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Blog

End Federal Agencies' Slush Funds

06/20/2016

Last week, Rep. Gary Palmer (R-Ala.) introduced H.R. 5499, the Agency Accountability Act. Congress provides funds to federal agencies to carry out specified activities through the appropriations process. Too often, these agencies engage in activities that Congress has not authorized and pays for them via fines and fees they collect. This practice is an end run around Congress and the will of the people. Rep. Palmer’s bill would curb this practice, help restore the oversight function of Congress, and send the money garnered by federal agencies through fees to the Treasury instead of allowing those funds to be used indiscriminately.

Article I, Section 8 of the Constitution is clear on the spending power of Congress. It is given the sole authority “To lay and collect Taxes, Duties, Imposts and Excises…” This power of the purse is a function held exclusively by the legislative branch. Americans should be concerned when Congress abdicates its powers and allows unaccountable and unelectable bureaucrats to fund programs Congress has not authorized.

When this happens, federal agencies are creating an environment of secrecy through taxpayer subsidized slush-funds. Because agency funds not appropriated by Congress can elude congressional oversight, Congress knows little about how this money is spent. We do know that, as the Office of Management and Budget reported, in fiscal 2015, total federal spending reached $3.8 trillion, while federal agencies collected an additional $516 billion in user fees alone.

This perfect storm of unaccountability creates conditions ripe for cronyism and market distortion, all at the expense of hardworking Americans. For this reason, Rep. Palmer’s bill aims to bring both increased accountability and transparency to federal spending.

Federal agencies circumventing the will of Congress have long been a problem in Washington. These actions can leave bad precedence in place to be used as in further administrations. For this reason alone, it is vital to constrain federal agencies to only implementing the desired will on Congress.

This focused legislation will reign in federal bureaucrats and stop the murky practice of using fees from taxpayers to fund programs their representatives have not authorized, This transition includes bringing federal entities such as the Consumer Financial Protection Bureau and Financial Stability Oversight Council (FSOC) under appropriate congressional oversight. The FSOC, for example, is a particularly egregious example of the type of out of control bureaucracy Rep. Palmer is trying to rein in. As his colleague Rep. Hensarling (R-Texas) explained when discussing his legislation, the H.R. 3340, the Financial Stability Oversight Council Reform Act, that the

“FSOC has earned bipartisan condemnation for its lack of transparency. Two-thirds of its proceedings are conducted in private. Minutes of those meetings are devoid of any useful substantive information on what was discussed. Even Dennis Kelleher, the CEO of the left-leaning Better Markets, has said “FSOC’s proceedings make the Politburo look open by comparison. At the few open meetings they have, they snap their fingers and it’s over, and they are all scripted. They treat their information as if it were state secrets.”

This type of overreach by agencies fueled by fees and eager to impose their will upon the American people must come to an end. H.R. 5499 can help make that happen. Rep. Palmer’s bill deserves a committee hearing and floor vote. If the House is serious about reclaiming its oversight and being good stewards of the taxpayers’ money, it will pass this bill.

The power to restore Congress's proper and intended role is within its own authority. Rep. Palmer is attempting to contribute to this reclamation through his Agency Accountability Act.