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Table 1. The Largest Spending Cut Bills Introduced During 108th Congress | ||
|
Bill Number |
Title |
Amount of Reduction |
|
House | ||
|
H.R. 1789 |
Crane Tithe Tax Act of 2003 |
36.5 |
|
H.R. 3060 |
Tax Simplification Act of 2003 |
36.5 |
|
H.R. 3986 |
To make 5% across-the-board rescissions in non-defense, non-homeland-security discretionary spending for Fiscal Year 2005. |
20.0 |
|
H.R. 25 |
Fair Tax Act of 2003 |
9.0 |
|
H.R. 3985 |
To make 2% across-the-board rescissions in non-defense, non-homeland-security discretionary spending for Fiscal Year 2005. |
8.0 |
|
Senate | ||
|
S. 907 |
Flat Tax Act of 2003 |
36.5 |
|
S. 1040 |
Tax Simplification Act of 2003 |
36.5 |
|
S. 1493 |
Fair Tax Act of 2003 |
9.0 |
|
S. 607 |
HEALTH (Help Efficient, Accessible, Low-Cost, Timely Healthcare) Act of 2003 |
0.9 |
|
S. 2083 |
Bipartisan Patient Protection Act of 2004 |
0.9 |
|
Source: National Taxpayers Union Foundation, BillTally Tracking System, 108th Congress. | ||
During the 1st Session of the 108th Congress, the House considered 16 floor amendments that represented $13.8 billion in potential savings. The bulk of the cuts came from reductions in funding for the wars in Iraq and Afghanistan. The Senate voted on six amendments totaling $40.3 billion in cuts. Each chamber would subsequently adopt a single spending cut amendment. The House passed an amendment to cut the U.S. contribution to the U.N. population fund by $25 million, and the Senate agreed to language that converted a portion of Iraqi reconstruction funding from a grant to a loan.
Unfortunately for taxpayers, the passage of these amendments was an anomaly and did not represent the beginning of a cost-cutting trend. In 2004, the House again debated 16 spending cuts, the total dollar value of which slid to $8.0 billion. The House did pass three of the amendments for $16 million in savings. The Senate considered just one spending cut worth $1.1 billion. Tables 2 and 3 detail the spending cuts that were considered in each chamber.
|
Table 2. Spending Cut Amendments Offered in the House During the 108th Congress | ||
|
Vote Number |
Description |
Amount of Reduction |
|
1st Session, 2003 | ||
|
105 |
Eliminate assistance to Turkey |
1,000 |
|
106 |
Reduce assistance to Colombia |
27 |
|
138 |
Uranium mining |
10 |
|
143 |
Coal leasing limitations |
4 |
|
356 |
1% reduction in agricultural appropriations |
170 |
|
362 |
U.N. Population Fund |
25 |
|
427 |
1% reduction in foreign operations appropriations |
171 |
|
452 |
Veterans prosthetic research offset |
7 |
|
458 |
Disaster relief supplemental offset |
984 |
|
479 |
DC school vouchers |
10 |
|
480 |
1% reduction in DC appropriations |
5 |
|
481 |
1% reduction in transportation appropriations |
893 |
|
548 |
Iraq relief and reconstruction |
250 |
|
551 |
Iraq oil importation |
900 |
|
553 |
50% reduction in Iraq reconstruction aid |
9,325 |
|
556 |
Iraq and Afghanistan relief |
30 |
|
2nd Session, 2004 | ||
|
203 |
Funding for nuclear bunker buster bombs |
8 |
|
249 |
Reduce NEA funding |
37 |
|
324 |
1% reduction in energy & water appropriations |
280 |
|
328 |
SBA funding |
7 |
|
331 |
Eliminate redesign of short-form only census |
174 |
|
342 |
Reduce funding for the U.N. |
20 |
|
344 |
1% reduction in Commerce, Justice, State appropriations |
398 |
|
360 |
Reduce legislative branch appropriations |
27 |
|
363 |
Sudden oak death offset |
5 |
|
380 |
Reduction in World Bank funding |
69 |
|
382 |
Global AIDS funding |
120 |
|
398 |
Reduction in DC appropriations |
6 |
|
427 |
LIHEAP funding offset |
4 |
|
428 |
Reduction in Labor/HHS appropriations |
1,425 |
|
455 |
1% reduction in transportation appropriations |
719 |
|
500 |
Offset emergency supplemental |
4,750 |
|
Total |
21,860 | |
|
Source: National Taxpayers Union Foundation, VoteTally Report, 108th Congress. | ||
|
