It was nearly 50 years ago that a liberal Congress completely dominated by Democrat big spenders passed a new set of budget rules — the Congressional Budget and Impoundment Control Act of 1974.
It has been a complete and unmitigated disaster. Since the act’s passage, the budget has been balanced four times and unbalanced 46 times. This was by design. Despite being called a “budget reform” law, the act was intended to grease the skids for new spending, but even Congress members the ’70s who designed it that way couldn’t have imagined the Pandora’s box of spending and debt it uncorked.
The law’s intention was to loosen restrictions on congressional spending, and to that extent, it worked.
This year, Congress hit a new low. Even with record-high deficits of nearly $2 trillion a year, Democrats and Republicans on Capitol Hill held hands in bipartisan agreement to spend $95 billion on a foreign aid bill for Ukraine and Israel without ONE PENNY being paid for with offsetting spending cuts — even though the flabby budget now exceeds $7 trillion.
Both parties have bought into the idea of “modern monetary theory,” a crackpot scheme that says the U.S. government can spend and borrow to kingdom come — which may arrive a lot sooner than we think if we stay on this financial path. In just the first three months of this year, Congress borrowed another half-trillion dollars. The members of Congress should be wearing T-shirts that read, “Stop us before we spend again!”
I’d like to suggest some common-sense ideas; it’s time for citizens to impose a fiscal restraining order on Congress and the White House.
- Presidential impoundment authority. The president, just like the CEO of a company, should have the power to suspend spending on programs if it is deemed unnecessary. Every president from Thomas Jefferson, who used the power to stop some ship building for the military, to Abraham Lincoln to Franklin Delano Roosevelt, who used the authority to end New Deal programs as the country entered World War II, to Richard Nixon exercised this control. In a $7 trillion budget, there are thousands of instances where money authorized by Congress is no longer needed. So let the president cancel it.
- A super-majority vote requirement to raise taxes. President Joe Biden wants to balance the budget with $4 trillion of economically disastrous tax increases and no spending cuts. But it’s the spending that is out of control, not the tax revenues. Any tax increase enacted by Congress should require a two-thirds vote in both houses to be approved. This is what many well-run state governments require, and there should be similar safeguards in Washington.
- A millionaire subsidy elimination act. This is an idea the late, great economist Walter Williams and I proposed over a decade ago. The idea is that no individual with an income of more than $1 million should be eligible for federal aid payments, and no business entity with more than $1 billion in revenues should be eligible for federal corporate welfare subsidies. This would have rendered the so-called Inflation Reduction Act, with its tens of billions of dollars in handouts to green energy firms and semiconductor companies like Intel, null and void.
- The budget stamps solution. Here’s a simple idea that would effectively require a balanced budget each year. The concept was originally proposed by former Reagan administration economist John Rutledge. Under this plan, the government would issue a special blue currency called “budget stamps” that would be issued to all recipients of federal spending — much in the way that food stamps are issued to poor people. But budget stamps’ value would fluctuate with the amount of excess spending authorized by Congress — much as the dollar fluctuates in value every day relative to the price of gold or other currencies.
Recipients of federal assistance, federal employees and those who run federal agencies would receive this year $6 trillion in budget stamps. (Interest on the debt is excluded.)
But that money in total would be worth only the amount of money expected to be collected in taxes that year. So if tax collections were estimated at 90% of the spending, then every budget stamp would be worth 90 cents, not a dollar. The bigger the expected deficit, the less a budget stamp would be worth.
This would create a competition for dollars between agencies and programs. Each dollar allocated to foreign aid programs would be one less dollar available for the Pentagon, Social Security recipients, defense contractors, green energy programs, bilingual education and sugar subsidies.
Deficits would be impossible, since the government under the new rule would be incapable of spending more than it took in. Because Congress’s salaries (and staffs) would be paid in budget stamps, Congress would be financially incentivized to cut unnecessary and wasteful spending.
Almost no one in the Washington swamp will like these ideas — all the more reason to adopt them.
