NTU Sends Memo to Senate Budget Committee on Key Taxpayer Considerations for the 118th Congress

To: Members of the Senate Committee on the Budget
From: Andrew Lautz, National Taxpayers Union
Date: March 17, 2023
Subject: Key Taxpayer Considerations for the First Session of the 118th Congress

  1. Introduction
On behalf of National Taxpayers Union (NTU), the nation’s oldest taxpayer advocacy organization, I write to congratulate you on the start of the 118th Congress, applaud you for your service on the Senate Budget Committee, and share recommendations from NTU’s experts and advocates on policy reforms under the Committee’s jurisdiction for the first session of the 118th Congress.
NTU was founded in 1969 to be the “Voice of America’s Taxpayers.” For decades, we have worked with stakeholders inside and outside of government, in Washington, D.C. and across the 50 states, to achieve favorable policy outcomes for taxpayers. We have worked with Members of both parties over the years to reform the Congressional budget process, offer suggestions to improve and modernize the Congressional Budget Office (CBO), and work in a bipartisan fashion to put the nation’s debt and deficit trajectories back on a sustainable path.
As you embark on what will no doubt be a busy agenda for the Senate Budget Committee in the 118th session of Congress, we wish to offer some initial taxpayer considerations on the policies and oversight priorities the Committee should pursue in 2023 and beyond. We wish to be a productive partner for Committee Members and staff on both sides of the aisle. We welcome any feedback you may have and the opportunity to meet with you, and are at your service.
  1. 2023 NTU Policy Priorities Under the Committee’s Jurisdiction
NTU has several policy priorities for 2023 under the Committee’s jurisdiction:
Reforming the Congressional Budget Process
For years, NTU and NTU Foundation have worked with both parties to reform the broken Congressional budget process. NTU was proud to support the Bipartisan Congressional Budget Reform Act (BCBRA) in the 116th Congress, championed by the late Senate Budget Chair Mike Enzi (R-WY) and current Senate Budget Chair Sheldon Whitehouse (D-RI).
Whether in comprehensive legislation or broken into its component parts, many of BCBRA’s reforms are as needed today as they were three years ago:
  • A move toward biennial budgeting: BCBRA would have instructed Congress to pass a two-year budget resolution in the first year of a new session, which would inspire Members to think more about the impact their decisions have over the long run. Appropriations would still be annual, but topline figures set by the budget resolution would be biennial.
  • Debt-to-GDP targets: Budget resolutions would have to include “a projected debt-to-GDP target for each year covered by the budget resolution” - an absolute necessity with debt projected to exceed the nation’s annual economic output. During the second year of each resolution, CBO would have to report on whether or not the federal government is meeting its debt-to-GDP targets. If the government is falling short, BCBRA would trigger a reconciliation process that forces Congress to address those failures.
  • Special reconciliation process for deficit reduction: Under this special reconciliation process, the Senate Budget Committee would have to report a special resolution to the Senate that contains “(1) the total level of deficit reduction … and (2) reconciliation instructions to one or more Senate committees specifying the total amount of deficit reduction to be achieved through changes in laws within the jurisdiction of each such committee.”
NTU has supported additional budget process reforms that could be part of this broader discussion at the Committee. One is the bipartisan Preventing Government Shutdowns Act from Sens. James Lankford (R-OK) and Maggie Hassan (D-NH), which would end the disruptive and costly specter of government shutdowns once and for all while establishing rules that ensure Congress is not delaying in its duty to pass budget bills on time. Another is the Responsible Budget Targets Act from Sen. Mike Braun (R-IN) and House Majority Whip Tom Emmer (R-MN), which would limit government spending growth in future years to a “primary balance factor” that is based in large part on the nation’s annual GDP growth rate. These rules would operate similarly to the Swiss “debt brake,” a highly successful amendment to Switzerland’s constitution that has helped the nation stabilize its debt levels in the 21st century.
Additionally, NTU and NTU Foundation encourage the Chair to make scorekeeping reports to the Senate chamber on a regular basis. These reports help Congress keep track of the status of the budget, taking into account how recently-enacted legislation has impacted total spending and revenue levels. The information is used for budgetary enforcement of measures under consideration. The Congressional Budget Act of 1974 requires CBO to provide the budget committees with up-to-date tabulations of Congressional budget action, and in turn, the chairs of the budget committees are supposed to make periodic scorekeeping updates to their respective chambers. Despite this requirement, there were lengthy gaps in providing this information during the 117th Congress. Adhering to a regular reporting schedule will help keep lawmakers apprised of the budget state, especially important at this time during the debt ceiling impasse.
Promoting Fiscal Responsibility in the Federal Budget
As the Committee itself notes, the “Committee remains responsible for drafting budget plans for Congress.” NTU and NTU Foundation believe that the fiscal year (FY) 2024 budget resolution offers the Committee an important opportunity to put the nation’s fiscal trajectory back on the right track. Some fiscal and spending goals in the current Congress are more aspirational than achievable at this moment, such as balancing the federal budget within 10 years. Committee Members should apply the spirit of these proposals, though, to bipartisan and achievable targets in the budget resolution.
