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Biden’s Budget Pageant Ignores Easy Ways to Reduce Debt

William L. Kovacs

April 2022

Biden’s Budget Pageant Ignores Easy Ways to Reduce Debt

On March 28, 2022, President Biden hosted the annual Budget Pageant. This release of a massive book of proposals and charts is rarely taken seriously by a Congress that operates under a dysfunctional appropriations process. Many in Congress quip the budget is “Dead on Arrival.” Unfortunately, those quipsters ignore their primary constitutional responsibilities to raise revenue, pay debts, and provide for the general welfare, whatever that might mean to any given Congress. Instead, Congress usually authorizes the president to print as much money as can be printed with the paper and ink available.

The Budget Pageant continues for a simple reason – the president and Congress need to divert the public’s attention to stupid proposals since both are unwilling to manage government operations with the revenue raised.

For the FY 2023 budget, Biden is proposing to spend $5.9 trillion, which is 30% more than the last pre-Covid budget in 2019. Moreover, Biden fails to mention that taxpayer money is flowing into the treasury at its highest level ever. The Congressional Budget Office estimates a record tax collection of over $ 4 trillion. Why is it so hard for the federal government to live within a $ 4 trillion budget?

Biden’s budget claims it needs more taxes, but it will reduce the national debt by $1trillion over the next ten years, about $100 billion a year. Inflation, however, is running over 8 %, and the interest on the national debt of $27 trillion is $ 305 billion annually at a $1.4% interest rate. A 1% increase in interest rates will require an additional interest payment of $300 billion. A 2% increase in the interest rates will require an additional $600 billion payment. Biden needs a remedial math class. Then Biden proposes to tax billionaires on unsold assets. The only positive aspect of this proposal is it will create significant work for already wealthy lawyers and accountants.

Since the president’s budget proposals are irrelevant, and Congress is the only entity authorized by the Constitution to raise and spend money, it’s time for Congress to act responsibly. Sadly, Congress makes reducing the national debt far too complicated. Members constantly fight to save thousands of federal programs that are only important to lobbyists but irrelevant to most of the American people. Congress should limit its spending to items benefitting the nation.

By refocusing the discussion on the national interest, it is easy to find programs to cut by looking at programs Congress ignores but continues to fund for lack of interest in conducting oversight. If Republicans retake control of Congress and they are serious about reducing the national debt, they can do it without disturbing the economy.

http://choicespregnancycentre.co.uk/support-us/ The Seven Doable Debt Reductions Tactics Republicans Can Apply in 2023

