Keep budget caps, cut entitlements: Column

Will Congress keep its promise to the American people?

Both Republicans and Democrats will have to answer this question before the end of the year. On Sept. 30, they passed a short-term federal funding bill that will run through Dec. 11. Once that deadline arrives, they must decide whether to keep or break their bipartisan promise to rein in Washington’s spending addiction.

They made this vow in 2011 when both parties passed the Budget Control Act. It established modest spending caps that limit the annual growth of domestic and other non-entitlement spending, which constitutes roughly 30% of the federal budget. As one of the few fiscal restraints enacted during President Obama’s two terms, the caps have been an important step in curbing Washington’s wasteful spending.

Yet while they passed four years ago with bipartisansupport, today the Budget Control Act is drawing bipartisan opposition.

Democrats are railing against any limitation on their ability to spend taxpayers’ money. Led by Minority Leaders Nancy Pelosi and Harry Reid — both of whom voted for the Budget Control Act in 2011 — they now oppose any budget that keeps the caps. Many Republicans, meanwhile, want to increase defense spending. And on both sides, representatives and senators are decrying the Budget Control Act’s spending cuts, often labeling them as “draconian.”

Yet this is nothing more than bluster. While many American families have tightened their belts in recent years, the Budget Control Act’s cuts only amounted to three cents for every dollar the federal government spends. From 2011 to 2014, it reduced discretionary spending by about seven percent, or $87 billion, while doing essentially nothing to address growing entitlement spending.

The act also more than makes up for these cuts in the years to come. Next year the caps will rise by $2.4 billion. They will increase by a further $127 billion over the next five years, with nearly $240 billion in discretionary spending added within a decade. Over that same period, the approximately two-thirds of the federal budget that goes to entitlements will increase by 68% — $1.5 trillion.

Which explains why breaking the caps is a foolish fiscal move. Without them, government spending — and debt — would rise at an even faster pace.

The national debt more than tripled under the past two presidents, rising from less than $6 trillion in 2001 to more than $18 trillion today. The modest caps are essentially the only thing restraining it from being even higher.They have contributed to the recent decrease in annual federal deficits, which fell from $1.3 trillion in 2011 to an expected $425 billion in 2015. They are also partially responsible for the consecutive decreases in federal spending in 2012 and 2013 — a feat last seen in the mid-1950s.

But we must still remember the national debt is rising by hundreds of billions of dollars every year. The Congressional Budget Office estimates annual deficits will climb back above a trillion dollars within a decade. The CBO also projects that repealing the Budget Control Act would “increase the risk of a fiscal crisis” long-term and “reduce the nation’s output and income.”

That is the last thing hardworking Americans need — especially since incomes in June were nearly a full percentage point lower than they were at the end of the recession in June 2009.

If lawmakers insist on raising any part of the discretionary budget, they should trade the increase with a corresponding and immediate decrease in mandatory spending. Entitlement programs and interest payments, which consume 66% of the federal budget today and an expected 77% within a decade, are the primary drivers of the rising national debt.

Reforming entitlements while adhering to the Budget Control Act’s overall spending limits would show that Congress is truly serious about tackling Washington’s spending addiction. But simply abandoning the caps and increasing federal spending is unacceptable. Both parties passed the Budget Control Act four years ago because they recognized that out-of-control federal spending was harming future generations.

That was true then and it’s still true today. No matter how tempting it may be, both Republicans and Democrats should remember that breaking the budget caps means breaking their promise to the American people.

Marc Short is president and Andy Koenig is senior policy advisor at Freedom Partners Chamber of Commerce.

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