BEYOND THE NUMBERS
As it faces key budget issues this fall, Congress — particularly the Republican majority — has taken different approaches to paying for programs that reflect its policy and ideological preferences rather than consistently apply standard budget rules, as we explain in a new paper.
Traditional budget rules are ideologically neutral. They treat spending and revenues the same way: both a spending increase and a tax cut, measured relative to a baseline, add equally to the deficit. They also treat adherence to the annual statutory caps on defense and non-defense appropriations the same.
In contrast, Congress’s recent approaches to paying, or not paying, for certain policies don’t reflect a coherent application of these budget rules, but rather reflect the majority’s policy and ideological priorities.
- Discretionary caps. Policymakers generally agree that they have to offset the cost of raising the caps on defense and non-defense appropriated programs set by the 2011 Budget Control Act. That’s what they did in 2013 when they raised the caps, and the President has proposed a similar process in his 2016 budget. But, despite this agreement, congressional Republicans are effectively applying this rule only to non-defense appropriations. For defense, they have taken steps to circumvent the caps, relying on a maneuver that they, themselves, previously condemned as a gimmick. This gimmick has the same effect as raising the 2016 cap for defense without offsetting the costs.
- Highways. The House and Senate have adopted special, more stringent rules for funding the Highway Trust Fund. Typically, Congress would only seek to find offsets if legislation increased the cost of the underlying highway program as projected by the Congressional Budget Office. But this year, the special rules would require Congress to find offsets — totaling about $170 billion through 2025 — just to continue highway and transit funding at current levels.
- Tax extenders. In contrast to Congress’s treatment of domestic discretionary and highway funding, there has been no effort in either the House or Senate to offset the cost of continuing these largely business tax breaks that expired at the end of 2014.
Taken together, the varied approaches seem to reflect a view that government spending outside of defense is dubious and should be resisted, while tax cuts and defense spending increases should be encouraged irrespective of how they affect the deficit. Erecting hurdles for needed non-defense spending that defense spending and the tax extenders won’t face could have a significant, and potentially detrimental, effect on the outcome of this fall’s policy debates.