How GOP Congress Hides More Spending

Budget gimmicks let GOP lawmakers boost spending on highways and medical research.

No new taxes needed.

Photographer: Daniel Acker/Bloomberg

A Catch of the Day to Jonathan Chait for an excellent analysis of the Republican approach to taxing and spending:

The Republican Congress follows certain budgetary principles that have been in place long enough that they have faded into the backdrop of the political debate and are not the subject of open debate, or even acknowledgement, but taken as a given. The rules hold that if Congress votes to cut taxes or to increase military spending, it can disregard the costs. (Though military-spending hikes have to be added year by year, to preserve some accounting fiction that they are not permanent.) Domestic spending, on the other hand, can only be increased if Congress "pays for it" with offsetting measures.

As Chait adds, since Republicans always oppose tax increases, those domestic spending offsets require cuts in other parts of the budget. And since there are few domestic programs that both Republicans and Democrats want to shrink, it's hard to find new funding for any program in a time of divided government, when both parties have to reach agreement.

In any case, there aren't all that many places for Republicans to go for offsetting cuts that both please their various constituencies and avoid making them look (correctly or not) like heartless monsters. As we know, even many Republicans in safe districts don't want to slash spending on Social Security or Medicare, which is where most of the money is.

They get around this, when necessary, with budget gimmicks showing paper savings or revenues somewhere else in the budget. In fact, these "savings" often raise the long-term federal budget deficit. As Chait details, Congress is doing exactly that to justify increased funds for medical research and highways.  

Add it up and what you get is the Republican War on Budgeting. Normally, budgets are about total revenues versus total spending. For many conservative Republicans, however, the whole notion of trade-offs and offsets -- the core of real budgeting -- is anathema.

In their view, if nothing at all should be spent on something, then any spending adds to the "deficit" even if it is fully paid for because it exceeds ideal spending. When a proposed spending increase gets closer to their ideal level, however -- as with medical research and highway funding -- they don't think of it as increasing the deficit. Seen in this way, the whole notion of offsets or paying for spending doesn't make sense. 

Of course, this type of "budgeting" is likely to produce sky-high actual federal budget deficits – as it did when conservative Republicans got their way in fiscal policy at the beginning of the Ronald Reagan and George W. Bush administrations.  

For those of us who don't oppose (real) deficits, this isn't so bad a result. On the other hand, deliberate and reality-based fiscal planning is generally a good idea, and it's hard to do when you reject the whole notion, at least in practice, that revenues have anything to do with spending.

Nice catch!


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