Table 3. Spending Cut Amendments Offered in the Senate During the 108th Congress | ||
|
Vote Number |
Description |
Amount of Reduction |
|
1st Session, 2003 | ||
|
272 |
AmeriCorps funding |
100 |
|
362 |
Bureau of Indian Affairs reorganization |
16 |
|
371 |
Strike Iraqi reconstruction funding |
15,200 |
|
380 |
Require Iraqi oil to finance reconstruction |
20,000 |
|
389 |
Convert reconstruction aid to loans* |
5,000 |
|
406 |
Eliminate Congressional pay raises |
2 |
|
2nd Session, 2004 | ||
|
013 |
Reduce transportation funding |
1,114 |
|
Total |
41,432 | |
|
* The amendment, sponsored by Senator Evan Bayh (D-IN), would have converted $10 billion in aid to loans, which would require repayment unless the President certified that other nations had forgiven significant portions of Iraq's outstanding debt. If other countries granted debt forgiveness, the loans would be converted back to a grant. Given the uncertainty of repayment or of debt forgiveness by foreign lenders, NTUF provided for $5 billion in cuts rather than the entire $10 billion. Source: National Taxpayers Union Foundation, VoteTally Report, 108th Congress. | ||
Given Congress's failure to seize these spending cut opportunities, it is not surprising that spending agendas have skyrocketed in the last few years and that no Member of Congress has been able to achieve a voting agenda that would reduce discretionary outlays. Chart 1 shows a steep decline in the number of Members whose votes would cut spending.
During the 105th Congress, the average Representative voted for $61.0 billion in new spending and supported $40.2 billion in spending cuts, for a net spending agenda of $20.8 billion. In contrast, the average Member of the House in the 108th Congress voted for $394.2 billion in new spending, 546 percent more than in the 105th, while support for spending cuts fell nearly 82 percent to $7.3 billion. Table 4 shows the steady move away from spending cuts in the House over the past eight years.
|
Table 4. Comparison of House Averages by Congress | ||||
|
Congress |
Discretionary Increases |
Discretionary Reductions |
Net Discretionary Spending |
Net Discretionary + Mandatory Spending |
|
105th |
61.0 |
40.2 |
20.8 |
121.8 |
|
106th |
148.4 |
11.2 |
137.2 |
255.2 |
|
107th |
196.2 |
3.9 |
192.3 |
363.3 |
|
108th |
394.2 |
7.3 |
386.9 |
524.9 |
|
Note: Totals may not add due to rounding. Source: National Taxpayers Union Foundation, VoteTally Report, 108th Congress. | ||||
The House is not alone in its ever-increasing desire for more spending. The average Senator voted for $79.7 billion in new spending during the 105th Congress. That figure ballooned to $485.3 billion, an increase of 509 percent, during the 108th Congress. Again, the dearth of spending cuts has led net agendas to increase substantially in the Senate – albeit at a slower rate than in the House. In this past Congress, the average Senator's net discretionary total was $471.0 billion, an increase of 873 percent versus the 105th Congress. The average Senate agenda was $256.9 billion in the 107th Congress, an increase of 83 percent compared to the 105th. Table 5 details changes in the Senate over the past four Congresses.
|
Table 5. Comparison of Senate Averages by Congress | ||||
|
Congress |
Discretionary Increases |
Discretionary Reductions |
Net Discretionary Spending |
Net Discretionary + Mandatory Spending |
|
105th |
79.7 |
31.4 |
48.4 |
149.4 |
|
106th |
194.8 |
5.3 |
189.4 |
307.5 |
|
107th |
258.5 |
1.5 |
256.9 |
427.9 |
|
108th |
485.3 |
14.3 |
471.0 |
609.0 |
|
Note: Totals may not add due to rounding. Source: National Taxpayers Union Foundation, VoteTally Report, 108th Congress. | ||||
Tables 6 and 7 show that a bipartisan consensus to spend now exists in both chambers. Significant differences only seemed to appear among Senate Democrats and Republicans. Yet, even in this case, the "low" party's average nearly hit half a trillion dollars.