Stephen Moore is a visiting fellow at the Heritage Foundation and a senior economic advisor to Donald Trump. His latest book is: “Govzilla: How the Relentless Growth of Government Is Devouring Our Economy.”
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Stephen Moore is a rigorous, commonsense economist. I, too, have a radical and very simple plan for reducing federal spending: eliminate federal agencies that do not comport with Constitutional limits on federal power. Some example agencies for immediate elimination: the Departments of Education, Energy, Interior, Agriculture & Homeland Security, and the EPA. There are many more. In fact, I’ll argue that few, if any, federal bureaucracies are necessary beyond those managing national defense and interstate commerce. The IRS could be abolished by implementation of a national sales tax. It is well past time to RADICALLY reduce the size, scope, power & cost of the federal government and its megalithic, unelected, uncontrolled bureaucracies.
fantasy land.
In order for any of this to even enter the brain of anyone is could remotely mention this stuff, they would have to give a crap about the country.
Those in charge only care about extracting the wealth of the country for themselves and wrecking everything they can on they way out the door.
its a biparitsan issue. Pretty much they only they never talk abut yet agree on 1000%.
Should households be run the same way as federal government not one would survive bankruptcy
It sounds feasible but I do not agree with the part where it takes money away form social security. We live on our payments and I want you to know we are not a charity. We have all worked for our benefits and we took a hit when they put the money that was paid in the general funds. It was never to have been done. It was to be kept separate for retirees only. Think twice about this when we retirees have to take a hit sometimes to pay for others school loans and such, You in Congress do not know what it is really like living on a fixed income nor how much things have increased due to inflation. You are all sitting in your big houses and we, the little people, pay your salaries.
With the current incompetence now in DC we need all of the above and we need them
today.
We the people cannot spend more than we take in. Government should not be any different. Under ole Joe they went crazy. Lots of money was spent outside the country. The Ukraine is one, the illegals let into the country for two and inflation is a third. All to destroy America. This spend on the level of taxes received sounds like a good solution to me. Get the pork out of any bills passed. This last bill more money went to other countries than the homeless or hungry in this country. The illegals are getting everything and we legal citizens are being overlooked as so much trash. The solar and wind energy companies are raking in their subsidies. As well as e vehicles companies. Electric appliance companies and don’t forget Silicon Valley companies with their AI control they are forcing on every person in America. Inflation was created to get us to digital money which the banks will control. But first they had to get the money from the middle class. Then mandate to buy e cars, e appliances, solar panels. Then everyone is broke and that is when the govt jumps in and says you will live here. You will have so much money each month and where to spend this money on. Families will live together. These illegals will live in your house. Because they are the new population of America. The obeying, voting democrat new population. It is coming real soon. We are half way if not 3/4 of the way there. One more dem regime. Be very careful for whom you cast your vote in November.
About half or more of our Federal bureaucracy needs to be cut out! All they do is figure out ways to tax, fine or regulate every aspect of our lives! And they are not elected by We the People! The Social Security Trust Fund is going broke because the Presidents starting with Johnson started raiding the Fund and replacing the money with worthless I.O.Us. Responsible Presidents desperately need the Line Item Veto. The prime duty of our Federal Government is National Defense, not Climate Change! We had better address our prime duty, or we will all be speaking Chinese, Russian or Farsi!
Why are social security recipients included in that? They Deposited from every paycheck they ever earned. It’s not a hand out
One radical idea to reduce the bloated Federal domestic spending would be for the Congress to quit funding local and state responsibilities, and let local and state governments carry out their intended functions. That would mean, to me, no funding for programs and projects that aren’t NATIONAL in both purpose and scope. Imagine Federal funding only for actual NATIONAL programs and projects–and no more self-serving ribbon cutting for local projects by national office holders. If programs and projects aren’t a high priority locally or state-wide, they simply wouldn’t be government funded. Such determinations of priorities is the reason state and local governments exist.
The most “radical” idea would be to fund ONLY those things which are authorized by the CONSTITUTION!!! The budget would shrink by about 80%!
What about OUTLAWING earmarks, a frequently absurd budget deficit. And what ever happened to the BALANCED BUDGET Amendment?
