Republicans Are Poised to Raise Spending

April 10, 2015
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Republicans control both chambers of Congress. Republicans trumpet their desire to cut federal spending and control the growth in entitlement programs, but a number of their actions over the last month suggest otherwise.  

First, Congress is supporting large increases to defense spending. The Budget Control Act (BCA) of 2011 sets defense spending at $523 billion for fiscal year 2016, but both chambers want to provide more funding while getting credit for honoring its previous promises. Each chamber authorized $96 billion in additional funding for 2016, using the Overseas Contingency Operations (OCO) slush fund to get around BCA spending caps. That exceeds the $58 billion requested by President Obama for OCO. It also exceeds the $74 billion spent in OCO for fiscal year 2015. In total, Congress will authorize $619 billion in defense spending for fiscal year 2016.

Second, Congress is set to increase spending with its repeal of the Sustainable Growth Rate (SGR). The SGR, passed in 1997, attempts to limit the growth in Medicare spending by cutting payments to doctors if Medicare grows too quickly. Historically, Congress has been hesitant to actually allow the payment cuts to go into effect, so it instead has delayed the cuts 17 times in 13 years.

House Speaker John Boehner and House Minority Leader Nancy Pelosi negotiated a deal in March to eliminate the SGR permanently. In exchange, small reforms to Medicare would be made. However, the deal would expands the deficit. The Congressional Budget Officeestimated that the SGR repeal package would increase the deficit by $141 billion over 10 years.

The House  passed the deal with an overwhelming margin, 392–37, throwing fiscal restraint out the window. The Senate is expected to consider the legislation next week. Severalsenators are pushing for the Senate to pay for the bill before passing it, but their success is far from certain.

Third, Rep. Paul Ryan (R-WI), chairman of the House Ways and Means Committee, is suggesting that Congress could support higher spending than in its budget resolutions. Ryanvoiced support for a deal between Congress and the president to hike spending. As then-chairman of the Budget Committee, he negotiated a similar deal in 2013 that increased spending for fiscal years 2014 and 2015, but promised that spending cuts would resume after that. At the time he said, “We are not turning the sequester [automatic spending cuts] off, we are just giving a little bit of short-term relief for the sequester.” Now, he is suggesting providing more sequester relief for fiscal year 2016, the first year following his original deal.

Ryan has a long history leading the House GOP Conference on budgetary issues. He likely represents the majority view on the issue. Further, the White House has said that it will not support spending bills that match the budget resolution amounts, suggesting that a deal needs to be struck. But Ryan’s statements basically concede the negotiations before they even begin. Higher spending is coming.

It is less than 100 days into the new Republican Congress, and Republicans are already disappointing fiscally conservative voters on spending restraint. Multiple actions over the last month suggest that Republicans may be no more committed to spending restraint than President Obama and the Democrats.

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