, woman and child in the United States. (Hide your checkbook!)
  • Net interest on that debt is projected to be one of the fastest-growing federal expenditures over the coming decade. Last year alone, interest costs jumped 35% to $475 billion. And this year, CBO estimates net interest costs will grow another 35% to $640 billion. As massive as those numbers are, CBO further estimates that interest will more than DOUBLE to $1.429 trillion by 2033.
  • And all of these undesirable outcomes are despite the fact that Americans are paying a record amount in federal taxes. According to CBO’s estimate for the fiscal year just ended, federal revenue has jumped 43% just since 2020!

The congressional budget process clearly isn’t working. It’s got to go.

As former Sens. Kent Conrad and Judd Gregg, both former chairmen of the Senate Budget Committee, wrote nearly a decade ago: “Government shutdowns, fiscal cliffs, temporary fixes and retroactive policy changes — all without serious consideration of our nation’s fiscal health — have become the new budgetary world order. Even when budget rules are in place, lawmakers evade them with gimmicks, emergency designations and waivers that result in the costs being added to our debt.”

Instead of providing members of Congress with countless creative ways to spend and borrow without reservation, the congressional budget process ought to instill fiscal discipline. This would result in a thoughtful weighing of budget trade-offs and priorities and would help remind Congress that it is not playing with Monopoly money. But, most importantly, the congressional budget process ought to encourage federal tax and spending policies designed to maximize economic growth and prosperity.

As Texas Republican Rep. Jodey Arrington, the chairman of the House Budget Committee, explains, “The congressional budget process is fundamentally broken and will continue to yield bad results and incentivize bad behavior until we address the root causes.”

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The budget process is in sore need of a total rewrite, and a good first step would be to give Congress the means to control spending by replacing the federal debt ceiling — it’s totally ineffectual — with something akin to Switzerland’s “debt brake.”

A debt brake would limit federal spending to the level of federal receipts over the course of the business cycle. It’s also the basis of the “Business Cycle Balanced Budget Amendment” Chairman Arrington introduced last year in the House along with Sen. Mike Braun in the Senate.

“The first lesson of economics,” so wrote the Hoover Institution’s Thomas Sowell, “is scarcity: There is never enough of anything to satisfy all those who want it.” He quickly added, “The first lesson of politics is to disregard the first lesson of economics.” That is the root of the problem we face as a country. Solving that problem will require Congress to reform its budget process and quit acting as if it’s playing with Monopoly money.

James Carter is the director of the America First Policy Institute’s Center for American Prosperity. Previously, he served as deputy undersecretary of labor under President George W. Bush and as chief economist on the minority staff of the U.S. Senate Budget Committee.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

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