October 2008

Isn’t what is good for the citizen good for the government?

   By Doug Stout

The Internal Revenue Service always seems pretty serious about their April 15th deadline to have our federal income tax returns filed.  If only the Congress felt the same way about the deadlines it has established to determine how best to spend our hard earned dollars…and the dollars they inevitably seem to borrow from future generations to sweeten the spending pot.  Our federal fiscal year begins on October 1, 2008.

Congress left for their summer recess with no concrete results to show for what most people believe to be their most important responsibility: how best to allocate the taxpayer-provided funds in order to benefit the public good. The House passed their first Appropriations bill on August 1 and promptly adjourned and left town until September 8th.  The Senate had not passed any Appropriations bills for the federal fiscal year prior to leaving for their August break.[1]  The Congressional Budget Act of 1974 calls for the House of Representatives to have completed work on all 12 of its House Appropriation bills by June 30.[2]  This allows the months of July, August, and September for the Senate to pass the bills and for the two bodies to resolve differences in their versions and send the resulting legislation to the President in order to be ready for the new fiscal year.

According to the Congressional Research Service: “In 26 of the past 31 years (FY1977-FY2007), Congress and the President did not complete action on a majority of the regular bills by the start of the fiscal year. In eight years, they did not finish any of the bills by the deadline. They completed action on all the bills on schedule only four times: FY1977, FY1989, FY1995, and FY1997.”[3]

In an interview with the National Journal on July 25, House Appropriations Chairman David Obey (D-WI) is quoted as saying “If (Republicans) want to know why the appropriations bills haven’t been moving, all they have to do is look in the mirror.”[4]  So it is clearly business as usual on the floors of Congress as the political parties use the appropriations process as political theater.  Under neither party has the start of the fiscal year acted as a firm deadline for reaching spending decisions on the best use of your tax dollars.  In fact, it more often signals at best, that perhaps it is time to start negotiating about the spending process.

So as fiscal conservatives, should we welcome the Congress’ inability to spend our tax money in a timely fashion? I am afraid that neither the motivation nor the result will be budget frugality.  When a political deal is eventually reached, often in the dead of night, with Member’s bags packed and the car waiting for a mad rush to the Reagan National Airport, the result is not likely to be a well-thought-out spending process with the best fiscal interests of the nation in mind. It is even possible that Congress will go into a “four-corner” stall tactic and attempt to delay the spending decisions for the fiscal year until the new Administration is in place in January of 2009.  Again, those are spending decisions on how to spend our tax dollars for the year which starts on October 1, 2008.

If you are an accountant by trade, you may believe that the problem is one of numbers. It would seem logical that the Congress would make its best determination of its income for the year, primarily from you the taxpayer…and then proceed on how best to spend the money.  In making those decisions, I would hope they would start from the very basic principle that the federal government exists to fund those things for which it is impractical or impossible for individual Americans, or the states, to fund for themselves.  National defense, of course comes to mind first, and certainly there are others.

Chairman Obey would seem to beg to differ with this approach. In the same interview with the National Journal, he described someone whose focus is on the budget deficit as “a one-dimensional bookkeeper with a cardboard heart.”  He went on to say “Green-eyeshade actions aren’t going to fix your long-term debt or deficit situation.  Making the right investments that will help the economy grow will help do that.”[5]

I certainly believe that investing in the future is prudent, but I also believe that going further into debt to do so is not something that should be done lightly. I also suspect that my ideas and those of Chairman Obey on what constitutes an investment in the economy would differ.  It seems there is no longer any connection between anticipated revenues and appropriation spending. Elected officials seem to put a premium on getting a larger piece of the budget pie, without having much concern about how the pie was created in the first place.  It is created by your tax dollars and by borrowed funds…with the collateral essentially being the future revenue from your children’s tax payments.  The “bankers” are located not only in the United States, but in nations around the world, including some that do not necessarily have our best future interests at heart.

We need Congress to meet its responsibilities. One of its primary responsibilities is to meet important deadlines for our nation’s funding decisions. It is a lame excuse that this has become a common practice. The answer of “this always happens” is just one reason that the American people have grown completely disillusioned with their Congress. The latest polls have Congressional approval ratings down to single digits, the lowest in history.[6]  Do they have to reach 0% before some of our elected officials realize they might be part of the problem?  The taxpayers deserve to have their hard earned dollars spent responsibly. It would seem to be a reasonable first step to assure the funds are allocated in a timely fashion.

Doug Stout is a Research Analyst at the Public Interest Institute. 

The views expressed herein are those of the author and not necessarily those of the Public Interest Institute or the Tax Education Foundation. They are brought to you in the interest of a better-informed citizenry.

[1] “Status of Appropriations Legislation for Fiscal Year 2009,” The Library of Congress Thomas, August 5, 2008, < http://thomas.loc.gov/home/approp/app09.html> (August 7, 2008).

[2] Bill Heniff Jr., “The Congressional Budget Timetable,” CRS Report for Congress, <http://lieberman.senate.gov/documents/funding/budgettable.pdf> (August 7, 2008).

[3] Sandy Streeter, “The Congressional Appropriations Process: An Introduction,” CRS Report for Congress, Updated February 22, 2007.< http://www.senate.gov/reference/resources/pdf/97-684.pdf> (August 7, 2008)

[4] Brian Friel, “The House Appropriations Chairman Takes a Dim View of Budget-Cutters Who Focus Solely on the Deficit,” National Journal.com, July 31, 2008, <http://www.nationaljournal.com/njonline/no_20080730_8281.php>  (August 1, 2008).

[5] Ibid.

[6] “Congressional Performance,” Rasmussen Reports, July 8, 2008, <http://www.rasmussenreports.com/public_content/politics/mood_of_america/congressional_ performance/congressional_performance> (August 7, 2008).