Today, House Republicans released the legislative text for the Limit, Save, Grow Act of 2023, which would combat inflation, put the nation’s finances on a more stable path, and provide relief for taxpayers concerned about recent spikes in federal spending. National Taxpayers Union applauds Speaker Kevin McCarthy (R-CA) and the House Republican leadership team for this effort to bring America’s checkbook closer to balance. NTU has supported several planks of the package in the past and will closely monitor developments on this pivotal piece of legislation. If this bill remains substantially similar to the legislative text released today, NTU would strongly support its passage and include this as a significant key vote on the annual NTU Rates Congress scorecard.
Lawmakers should avoid making this bill a “Christmas tree” that includes additional, unrelated proposals. The final bill should be exclusively focused on improving our calamitous fiscal situation. We also believe policymakers should avoid any potential brinkmanship over the debt limit, which could lead to a disastrous default on the nation’s debt obligations.
While NTU is pleased to support the entire package, we are particularly supportive of the following provisions that would help get our nation’s finances back on track.
Division A: Limit Federal Spending
NTU enthusiastically supports a new round of discretionary budget caps, like those enacted in the 2011 Budget Control Act. As NTU has written, in recent years taxpayers’ wallets and the nation’s financial future have been under increased duress. If this spending spree continues, the nation could face truly unsustainable debt burdens. Recent fiscal woes are largely due to an explosion of federal spending under COVID (all-in around $4.6 trillion) and other enacted laws like the bipartisan infrastructure law ($548 billion in new spending) and even supposedly less-costly legislation such as the Inflation Reduction Act (which may turn from a net deficit reduction bill into a net deficit-increasing bill). NTU and our sister organization NTU Foundation have also had a long history of supporting discretionary spending caps, with legislation from Budget Chair Jodey Arrington (R-TX) serving as one recent example.
According to the data, this division of the legislation alone would result in an extraordinary $3.6 trillion in savings to taxpayers, simply by freezing fiscal year (FY) 2024 spending to FY 2022 levels and capping additional spending at only only one percent per year for FYs 2025-2033. Non-defense discretionary spending is up over 40 percent since pre-pandemic 2019 levels (and defense discretionary spending is up 18 percent). With the pandemic national emergency recently terminated by Congress and the Biden administration, it’s time to also declare the spending bonanza over.
Division B: Save Taxpayer Dollars
Title I: Rescission of Unobligated COVID Funding
As mentioned above, the pandemic national emergency is now officially over. However, there are still tens of billions of dollars in “zombie” COVID-era funds that are unobligated and unexpired. Recently, members of Congress have been including these funds as pay-fors in legislation. Before these taxpayer dollars are put to use as a slush fund for unrelated legislation, they should be restored to the U.S. Treasury where they can be used to reduce the deficit.
Title II: Prohibit Unfair Student Loan Giveaways
NTU has strongly opposed President Biden’s plan to cancel the student loan debt of millions of borrowers, which would cost upwards of $400 billion. If this cost were distributed evenly across all taxpayers, it would amount to a burden of approximately $2,500 each. NTU remains concerned about lingering effects a debt forgiveness bonanza would have on future borrowers’ appetite for risk and on universities’ tuition decisions. This cancellation of debt assumes obligations incurred by just a portion of the population and transfers the burden to all taxpayers.
Furthermore, the Biden administration’s use of the COVID-19 national emergency combined with the Higher Education Relief for Students Act of 2003 is a significant and troubling use of executive authority, and involves an extremely expansive interpretation of the underlying law. This could lead to further executive branch usurpation of Congress’ power of the purse. NTU supports this title as it will protect taxpayers from executive branch overreach on debt cancellation and save taxpayers billions of dollars.
Title III: Repeal Market Distorting Green Tax Credits
NTU strongly opposed the passage of the “Inflation Reduction Act” (IRA), in part because of its distortionary tax credits for select energy products such as wind, solar, and electric vehicles. Apart from protectionist and costly country-of-origin provisions, which currently allow only 10 models of electric vehicles to receive credits, the IRA includes massive tax credits and giveaways for renewable production and consumer use. Many of these tax credits don’t create broad benefits for society, but instead will go to wealthier families and individuals who could afford these clean energy products without taxpayer-funded assistance. The battery credits in particular were only estimated at $30 billion by the Congressional Budget Office at the time of the IRA’s passage but are now estimated to cost the taxpayer up to a whopping $196.5 billion.
Title IV: Family and Small Business Taxpayer Protection
NTU believes the $80 billion sent to the Internal Revenue Service (IRS) under the Inflation Reduction Act was too much funding for a beleaguered agency delivered too fast, and the law’s authors erred in prioritizing massive enforcement funding over urgent taxpayer services and modernization needs. NTU wrote in support of a bill to repeal the bulk of the IRS funds earlier this year. Indeed, the recent spending plan released by the IRS well after the deadline was sparse on details. NTU also believes that the IRS must address fundamental agency flaws and better serve taxpayers going forward, and this section acknowledges these needs by retaining additional funding for Taxpayer Services and Business Systems Modernization at the IRS. While this section is not perfect, remanding billions in funds back to taxpayers while leaving funds providing for modernization and taxpayer services could jumpstart a conversation to get this agency back on track to serving all taxpayers.