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Press Release

Red Ink Rising


Even before the appropriators have their way with the spending bills for 2003, new studies suggest that the deficit for 2002 may exceed $100 billion. With revenues coming in lower than forecasts and congressional spending advancing at a record pace, taxpayers need to take Congress’ calls for fiscal responsibility with a grain of salt. These days, fiscal responsibility appears to mean a secure stream of tax revenues, not a more prudent approach to federal spending.

This year’s budget battle promises the best of partisan fireworks. For the first time since the Budget Act passed in 1974, the Senate may not pass a budget. While Senate Budget Committee has done its work and developed a budget, Senate Majority Leader Tom Daschle (D-S.D.) is doing his best to avoid bringing it to a vote by the full Senate. Instead, Democrats have resorted to easy attacks on the President’s budget and Republican spending programs and priorities. Actually adopting a budget would make Democrats vulnerable to the same criticisms, and would mean some tough votes for Democrats, which Daschle hopes to avoid. To add substance to the call for fiscal responsibility, Democrats would be required to vote for curtailing popular Bush tax cuts or cutting spending on favored programs - neither of which would please constituents.

The lack of a Senate budget has ramifications beyond political theater. Without a budget in place, it is much more difficult to control debates about spending in the Senate. Traditionally, both houses of Congress adopt a budget before unleashing the appropriators to fund federal programs. The budget provides guidelines and limits on what the appropriators can spend. If Daschle is unwilling to adopt a budget for the Senate, the temptation to lard up the 13 appropriations bills may be irresistible. And with the bills open to amendments on the floor, any remnants of true fiscal discipline would be lost. While Congress may make the laws of the land, it also spends our tax dollars; without rules to control this process, taxpayers should be wary.

And it’s not as if Republicans have been shy about spending. The Republican-controlled 106th Congress goes down in the record books as the biggest spender (as measured by real percentage increase) since the 1970s. In 2001 Congress exceeded its budget caps by $100 billion and outspent President Clinton’s initial budget request. The economic slowdown and return of deficits has not slowed the urge to spend. The Bush administration proposed a budget of $2.1 trillion, with $773 billion in discretionary spending. Under the guise of a wartime budget, spending has increased across the board, including areas where representatives would be hard-pressed to make the link from the program to the war effort.

For their part, Democrats have decried the President’s budget as “fiscally irresponsible.” Sen. Kennedy (D-Mass.) has gone further, proposing to repeal the Bush tax cut. Yet the bulk of the Bush tax cuts have yet to be implemented. And analysis by the Congressional Budget Office suggests that the return to deficit spending had far more to do with the economic downturn than the Bush tax cut. In fact, more than 70 percent of the new deficit can be accounted for by economic and technical factors that slowed the growth of revenues. The tax cut, on the other hand, was responsible for only 11 percent of the shift.

Yet these calls for fiscal responsibility reveal a perverse notion of budgeting. Apparently, for big spenders in Congress, fiscal responsibility means keeping Washington’s coffers filled, so that federal spending can continue unabated. Little mention is made of rooting out waste, fraud, and abuse in government spending, or eliminating programs and projects that fail to achieve their goals year after year. Lost in the debate is the fact that last year Congress approved more than 7,800 earmarks that will pump up spending by more than $15 billion, according to Ronald Utt and Christopher Summers of the Heritage Foundation.

Nor is it reassuring that while Daschle is reluctant to move forward with a budget, he has been an eager champion of a new farm bill that would spend more than $170 billion over the next ten years. And the Senate’s energy bill, while stripped of many substantive policies, is replete with subsidies, corporate welfare, and a new ethanol mandate that will surely please Daschle’s home state of South Dakota. The fact of the matter is that Congress is rife with spending, even while fully recognizing the return to deficits.

The political debate in Washington has coalesced around the need for fiscal responsibility. While not a bad topic to address, it is important to set the terms of debate. Fiscal responsibility means more than shoring up the flow of tax dollars to Washington. It means adopting a degree of prudence and living within a budget. If the Democrats are concerned about fiscal responsibility, they need to put it in writing. Adopt a budget proposal to guide the spending debates that are looming in Congress. And let Americans keep their well-deserved tax cuts while looking for ways to trim the fat from a $2 trillion budget.