Committee for a Responsible Federal Budget

Will Congress Embrace Spending Restraints?

May 24, 2010 | Budget Process| Other Spending

As Congress debates hundreds of billion of dollars of new deficit-spending this week, they may also begin considering two proposals which can actually help to restrain spending -- discretionary spending caps and advanced rescission authority. The caps, which will be introduced by Senators Claire McCaskill (D-MO) and Jeff Sessions (R-AL), will attempt to control spending for fiscal years 2011 through 2013 as an amendment to the defense supplemental that the Senate will consider this week.

The bipartisan team of Senators has offered such spending cap amendments in the past, but have failed to reach the 60 votes necessary for passage.  McCaskill and Sessions want to put in place three year caps on defense and nondefense discretionary spending, making some exceptions for war spending, program integrity adjustments, and emergency spending. The caps would require a two-thirds majority vote of the Senate to waive.

The legislation has been modified in an effort to secure the 60 votes needed. For one, it will now cover only three years, whereas a previous iteration of this legislation had it covering five. Additionally, instead of continuing the $10 billion emergency fund that existed in last year's budget resolution, that money would instead go to non-defense discretionary spending for the three years the spending caps would be in place. This would accomodate the $12.5 billion increase in domestic security funding laid out in Budget Committee Chairman Kent Conrad's mark. 

We continue to strongly support discretionary caps as an important tool to help control spending growth. These caps have a proven record, as they contributed to the surpluses of the 1990s. Without caps, as we pointed out in this paper, discretionary spending growth would have increased significantly.

President Obama unveiled another proposal today to help control spending, called the "Reduce Unnecessary Spending Act." This legislation would give the President "enhanced rescission authority" -- which can be thought of as a weaker version of the line-item veto. Esentially, the President would be able to identify wasteful spending, and then Congress would be required to consider rescinding this funding in an up-or-down, amendment-free vote within a certain period of time. 

This rescission authority would replace the line-item veto provision which is currently in the books, but was ruled unconstitutional by the Supreme Court in 1998. Though this rescission authority would likely only effect a small portion of the budget, we believe it would be an important and effective tool for reining in pork and low-value spending. We also believe it can play a role in fostering a sense of fiscal responsibility in Washington.

As OMB Director Peter Orszag says in his blog today, "in the current fiscal environment, we cannot afford this waste." We agree, and hope that Congress adopts both the President's enhanced rescission authority and the McCaskill-Sessions spending caps.