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Issue Analysis

Busting the Budget: How Congress Spends Over and Around the Budget Control Act

As Congress nears another deadline this Friday for funding the government, a lot is on the table in terms of what could be included in a deal to increase spending across the board. Whether Congress is forced into a partial government shutdown or it chooses to bunt the issue another few weeks or so with the fourth continuing resolution of this fiscal year, the spending issue will have to be addressed in the near future.

Much of this is contingent on the amount by which Congress agrees to bust the spending caps set by the Budget Control Act. Passed in 2011, the Budget Control Act (BCA) was a compromise passed by a Republican-controlled House and Democrat-controlled Senate, signed by Democratic then-President Barack Obama.

Forced by heavy Republican pressure to fight against another debt limit increase absent any real spending restraints, the BCA was one of the largest victory of Republicans in Congress pertaining to fiscal issues, alongside last month’s passage of tax reform.

The BCA put caps on discretionary spending to drastically slow the growth rate of federal spending, and if adhered to, would represent meaningful reform. However, the BCA is unfortunately continually undermined by the legislative body that designed it, by “busting” the spending caps every year, as well as by using budget “gimmicks” to increase off-budget spending and falsify numbers to create illusions of savings within the budget.

What will be the fourth spending deal to bust the BCA spending caps is rumored to be the largest deal yet, potentially busting the discretionary caps by more than $200 billion over two years. This deal is nearly three and four times larger than the budget caps deals struck in 2015 and 2013, respectively. Combined with potential additional riders onto this deal, the new spending could total over $300 billion.

Reckless spending has become a trend of Congress, with defense hawks advocating for more defense spending, and Democrats demanding parity for non-defense spending. A larger problem, however, lies in the portion of the budget that the BCA caps almost entirely do not touch: mandatory spending.

Outlined in this month’s issue brief, FreedomWorks explores the history behind as well as the process and effects of the Budget Control Act, where its strengths and weaknesses lie, and what might be learned from it and other approaches to implement truly effective spending controls to hold Congress fiscally responsible when spending taxpayer money.

Busting the Budget: How Congress Spends Over and Around the Budget Control Act