One of the clichés of American political discourse is that Congress has the "power of the purse." What this is supposed to mean is that it is Congress which has to authorize and appropriate all spending by the federal government. In the course of passing these various spending bills, Congress is supposed to review and revise spending priorities; programs that are failing are to be changed or removed, while successful programs are to be expanded if necessary. In fact, this was how America's government functioned for over two centuries, but that is no longer true. The change in Congressional control of spending began as a simple modification to federal budgetary practices that was put in place over 25 years ago in order to deal with inflation and to provide cover for the Democrats who controlled Congress at the time as they increased spending each year. The new practice was called "baseline budgeting" and it called for federal spending to increase by a small percentage each year to cover the cost of inflation. Right now, that increase is roughly 7% per year. What this means is that if spending for a particular jobs training program is 100 million dollars in 2013, then the budgeted amount for 2014 will be 107 million dollars. If Congress approves spending that 107 million dollars, it is reported as no increase in spending. On the other hand, were Congress to increase spending on that program from 100 million to only 105 million dollars, it would be reported as a "cut" in federal spending of 2 million dollars. The effect of baseline budgeting is to increase spending each year without anyone having to admit that Congress is actually increasing expenditures.
The use of baseline budgeting alone did not take the power of the purse from Congress, however. That required the addition of another budget practice called a "continuing resolution". During the years when Congress actually passed authorizations and appropriations measures, there were times when the fiscal year would begin without the spending measures being in place yet. The government needed funds to function, so Congress came up with a method for continuing to fund the government while it passed the appropriate legislation needed to allocate funds. This method is called a continuing resolution. In simple terms, a continuing resolution authorized the federal government to continue to spend money as it was allocated in the current budget. But remember that the current budget has the increases from baseline budgeting already in the figures. So, if we go back to that program we discussed above on which 100 million was spent in 2013, if a continuing resolution were passed by Congress, the government would spend the budgeted amount (107 million dollars) until an appropriation bill replaced the continuing resolution.
Then came the mischief. Eight years ago, the Democrats took control of both houses of Congress. At that time, the number of spending bills that were passed by Congress fell dramatically. Once president Obama took office in 2009, Congress stopped passing essentially all spending measures. Most of the government was funded instead by continuing resolutions passed by Congress. Then, once the Republicans took the House in 2010, the Democrat controlled Senate just stopped considering spending measures. Senator Reid and the other Democrat leaders knew that they could just keep passing continuing resolutions and watch spending increase by 7% each year. They also knew that by using continuing resolutions, they could keep the House from reducing spending for particularly wasteful programs. Even programs that were failures would continue to be funded at the level of the prior year plus 7%. As a result, the government has been funded by continuing resolution for the last six years.
Consider the impact that this practice has had on America's government. For the last six years, there has been essentially no oversight of individual federal programs by Congress. No spending cuts could be passed absent extraordinary battles in Congress. Remember "sequestration"? That was a method for cutting spending that basically amounted to reducing the automatic increases in the baseline budget by about 1.5%. In other words, instead of increasing by 7%, the spending only went up by 5.5%. Of course, in the media, this was portrayed as a major "cut" in spending. But remember also that the cut was across the board. Programs that worked well were not spared from cuts, while programs that never worked were still funded with only a smaller increase. Then there are the periodic "government shutdowns". Because spending was approved through a continuing resolution, all government spending was included in each battle. The Democrats held the entire government hostage and left the GOP with only the choice of shutting off all spending if anything were to be cut.
The victory by the Republicans in taking control of the Senate provides Congress with a chance to restore its power of the purse. The new Republican leadership ought to announce that it will no longer use continuing resolutions for the entire government. The old practice of authorizations and appropriations should be brought back so that changes can be made to individual programs as they are needed. Further, each department should be the subject of a separate continuing resolution should one be needed. The expirations of those resolutions should be staggered so that we no longer face the shutdown of the entire government each time a budget battle breaks out on Capitol Hill.
