Budget time is wasted time

By Dr. Harold A. Black

blackh@knoxfocus.com

haroldblackphd.com

Budget time, where the congressional baseball game is just as productive as any appropriations debate. But that devalues the baseball game. I would say that Congress is wasting its time, but that is probably redundant.

Budget time is when Congress thrashes around, pontificates, says a million words, writes 1,000-page bills, yells at each other, tweaks the tax code to hand out favors, and spends more borrowed money. Let’s waste a few words on the hapless, hopeless morass. Even if Congress decided not to appropriate another penny but to keep last year’s budget, federal spending would grow because of the cost-of-living adjustments (COLAs) built into programs like Social Security, the Supplemental Nutritional Assistance Program (SNAP) and civilian and military pensions. In all, there are over a dozen federal programs with COLAs. A modest suggestion would be to eliminate all COLAs, but few politicians (if any) have the will to do so. What about other items in the budget?

Here is basically a repeat of what I write every year at this time, only with a revision of numbers.

Last year, the government spent $6.75 trillion. Of that, $4.1 trillion was nondiscretionary, $1.8 trillion was discretionary, and $900 billion was interest. The major components of nondiscretionary spending are Social Security ($1.45 trillion), Medicare ($865 billion) and Medicaid ($618 billion). The federal government collected $4.9 trillion, meaning that if the government were to use its tax collections to pay only the mandatory components and the interest on the debt, it would not have a penny for everything else. Therefore, it borrowed to fund all discretionary spending, leaving a deficit of $1.75 trillion. Thus, it is literally impossible to not add to the debt unless mandatory spending programs are addressed. But Congress ignores entitlement reform, so the debt must grow every year, regardless of what Congress is doing during budget time. Instead, Congress is doing high-fives on passing a rescissions package that cuts $9.4 billion in spending already appropriated.  Mind you, $9.4 billion is a rounding error in a $7 trillion dollar budget.

Nondiscretionary spending increases gobble up a growing percentage of GDP simply because the escalators increase faster than the growth in GDP. One solution is to cap the percentage of GDP allocated to nondiscretionary spending, eliminating the automatic escalators. Next, raise the full benefit age for Social Security to 70 for those aged younger than 50. Remove the limits on annual contributions to 401(k)s to allow people to increasingly fund their own retirement. Next, limit the federal budget to grow no more than the growth in the previous year’s GDP. This would allow the budget to increase, but not at an increasing rate. Finally, codify these suggestions into law with the provision that only if the president declares a national emergency and both houses of Congress agree with a two-thirds majority will these limits change.

A shorter-term solution was suggested by the sainted Thomas Sowell, who says that the federal government should sell some of its vast holdings of land currently valued at around $2 trillion. “The amount of land owned by the National Park Service alone is larger than Italy. The land owned by the Fish and Wildlife Service is larger than Germany. The land owned by the Forest Service is larger than Britain and Spain combined. The land owned by the Bureau of Land Management is larger than Japan, North Korea, South Korea and the Philippines combined.” Of course, trying to sell the land would incur the wrath of the Sierra Club, the Wilderness Society, the Rainforest Trust, the Nature Conservancy, and all the rest of the environmental organizations who would lose all of their funding and would have to look for real jobs. Donald Trump has no love for these organizations, so why doesn’t he follow Sowell’s advice and have a land sale?

But don’t look for Congress to do any of this. No single Democrat would ever suggest cutting one penny – unless it is to the military. No single Republican – not even the so-called fiscal hawks – would ever suggest anything of value. Every single member of Congress and every single member of any administration (who wants to keep his/her job) is completely totally gutless. Rather than effect real change, they are all content to make the appropriate clucking sounds and keep passing the problem off to the next group of legislators and bureaucrats. Trump is not the only one saying, “What, me worry?”