Reconciliation Instructions Must Not Add to the Debt
Today, Senate Budget Committee Chairman Bernie Sanders released a budget resolution to allow for up to $1.75 trillion of new borrowing through reconciliation, which a companion memo claims will be paid for through unspecified offsets from the Senate Finance Committee and long-term economic growth. The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
This should be a non-starter. It made sense to borrow to fight the COVID crisis, but there is absolutely no reason to borrow more for new permanent spending programs. Especially since it appears the bipartisan infrastructure bill may add significantly to the debt.
We’ve borrowed $6 trillion over the past two years alone, and debt is headed to record levels under current law. Budget reconciliation should be used to help us reverse course, not leave open the possibility to make a bad situation even worse.
While lawmakers claim the $1.75 trillion of authorized borrowing will be covered by offsets largely proposed by the Finance Committee and promises of long-term economic growth, they should have required it to be fully paid for in the instructions rather than punting the decision to the committees and hoping for magical economic gains that may never appear. Frankly, Congress has lost so much credibility on the fiscal front that one has to wonder when lawmakers say ‘we will pay for this later—we promise,’ whether they even believe it themselves?
A responsible budget should include budget-neutral or deficit-reducing reconciliation instructions, not deficit increasing ones. The Senate should adjust this resolution by increasing savings requirements from the Finance Committee, reducing cost allowances in other committees, or some combination. Regardless of the numbers in this budget, lawmakers should stick to their commitment that this bill is fully paid for once the legislation is released.
We can’t borrow our way to prosperity, and it’s time we stop trying to.
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