We continue to support a new round of discretionary spending caps, which in the 2011 Budget Control Act (BCA) earned widespread bipartisan support. Discretionary spending is only a small part of the equation to fixing the nation’s debt and deficit troubles, but it's the part of the budget Congress can control the most and it's an important piece of exercising budget discipline in the short term. House Budget Chair Arrington introduced legislation in the last Congress that would cap discretionary spending for 10 years, and could save taxpayers as much as $500 billion over the next decade. Contrary to some claims from opponents of spending caps, caps can be designed to slow spending growth – they don’t necessarily have to slash spending from current levels. Indeed, Congress should pursue caps that can maintain bipartisan support now and into the future, as it is more important to establish durable, if modest, spending caps than it is to create more aggressive, but unsustainable spending limitations. Taxpayers learned this lesson repeatedly from the BCA.
Outside of the budget resolution, we believe that Committee Members can assert their goals on fiscal responsibility in other ways, including:
  • Advocating for sequester reform: Sequestration rules are supposed to be a fallback for when Congress fails to pay for their new spending. Unfortunately, the rules don't work because lawmakers have exempted the vast majority of government programs from facing haircuts. Sequestration reform could broaden the base of programs facing haircuts, both making the stopback more meaningful and providing an incentive for Congress to pay for new spending.
  • Establishing dedicated fiscal commissions to tackle debt and deficit growth and rescue the nation’s trust funds: If Congress wants Social Security and Medicare to survive, it's going to need to address impending doom dates for those programs' trust funds, which have started to spend more money than they're taking in. Changes can be made to these programs that don't affect current retirees but help the program achieve balance in the middle and long term. Lawmakers should put together a bipartisan commission that spends time looking into how to save these programs before it's too late. The bipartisan, bicameral TRUST Act is a thoughtful example of what such a commission could look like and how it could operate.
Committee Members in both parties have demonstrated a commitment to fiscal responsibility and to reducing the federal government’s use of the taxpayer’s credit card. We look forward to reviewing, supporting, and working with Members on additional ideas to promote fiscally sound policies.
Addressing the Debt Ceiling
Committee Members will play an important role in addressing the debt ceiling later this year. NTU and NTU Foundation believe default is not an option. We also believe that Congress must act on the nation’s broader fiscal and spending trends in the near term, and that the Biden administration and Congressional Democrats should negotiate with Congressional Republicans in good faith to enact comprehensive budget reforms.
Ideally, a debt ceiling increase or suspension would be paired with the kind of reforms included in the 2011 BCA. For better or for worse, negotiations between Republicans and Democrats as of this writing are at a standstill.
Modernizing CBO
Last but not least, as the Committee with oversight of CBO, we believe Committee Members have a duty to work together on bipartisan reforms to the operations and practices of CBO that could enable the agency to provide more accurate, complete, and comprehensive cost estimates for federal legislation.
CBO has made great strides in recent years, and they remain one of the most important institutions in Congress. However, we believe lawmakers can enact legislation that improves and modernizes the agency in a number of ways:
  • Shift from a Current-Law Baseline to a More Realistic Policy Baseline: CBO is required to build a current-law baseline, which skews budget projections because many programs and tax policies are set to expire but are generally extended.
  • Include Estimates of Debt Interest Payments in Cost Estimates: Rep. Cloud’s (R-TX) Cost Estimate Improvement Act would require that CBO include this information in its estimates.
  • Have CBO Show More of its Work: CBO has made strides to improve its transparency but Sen. Lee’s (R-UT) CBO Show Your Work Act would take this a step further.
We have several additional CBO reform and modernization ideas, and are aware that several Members of Congress in both parties have introduced additional, thoughtful proposals in this regard.
  1. Oversight Initiatives and Hearings NTU Would Like to See in 2023
In addition to the above legislative priorities, we believe the Committee should have a robust hearing and oversight agenda in the 118th Congress. Possible hearing topics could include, but are not limited to:
  • The impact of rising interest rates on federal spending, revenues, debt, and financing costs on our existing debt load;
  • Congressional budget process reform;
  • CBO reform and modernization;
  • The impact of the 2011 BCA, and which initiatives from the BCA Congress should keep, update, or scrap in any successor piece of legislation;
  • Emergency spending in the federal budget, and how Congress can better address and prepare for emergency spending needs in the future;
  • Sequestration under the BCA and the Statutory Pay-As-You-Go (PAYGO) Act, and why Congress has never allowed the latter law to go into effect;
  • Budget gimmicks frequently and reliably used by Congress, and how the Committee can play a role in stopping the use of these gimmicks; and
  • How peer nations, like Switzerland, have managed to control debt and deficit levels, and which lessons the U.S. may be able to take from other countries’ experiences.
NTU and NTU Foundation are always happy to offer feedback or testimony on any of the above topics or additional hearing topics the Committee decides to meet on in the 118th Congress.
  1. Contact Information
Should you have any questions about the recommendations in this memo, please do not hesitate to reach out to me at alautz@ntu.org.