Debt Digest | House Republicans Want a Raise
Links & Fiscal Facts
Here are this week’s reading links and fiscal facts:
A pay raise for failure to perform. The current Legislative Branch spending bill, approved by the House Appropriations Committee, would give members their first pay increase in nearly 15 years. The bill would provide a 4.6 percent cost of living adjustment or $8,000 raise according to the Congressional Research Service (CRS). Congress has yet to produce a budget resolution outlining spending and revenue priorities for fiscal year 2024 (due April 15th). As Boccia argues here, Congress regularly misses key budget deadlines. One proposal: withholding congressional members’ pay when they fail produce a budget would “encourage members to grapple with the size and scope of federal spending and to put their policy priorities into the context of fiscal realities.”
Fixing the federal budget process. Kurt Couchman of Americans for Prosperity highlights six budget process reforms to reduce deficits, waste, and unproductive brinkmanship. One proposal is to establish a comprehensive budget. Currently, 73 percent of spending is on autopilot. Congress only reviews 27 percent of spending in annual appropriations bills. “Empowering members and committees to manage the entire budget on a regular schedule would help them refine proposals, develop coalitions, and make progress on our nation’s fiscal challenges every year.” Boccia suggests pairing Couchman’s unified budget idea “with a Swiss‐style debt brake to establish and enforce rules toward sustainable federal budgeting.”
Establish an independent fiscal commission to stabilize debt as a share of GDP. The Bipartisan Fiscal Forum (a bipartisan House group dedicated to addressing the nation’s debt) wrote, “We were encouraged by Speaker McCarthy’s recent suggestion to create a fiscal commission focused on exploring and addressing our long-term debt and deficit issues…If designed and executed properly, a commission has the potential to make significant strides toward fiscal sustainability.” As Boccia explains, an effective fiscal commission could be modelled after the Base Realignment and Closure Act (BRAC) process. A well-designed commission would feature independent experts, concrete goals, certified results, fast-track authority, and silent approval. Read more here.
Tax increases won’t save Social Security. The Urban Institute’s Eugene Steuerle writes, “[O]pponents of long-term fixes to Social Security favor tax increases over reductions in benefit growth rates. [S]hort-run fixes in Social Security, given its growing annual excess of benefits over revenues, would leave in place significant imbalances after each short-run period ends. At that point, existing retirees will have become dependent on whatever higher level of benefits have been paid out…when the Social Security trust fund runs out of money at the end of each short-run period, the only short run fix is to find new revenues somewhere.” As Cato’s Adam Michel argues, tax increases are not sufficient to address entitlement programs and fix the debt issue—especially if policymakers hope to only tax the rich.
Upcoming farm bill costs $1.5 trillion over 10 years. “[T]he farm bill will include a diverse lineup of subsidies for farms, food programs, energy, rural programs, forestry, trade, environmental activities, and many other things,” writes Cato’s Chris Edwards. “The official baseline for the farm bill this year is $1.5 trillion over 10 years. Farm bill leaders in Congress think of the baseline as the minimum pot of money they can carve up and handout to dozens of special‐interest groups in coming months. But the federal government is hurtling toward a debt crisis, and business as usual is not acceptable.”
Federal budget is irresponsibly out of balance. In FY 2022, the federal government spent $6.3 trillion after collecting $4.9 trillion in taxes, resulting in a $1.4 trillion deficit and adding to a total of $24.3 trillion in public debt. The graph below shows what a median income family budget would look like if it managed its finances similarly to the federal government. See here for Boccia’s new simplified fact sheet on federal debt.