Most important, the Congress should end the practice of baseline budgeting. Spending in each year ought to start with the actual amount spent the year previously. No more automatic spending increases ought to be tolerated. Congress should be honest about what it spends. This last item would bring a major battle with the Democrats, but it is one well worth fighting. Inflation now runs at roughly 1% per year. There is no reason why spending should automatically increase by 7%. Any increase should be voted on and approved by Congress.
These budgetary practices are little known and even less discussed around the country. Nevertheless, were Congress to actually end baseline budgeting and the use of continuing resolutions that cover the spending for the entire government, it would be a major shift in power back to Congress and a major benefit for the American people.
The use of baseline budgeting alone did not take the power of the purse from Congress, however. That required the addition of another budget practice called a "continuing resolution". During the years when Congress actually passed authorizations and appropriations measures, there were times when the fiscal year would begin without the spending measures being in place yet. The government needed funds to function, so Congress came up with a method for continuing to fund the government while it passed the appropriate legislation needed to allocate funds. This method is called a continuing resolution. In simple terms, a continuing resolution authorized the federal government to continue to spend money as it was allocated in the current budget. But remember that the current budget has the increases from baseline budgeting already in the figures. So, if we go back to that program we discussed above on which 100 million was spent in 2013, if a continuing resolution were passed by Congress, the government would spend the budgeted amount (107 million dollars) until an appropriation bill replaced the continuing resolution.
Then came the mischief. Eight years ago, the Democrats took control of both houses of Congress. At that time, the number of spending bills that were passed by Congress fell dramatically. Once president Obama took office in 2009, Congress stopped passing essentially all spending measures. Most of the government was funded instead by continuing resolutions passed by Congress. Then, once the Republicans took the House in 2010, the Democrat controlled Senate just stopped considering spending measures. Senator Reid and the other Democrat leaders knew that they could just keep passing continuing resolutions and watch spending increase by 7% each year. They also knew that by using continuing resolutions, they could keep the House from reducing spending for particularly wasteful programs. Even programs that were failures would continue to be funded at the level of the prior year plus 7%. As a result, the government has been funded by continuing resolution for the last six years.
Consider the impact that this practice has had on America's government. For the last six years, there has been essentially no oversight of individual federal programs by Congress. No spending cuts could be passed absent extraordinary battles in Congress. Remember "sequestration"? That was a method for cutting spending that basically amounted to reducing the automatic increases in the baseline budget by about 1.5%. In other words, instead of increasing by 7%, the spending only went up by 5.5%. Of course, in the media, this was portrayed as a major "cut" in spending. But remember also that the cut was across the board. Programs that worked well were not spared from cuts, while programs that never worked were still funded with only a smaller increase. Then there are the periodic "government shutdowns". Because spending was approved through a continuing resolution, all government spending was included in each battle. The Democrats held the entire government hostage and left the GOP with only the choice of shutting off all spending if anything were to be cut.
The victory by the Republicans in taking control of the Senate provides Congress with a chance to restore its power of the purse. The new Republican leadership ought to announce that it will no longer use continuing resolutions for the entire government. The old practice of authorizations and appropriations should be brought back so that changes can be made to individual programs as they are needed. Further, each department should be the subject of a separate continuing resolution should one be needed. The expirations of those resolutions should be staggered so that we no longer face the shutdown of the entire government each time a budget battle breaks out on Capitol Hill.
Most important, the Congress should end the practice of baseline budgeting. Spending in each year ought to start with the actual amount spent the year previously. No more automatic spending increases ought to be tolerated. Congress should be honest about what it spends. This last item would bring a major battle with the Democrats, but it is one well worth fighting. Inflation now runs at roughly 1% per year. There is no reason why spending should automatically increase by 7%. Any increase should be voted on and approved by Congress.
These budgetary practices are little known and even less discussed around the country. Nevertheless, were Congress to actually end baseline budgeting and the use of continuing resolutions that cover the spending for the entire government, it would be a major shift in power back to Congress and a major benefit for the American people.
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