After this week’s election, members of Congress will return to Washington for a lame‐duck session during which they will confront a “must‐pass” deadline of their own making. Lawmakers will need to address the December 16th expiration of discretionary appropriations or federal government operations will partially shut down.
They have two main choices: adopt a continuing resolution to extend federal funding at current levels into early 2023 or adopt a massive new spending bill. Extending the continuing resolution into 2023 offers lawmakers the best chance to take another crack at putting discretionary spending on a more responsible path.
A more responsible approach would return discretionary spending to pre‐pandemic (2019) levels (see the chart below for historic spending and a selection of possible spending projections). Lawmakers running up emergency deficit spending at the height of the COVID-19 pandemic should not establish a higher spending baseline for years to come. As pandemic needs wind down, so should government spending.
To achieve the savings necessary to return to pre‐pandemic spending levels, Congress can eliminate spending that is unnecessary, wasteful, ineffective, or outside the scope of federal government involvement. This requires better prioritization and acting on recommendations made by governmental and advisory groups. Unauthorized appropriations would be a great place to look for potential savings. Cutting programs that received massive cash injections from the COVID stimulus bills down to their pre‐pandemic size is only reasonable. Outside groups such as the Cato Institute, the Heritage Foundation, the Committee for a Responsible Federal Budget, Citizens Against Government Waste, and the National Taxpayers Union Foundation in collaboration with the U.S. Public Interest Research Group Education Fund, among others, have offered up many ideas for spending cuts. Even the nonpartisan CBO includes several discretionary options to reduce the federal deficit.
Where there is a will, there is a way.
And discretionary savings are just the beginning. The discretionary spending bills, set to expire on December 16th, govern the funding levels for about one‐third of the federal budget. That includes national defense and about a thousand domestic social and economic programs. The remaining two‐thirds of the budget consists of so‐called mandatory spending and interest payments.
Mandatory spending, unlike the name suggests, does not mean “required” spending. Instead, it refers to programs like Social Security and Medicare, which Congress has structured such that they spend money on autopilot. These programs grow with inflation and wages, based on increases in eligible populations, and with growing life expectancies. What makes mandatory programs unique is that once authorized, they spend and grow without regular budgetary reviews.
All non‐interest spending should be subject to regular review. Senator Ron Johnson (R‑WI) suggested that “we ought to be paying attention to the sustainability of Social Security, Medicare, and other ‘mandatory’ spending programs, by putting everything ‘on budget’ as discretionary spending.” Senator Mitt Romney (R‑UT) introduced the more modest bipartisan TRUST Act, which would “establish congressional rescue committees to develop recommendations and legislation” to improve programs governed by trust fund mechanisms, including Medicare and Social Security.
Congress can buy goodwill and establish an effective precedent for reforming entitlement programs by first controlling the growth in discretionary spending.
The 118th Congress should dedicate itself to restoring fiscal responsibility across the federal budget, starting with putting discretionary spending on a more responsible path. When lawmakers return to Washington next week, this lame‐duck Congress should extend the current continuing resolution into early 2023, giving the new Congress a chance to return discretionary spending to pre‐pandemic levels with sensible spending cuts.
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