  1. cytotec online pharmacy Zero Based Budgeting http://vantagehsi.com/services-offered-vantage-healthcare-services/ . Zero-based budgeting is defined as the “[A] method of budgeting in which all expenses must be justified for each new period. The process of zero-based budgeting starts from a ‘zero base,’ and every function within an organization is analyzed for its needs and costs.” Using this method will force Congress to review the value of the many thousand federal programs that continue without any oversight. The perfect example is Congress funding programs that it fails to reauthorize.
  2. Congress should not fund unauthorized laws. The most manageable budget cuts would be to refrain from funding laws Congress has not authorized. “In FY 2021 appropriations, the Congressional Budget Office identified 1,068 authorizations of appropriations, stemming from 274 laws, totaling $432 billion, that expired before 2022.” If Congress is unwilling to reauthorize expired laws, Congress should let them expire. Since House Rules prohibit the funding of laws not authorized by Congress, letting those unauthorized laws expire is an easy savings of almost one-half trillion dollars.
  3. Review and vote on every expenditure in the Judgment Fund. The Judgment Fund is the mother of all slush funds. It is a permanent, indefinite, and unlimited congressional appropriation continuously available to pay money judgments entered against the United States and settlements of cases in or likely to be in litigation with the United States. It is so secret that Congress no longer even debates any specific payments. The Department of the Treasury pays the claims upon receiving completed forms. President Obama used the Judgment Fund to deliver $1.7 billion in cash to Iran as a bribe to sign the nuclear agreement. Before 1956 Congress was required to approve each payment from the Judgment Fund. To relieve itself of responsibility, Congress changed the law so it did not have to approve each payment. By reinstating the pre-1956 rules, Congress could save taxpayers tens of billions of dollars by rejecting improper payments.
  4. Enact a fair, simple tax code that focuses on raising money, not legislating behavior. The Income Tax Code is ridden with exemptions, deductions, credits, and deferrals so the very wealthy can avoid taxes and the poorest are exempt from taxes. Congress can reverse this complexity by eliminating the 8-million-word tax code and replacing it with the 1913- four-page Form 1040, which includes instructions. The benefit of this simple approach is it captures a more significant amount of tax owed by closing the “tax gap.” The IRS defines the tax gap as the difference between actual taxes owed for a given tax year and the amount paid. The gap results from the under-reporting of income, non-filing, and tax evasion. While the exact amount is unknown, the IRS estimates it to range from $574 to $700 billion annually. A complex tax code invites under-reporting and manipulation, which is exactly the current tax code.
  5. GAO’s Generally Accepted Accounting Principles (“GAAP”). Congress mandates GAO to perform a GAAP analysis of federal spending and assets and provide recommendations to ensure the financial reporting by the agency is transparent and consistent. Every member of Congress should read these reports and implement the findings on mismanagement. One specific GAO recommendation is for the federal government to address the government-wide improper payments, estimated to be $175 billion. Saving money by not paying the wrong parties seems like a doable procedure. The amount of information available to Congress for making smart debt reduction decisions is overwhelming. It is time Congress implements the advice given it.
  6. Make Federal spending a kitchen table issue. Congress should make a kitchen-table list of the most important national programs. A simple way to approach this task would be for each congressional committee to rank each program within its jurisdiction. The appropriation committees would work down the priorities list until the revenues raised by taxes are expended. At that point, Congress would have to cease spending money on non-priority programs, e.g., studies of shrimp on a treadmill, or admit to the taxpayers; that it wants to borrow money to fund programs of little value. This kitchen-table process of spending only up to revenues received could save another $1plus-trillion annually, even if Congress expended a few hundred billion on some lower value programs.
  7. Eliminate congressional gifts to the largest corporations. Congress gives tens of billions of dollars annually to the largest corporations through grants, tax credits, and loan guarantees. These are pure gifts to Boeing, General Motors, Ford, GE, Chase, and hundreds more. There are simply no reasons Congress needs to subsidize the largest and most profitable global corporations. According to the Good Jobs First report, Boeing, having a market value of $112 billion, received $71 billion in loan guarantees and bailout assistance in 2012. With a market value of $ 68 billion, General Motors received almost $1.1 billion in federal grants or tax credits and over $50 billion in loan guarantees and bailout assistance. Even a smaller, publicly unknown company, like X-Energy, LLC, received a $ 5.3 billion federal grant. Congress provides thirty-four types of tax credits for companies involved with research, renewable fuels, improving energy efficiency, maintaining railroad tracks, making distilled spirits or electric cars, etc. The tax credits allow a company to directly deduct the amount of the credit from its tax bill. These are just gifts to corporations.

Implementing some combination of these seven proposals would reduce the national debt by over $1 trillion a year without disturbing programs Congress views as a “must fund.” If Republicans are serious about reducing the national debt, now is the time to be responsible and just do it.

William L. Kovacs has served as senior vice-president for the U.S. Chamber of Commerce, chief counsel to a congressional committee, and a partner in law D.C. law firms. His book Reform the Kakistocracy is the winner of the 2021 Independent Press Award for Political/Social Change. His second book, The Left’s Little Red Book on Forming a New Green Republic, quotes the Left on how it intends to control society by eliminating capitalism, people, and truth.

 

 

 

 

 

 

 

 

 

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  • It Is Unjust for Congress to Fund Expired, Unauthorized Laws

It Is Unjust for Congress to Fund Expired, Unauthorized Laws

William L. Kovacs

January 2022

It Is Unjust for Congress to Fund Expired, Unauthorized Laws

 

Republicans and Democrats have used their political power to impose a massive and unjust national debt of $30 trillion on future generations. Since this debt has been imposed through a law-making process that did not have the participation of those who will be burdened with its payment, it is an unjust law. As such Congress has a moral duty and the legal power to remedy this injustice. If Congress fails to address this issue, it creates a high probability of future generations living in involuntary servitude to the federal government.

Most Americans understand debt can be reduced in several ways, cut spending, raise taxes, inflate it away or default. Since all options are painful and likely disruptive to the beneficiaries of government spending, Congress just continues spending.

Before continuing with its spending, Congress must keep in mind, complex societies collapse. Massively indebted societies collapse. Societies with their militaries deployed throughout the world collapsed. Highly regulated societies collapse. The U.S. is all these combined, contentedly sitting on a bubble of debt, unable to address the serious risks it poses. Congress and the recipients of government largesse delude themselves into believing collapse can’t happen here. Unfortunately, collapse has happened to every major empire in history and it will happen here unless the risks from debt are reduced.

As with all collapses, societies can live with risk for decades. At some point, however, if not addressed, risk turns into a disaster; society slips into the abyss. Once in the abyss, it can take centuries to reemerge as chaos rules.