|
Table 6. Comparison of House Party Averages by Congress | ||||
|
Congress |
Discretionary Increases |
Discretionary Reductions |
Net Discretionary Spending |
Net Discretionary + Mandatory Spending |
|
Democrats | ||||
|
105th |
62.3 |
37.7 |
24.6 |
125.6 |
|
106th |
138.1 |
7.5 |
130.6 |
248.6 |
|
107th |
185.5 |
1.8 |
183.7 |
354.7 |
|
108th |
405.7 |
8.7 |
397.0 |
535.0 |
|
Republicans | ||||
|
105th |
59.8 |
42.2 |
17.2 |
118.2 |
|
106th |
158.3 |
14.6 |
143.7 |
261.7 |
|
107th |
206.4 |
5.9 |
200.5 |
371.5 |
|
108th |
384.2 |
6.1 |
378.1 |
516.1 |
|
Note: Totals may not add due to rounding. Independents are excluded from party averages. Source: National Taxpayers Union Foundation, VoteTally Report, 108th Congress. | ||||
|
Table 7. Comparison of Senate Party Averages by Congress | ||||
|
Congress |
Discretionary Increases |
Discretionary Reductions |
Net Discretionary Spending |
Net Discretionary + Mandatory Spending |
|
Democrats | ||||
|
105th |
91.8 |
33.1 |
58.7 |
159.7 |
|
106th |
226.3 |
4.2 |
222.1 |
340.2 |
|
107th |
300.2 |
1.0 |
299.2 |
470.2 |
|
108th |
627.3 |
28.0 |
599.3 |
737.3 |
|
Republicans | ||||
|
105th |
69.9 |
29.9 |
40.0 |
141.0 |
|
106th |
168.1 |
6.3 |
161.8 |
279.8 |
|
107th |
215.1 |
2.0 |
213.1 |
384.1 |
|
108th |
354.9 |
1.6 |
353.3 |
491.3 |
|
Note: Totals may not add due to rounding. Independents are excluded from party averages. Source: National Taxpayers Union Foundation, VoteTally Report, 108th Congress. | ||||
C. The Demise of Budget Reform
The lack of spending restraint and budgetary discipline in the 1st Session of the 108th Congress led to an impasse between the House and Senate during the 2nd Session. Although the budget resolution is non-binding, a reconciled budget that has passed both chambers reduces the number of procedural obstacles for subsequent spending and tax bills. The reconciliation process is extremely useful when legislation is brought before the Senate, where 60 votes are needed to waive various budgetary rules to extend tax cuts.
Motivated by the impasse, a handful of Republicans in the House led an effort to reform the budget process. House Budget Committee Chairman Jim Nussle (R-IA) brought H.R. 4663, the Spending Control Act of 2004, to the House floor for debate. The bill proposed to:
Not surprisingly, the bill was defeated. The vote was 146 in favor and 268 opposed.[7] The Wall Street Journal Editorial Board commented on the outcome of the debate by writing: "Once upon a time, in a Congress far, far away, Republicans believed in smaller government. But you sure wouldn't know it from last Friday's budget-reform fiasco on the House floor."[8]
While the legislation failed to gain any support from Democrats, it did not fare well among Republicans either. The ranking Democrat on the Budget Committee John M. Spratt, Jr. of South Carolina even took time to ridicule Republicans saying, "Our Republican friends control the House, they control the Senate, they control the White House. Why can't they control spending?"[9] The dismay expressed by the Wall Street Journal Editorial Board is explained by the 72 Republican votes against the measure – including almost every Republican member of the powerful House Appropriations Committee. Of the 35 Republican Appropriations Committee members present for the vote, only three backed the measure. The defeat of the bill provides some insight into just how difficult it is to advance a pro-taxpayer, anti-spending agenda in Congress.
D. Not Missing a Rhetorical Beat
Even though the budgetary rhetoric of the Presidential campaign could have been used as political cover to cut spending or reform the budget process in 2004, Congress decided against exercising the spending cut options that were available. This did not, however, preclude Members from taking the floor and lamenting the lack of fiscal responsibility in Washington. Table 8 contains the results of an electronic search of the Congressional Record that shows Members raised the din of their oratory even as they voted for more spending and rejected spending cut amendments. Since net spending increased, on average, by 101 percent in the House and by 83 percent in the Senate from the 107th Congress, it is reasonable to conclude that these frequent calls for budgetary austerity fell on deaf ears.
|
Table 8. Calls for Fiscal Discipline and Responsibility | ||
|
Search Term |
107th Congress |
108th Congress |
|
"Fiscally Responsible" |
517 |
864 |
|
"Fiscal Discipline" |
519 |
511 |
|
"Fiscal Responsibility" |
556 |
966 |
|
"Fiscal Irresponsibility" |
107 |
162 |
|
"Fiscally Irresponsible" |
96 |
237 |
|
Total |
1,795 |
2,740 |
|
Source: National Taxpayers Union Foundation, VoteTally Report, 108th Congress. | ||
E. Opportunities for the Future
Many of Washington's newest deficit hawks argue that tax cuts have wiped out projected budget surpluses and put a stranglehold on revenues. They see the opportunity to repeal the tax cuts of 2001 and 2003 as the way to restore fiscal responsibility and increase spending on essential government programs. These economically beneficial tax cuts remain vulnerable to repeal because of increased spending.
