Budget battle House of Representatives

Evan Vucci | AP Photo

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On Tuesday of last week, President Obama released his final budget, the document that outlines his spending and revenue priorities for 2017; it encompasses the overall philosophy of how the government would look if the president were a monarch. This happens every year, and occasionally, Congress will placate the president and go through the motions of circulating the budget by holding hearings and providing analysis.

The President’s budget is an exercise we see year-after-year. Yet this year was a bit unique in the press’s dissatisfaction of Republicans simply ignoring Obama’s final budget. Take a look:

NBC News: Republicans Decline to Hear President’s Budget – “President Obama’s $4.1 trillion dollar budget for the government was formally submitted to Congress today, however, in an unprecedented move, it will not receive so much a a formal hearing from the Republican[s]…”

That tagline is not all that different than titles found in the Washington Post and the Los Angles Times.

Budget Debt Eras

Here’s why the press is wrong:

Reason 1: The President Has No Business Being Involved with the Power of the Purse.

The Constitution specifically, and solely, delegates the nation’s spending prerogatives to Congress:

Article 1, Section 9, Clause 7: No money shall be drawn from the Treasury, but in consequence of Appropriations made by law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.

Consider this analogy: Suppose you’ve had a long, hard week at work. As the week comes to a close, pay-day approaches. Besides what you pay in taxes, the rest is yours to spend; after all, you earned it, you decide how to spend it. But let’s flip this story — suddenly, your kids are having a say on just how you’ll spending your money. In fact, they submit to you an itemized wish list of the foods to buy, the toys they prefer, and a cool, new pair of shoes. 

Insanity, right? Well, this is little different than what the president does with the budget every year.

So when did we begin to care which new “sneakers” the president wants? Well, it all began with World War I. As a consequence of the war, government spending went from $720 million in 1914 to nearly $20 billion by 1919. As you can see from the graph, public debt followed the spending; jumping from 3.5 percent in 1914 to 34 percent only five years later. 

Oddly enough, Congress didn’t feel it could manage the out-of-control spending on its own. They decided that forceful Presidential leadership was needed to help the situation, and in doing so, Congress opted to allow the president to become an agent of the budget. That unraveled with the passage of the National Budget and Accounting Act of 1921.

The National Budget and Accounting Act ushered in the second budget era, which codified the requirement of the executive branch to share in the power of the purse, even if indirectly, by requiring the president to submit an annual budget proposal to Congress. 

In fact, the president’s budget is little more than a spending blue print that outlines a long list, and wide range of, legislative proposals — a total contradiction to what the founding fathers envisioned in a government of checks and balances. In President Washington’s first State of the Union message, he rejected the idea that the president should have a legislative agenda, and simply set forth suggestions that Congress might consider in its deliberations.

The third and final budget era is the one we live in today. Much like the second budget era, today’s federal budget continues to be subject to significant Presidential involvement. This last budget era, however, began in 1974 when Congress attempt to regain its budget authority by passing the Congressional Budget and Impound Control Act of 1974. This law statutorily created the House and Senate Budget Committees. It also set forth the “requirement” that Congress produce a budget. In addition, it created the Congressional Budget Office (CBO). Finally, it codified the federal budget process. 

The Budget Act shifted the power in the federal budget process between the Congress and the executive branch, although still a protracted departure from fully recapturing the power of the purse. This new budget era has been marred in chaos; deficits have ballooned, then disappeared. At times, budgets sail through Congress. But just as often, Congress and the President have clashed, leading to the modern day government shutdown.  

Washington spoke generally about commerce, farming, manufacturing, promoting science and the arts, and implementing the Constitution. He questioned whether he could do anything more: “It rests with [Congress] to decide what measure ought afterward to be adopted for promoting the success of great objects, which I have recommended to their attention.” 

Reason 2: The President’s Budget is a big government, liberal agenda.

In the President’s final budget, we received much of what we always expected. Never-ending deficits, increased levels of spending, new taxes, and the expansion of the social welfare state are the cornerstone of this spending plan.  

The budget reduces defense spending by more than $250 billion, and increases domestic spending by hundreds of billions of dollars, including $312 billion in new infrastructure spending, and $150 billion in additional education spending. 

Overall, the budget increases spending by more than $1.2 trillion. And, it includes $3.4 trillion in new taxes, most of which are levied on upper-income earners; Obama’s play on creating a fissure via class warfare. Furthermore, the President provided $250 billion in new spending for immigration reform, an expansion of Medicaid — particularly $29 billion for the bankrupt island of Puerto Rico. Overall, the president is proposing to spend $4.15 trillion in FY2017, $78 billion more than projected by the Congressional Budget Office (CBO). 

The President’s budget is the antithesis of small government — both numerically and in the spirit of the Constitution. Although the budget law is flawed in its request for the president to produce a budget, there is nothing that prevents Congress from ignoring it — and that’s exactly what Congress should do. The Republicans were right in ignoring the president’s budget and in the quest for smaller government, we should continue to follow this tradition indefinitely.


Ideas Factory with John Gray


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