To reduce our national debt, everything must be considered: taxes, spending, sale of assets, elimination of overreaching laws and regulations, and transferring to states programs they can implement better and more efficiently than the federal government. While dramatic options may exceed the courage of today’s politicians, there are smaller steps that could reduce the national debt by hundreds of billions of dollars. Even a small step to start reducing the debt would be a giant leap in government accountability.

Congress could obey its rules and stop funding laws that have expired; laws that have no authorization

For FY 2021 appropriations, the Congressional Budget Office “… identified 1,068 authorizations of appropriations – stemming from 274 laws – that expired before the beginning of the fiscal year 2022.”

House of Representatives Rule XXI provides that “[A]n appropriation may not be reported in a general appropriation bill…for an expenditure not previously authorized by law…”

The laws passed by Congress generally fall into two categories under its regular order:

  1. Laws are authorized for a set period of time, for example, one, three, or five years. At the end of the authorized period, Congress must reauthorize the law for it to continue being funded.
  2. Laws that have no expiration date and for which Congress mandates continuous funding, for example, Social Security. These are referred to as mandatory spending laws or entitlements.

This distinction is significant when attempting to reduce spending. Simply, when the authorization period of a discretionary law expires, Congress has the opportunity to let it lapse, amend it, or reauthorize it. Congress can hold oversight hearings to examine the law’s effectiveness. This oversight provides Congress control over the legislative process and, by extension, the regulatory process, since regulations are issued to implement the laws enacted by Congress.  More laws mean more regulation. Fewer laws mean fewer regulations.

Unfortunately, every year, Congress avoids the review of hundreds of expired laws. In fact, between 25% -33% of all laws do not have congressional authorizations. Moreover, since Congress rarely passes all twelve appropriation bills by the October 1 deadline, it merely bundles hundreds of billions of dollars into a Continuing Resolution or Omnibus appropriation to fund hundreds of disparate laws. Since the fiscal year 1997, the budget deadline has never been met. Instead, Congress enacts Continuing Resolutions that fund the government at the prior years’ funding level. Between FY 1998 and 2022, Congress passed 125 Continuing Resolutions.

Within this mindless appropriations process, however, Congress performs one act that debases the legislative process, while sanctioning the perpetual growth of the bureaucracy. This mindless act is a parliamentary procedure that allows the House to waive its Rule XXI by deeming hundreds of unauthorized laws to be authorized for purposes of making appropriations. This simple waiver gives life to hundreds of laws that have expired and for which Congress did not have sufficient interest to determine the continued need for the law. (The Senate does not have a similar prohibition.)

The House’s frequent use of waivers is contrary to almost two centuries of legislative practice for funding the implementation of laws. While there was always an informal process that required Congress first pass a substantive law and then appropriate monies to implement the law, Congress formalized this process in 1837, when the House of Representatives provided by a rule that “no appropriation shall be reported in such general appropriations bills, or be in order as an amendment thereto, for any expenditure not previously authorized by law.”   

This prohibition continues today and it can be enforced by a point of order. Unfortunately, Congress has enacted mechanisms that allow itself to waive the rule by suspension, unanimous consent, or in the House by a special rule, which usually deems the unauthorized laws to be waived.

By circumventing its own rules, Congress avoids having to make the difficult decisions on which laws should continue in effect. It merely allows all laws to remain in effect. Though this charade is an easy way for Congress to avoid doing its job, it is a prime reason why Congress has institutionalized the growth of government.

CBO started collecting data on the funding of unauthorized appropriations as early as 1975 and prepared written reports to Congress starting in 1986. Notwithstanding the amount of excellent information collected and produced by the CBO, Congress has not acted on it even though the amount of funding for unauthorized appropriations increases every year. The tens of billions of dollars that could be saved is staggering. In FY 2015 Congress appropriated about $294 billion for programs whose authorizations of appropriations have expired. In FY 2020 Congress appropriated about $332 billion for programs whose authorizations of appropriations have expired. In FY 2021 Congress has appropriated about $432 billion for 1,068 programs whose authorizations of appropriations have expired.

For Congress to reclaim its lawmaking powers, it does not need to shut down the entire government. All it needs is for a few brave members to stand up and force votes to deny funding for programs that have not been reauthorized. Members of Congress have a choice to review each law and reauthorize, amend, or terminate it, or publicly waive the rules for expediency. Congress consistently chooses the cowardly way of “leadership.”

If members of Congress started raising points of order to stop the funding of expired laws or voted against the waiving of regular order, Congress would begin to assume responsibility for the legislative process by examining every law as each authorization period expires. This process will require Congress to examine what it has enacted and how each law impacts the American people. As this process moves forward, Congress will reduce its budget deficits by tens of billions annually, simply by pruning laws that do not achieve their purpose, or for which the costs greatly outweigh the benefits.

Congress is responsible to the American people. It now needs to act responsibly.