The current deficits, if not corrected quickly, will mean higher taxes on Americans than would have otherwise been the case, and the deficits will prevent Congress from dealing with the nation's looming entitlement crisis. As Eugene Steuerle of the Urban Institute told The Wall Street Journal, "If you want the efficiency of smaller government, you have to have smaller expenditures and smaller taxes at the same time."[10] By failing to bring down expenditures, the President and Congress are putting taxpayers on the road to higher taxes and lower economic growth in the future. Congressman Jeb Hensarling (R-TX) has observed correctly that, "The deficit is a symptom; spending is the disease. And we have to do something about the disease."[11]
In 1997, Congress achieved a measure of budgetary savings by slowing the growth of Medicare and Medicaid. In 2003, Members dramatically expanded Medicare spending by adding a prescription drug benefit to the program. Now, in the 109th Congress, efforts are again under-way to bring entitlement spending back under control. The FY 2006 budget resolution intends to slow the growth of mandatory programs from 5.7 percent to 5.6 percent over the next five years.
While this represents a first step toward restraining spending, policymakers may be forced to consider additional options as well. Adopting the budget process reforms contained in H.R. 4663 would help establish a viable framework for reducing the deficit and preserving tax cuts. Then fiscal conservatives – veterans as well as newcomers – could press for the passage of Constitutional amendments that require a balanced budget and that limit the ability of Congress to raise taxes without a "super-majority" roll call vote. Finally, Congress could pass fundamental tax reform that moves the U.S. from an income-based tax system to a consumption-based tax system. If taxpayers can see – and feel – the burden of government, it will be far easier to permanently control the growth in government spending and provide a platform for long-term economic growth.
III. Conclusion
When Members of Congress had the opportunity to increase spending in 2003, they took it. When Members of Congress had the opportunity to reform the budget process and cut spending in 2004, they passed and wasted the political cover offered by the Presidential election. Taxpayers are left with the hope that Congress will realize the need for true fiscal reform and adopt a pro-taxpayer agenda. If not, the 109th Congress may turn out to be yet another missed opportunity.
Jeff Dircksen
Director of Congressional Analysis
[1] White House press release, "OMB Director Discusses 2005 Budget," http://www.whitehouse.gov/news/releases/2004/02/20040202-4.html, February 2, 2004.
[2] John Kerry, "A Return to Fiscal Responsibility," presented at Georgetown University, April 7, 2004.
[3] This includes votes on H.J. Res. 2, the fiscal year 2003 Omnibus Appropriations bill. Even though the bill completed the funding cycle that began in October 1, 2003, passage of the bill did not occur until 2004 and is therefore included with the other roll call and voice votes from that period.
[4] Members excluded from the data set are House Speaker Dennis Hastert (R-IL); Representatives Frank Ballance (D-NC), Doug Bereuter (R-NE), G. K. Butterfield (D-NC), A. B. "Ben" Chandler (D-KY), Larry Combest (R-TX), Ernie Fletcher (R-KY), Richard Gephardt (D-MO), Porter Goss (R-FL), Stephanie Herseth (D-SD), William Janklow (R-SD), and Randy Neugebauer (R-TX); and, Senators John Edwards (D-NC) and John Kerry (D-MA). Additionally, Congressman Ralph Hall of Texas who was elected to the 108th Congress as a Democrat and who switched parties in early 2004 is counted as a Republican for this report. Congressman Rodney Alexander from Louisiana is counted as a Democrat even though he switched his party registration to Republican in August 2004.
[5] Demian Brady, The 108th Congress: Rising Floodwaters or a Change in the Tide?, National Taxpayers Union Foundation Policy Paper 155, May 5, 2005, p. 3.
[6] Jeff Flake, Congressional Record, p. H5800, June 24, 2003, available online at http://thomas.loc.gov.
[7] See House roll call vote 2004-318.
[8] "Lost GOP Souls," The Wall Street Journal, June 30, 2004, p. A8.
[9] Andrew Taylor, "House Soundly Defeats Conservatives' Bid to Impose New Curbs on Spending," CQ Today, CQ.com, June 25, 2004.
[10] David Wessel, "Bush, Kerry Are Far Apart on How Raising Taxes on 'Rich' Pans Out," The Wall Street Journal, p. A2, August 5, 2004.
[11] Jonathan Weisman, "Budget Impasse Reflects GOP Schism," The Washington Post, p. A8, June 30, 2004.