Congress Reconsiders Spending Caps in Long-Term Budget Deal

Yesterday, Congress passed a funding bill just before the start of the new fiscal year, averting a repeat of the 2013 government shutdown and buying another two and a half months to negotiate a long-term budget deal lasting beyond that.

The temporary fix continues a trend of budget dysfunction in Washington, where it's been five years since any of the regular appropriations bills have passed and 18 since a budget was enacted without use of a Continuing Resolution. Today also marks the 200th day that the debt has been frozen at $18.1 trillion, since the Treasury began resorting to "extraordinary" accounting measures in March to adhere to the statutory debt ceiling.

As Congress looks to resolve the ongoing budget fight, some Members have already discussed amending not just the debt ceiling, but also the spending caps enacted in 2011. We have previously covered how much those caps have saved taxpayers up to this point -- but now let's look ahead and see what Washington could have spent without them, compared to what it would if they remain.

The caps are set to last through 2021. The table below shows the spending and deficits CBO projected under the President's budget just before the caps were enacted, compared to its most recent estimate of those amounts with the caps in place. (Note: dollar amounts are in billions.) 


Fiscal YearBaseline OutlaysBaseline DeficitOutlays Under President's Pre-BCA BudgetDeficit Under President's Pre-BCA BudgetOutlay ReductionDeficit Reduction
Total    -$3,453-$2,168


In other words, the government will spend $3.45 trillion less than it would if the Administration's budget had been enacted without the caps. Deficits will be lower over the next six years to the tune of $2.17 trillion, a savings of $6,799 per person and $18,753 per household.

The caps enacted in 2011 have significantly slowed spending and deficits, and will continue to do so in the future -- if Congress decides to keep them.