All great ideas. Let’s see if any sanity comes to Washington this November.
Great idea. Only getting that passed would require rendering unconscious every member of Congress and the Senate before putting it to a vote.
There is nothing radical about those reforms.
complete idiots
More radical CUT SPENDING. No more handouts to illegal aliens, eliminate govt departments, agencies, and funding. Start with Dept of Education, IRS, and NPR.
There isn’t a democrat alive that would cut any program except the military budget. Then again, yes I’m voting for him, Trump didn’t make any cuts either.
Under Reagan, the demoncrats agreed to cut spending, in other words reduce the increase, but they lied, AS USUAL. Now with rhino’s running the house we have no chance of cutting anything. All those jerka in congress care about is getting re-elected enough times to become millionaires through stock insider trading.
Here’s an idea- get rid of wasted $$ by shutting down a few Departments- HUD, Energy, Education and EPA. BILLIONS SAVED immediately.
None of that will ever happen Democrats will fight it tooth and nail. Their mission of destroying this country will continue
This should be adopted holding congress accountable,It would be tougher to get elected when you aren’t squandering our money,trying to stay elected to get your millions ????
In my over 40 years of working experience, many of them where I was required to build my department or division budget, we would be tasked with an “x”% reduction from current year budget and/or current year forecasted expense (varied from time to time). If every department of the Federal government, from Congress to the White House to the Courts, was tasked with a % reduction in next year’s budget that would slow or stop budget increases. Departments that spend more from their budget get tasked with that additional amount as a negative for the following year.
Stephen Moore needs to be in charge of the Treasury Dept. in the 2025 Trump Administration. Bar None!!! I use to listen to Walter Williams a lot during the 1990’s, he had a lot of great economic and political theories.
I just read an article with 4 great suggestions in it that will never happen. Money is power and both democrat and republican alike are getting drunk of it at our expense. I think George Carlin said it best when he said “They don’t give a f$$$ about you.”
joe (and his handlers’) goal is to sink the economy. That is the only logical explanation for his total mismanagement and disastrous policies.
Brace yourselves: for any budget reform to work we need to consider who we let vote on tax and spend policies. In short, those who are freeriders; ie people who could work but dont and who recieve government largesse should not be able to vote. Only then do grand theories about fiscal restraint make sense, because as long as the current system stays in place dems will continue to buy votes with stolen money.
“President” Biden owes me, my family, my neighbors, my community, and my country for all of the needless cost he has intentionally imposed, in terms of personal safety, national security, cost of goods & services, taxes, election interference, taking bribes from foriegn countries, and sponsoring demented, leftwing “culture” (soiling city sidewalks and supporting riots to protect mass murderers).
Of course, he’s not smart enough to make anything whole again, but he can try pulling me around the White House on a rickshaw until he’s permanently too unresponsive to sign anything else…
Personal to Stephen Moore. The most neglected item in the budget is INTEREST, projected to be about $1 trillion. The only way to reduce interest is by paying down the existing $35 T debt. The government has no plan, or intent, to pay it. The Think Tanks avoid it. There is an outside the box viable plan, MFS PATRIOTIC CAPITALISM. Please contact me at [email protected] and I’ll send a brief introduction – “When In A Hole Stop Digging”. You and Larry will love it! Bob Deighton
Why did this article not mention Repeal of the 1974 Budget Act that it says is the problem in the First Paragraph.
While discussing this we should also advocate the repeal of Ed Kennedys 1965 Immigration Reform Act where the Dimms tried to first put the Replacement Theory into law.
And while wishing for miracles, lets also say institute a Flat Single Rate Tax sith a large deductible (say George McGovern’s $1000/Month) like $12000/yr per individual so a family of four would have $48K and the average woould pay little tax?
WOW!
We all have fdr (he abandoned the gold standard in 1933) to thank for the runaway debt and those that continue to pile on the debt. It used to be that the government couldn’t spend more than they had in gold to back up the dollar. Without that the government can go nuts with spending and not worry about paying anything back. Wish I had that kind of deal.
You can take your budget dollar idea and stuff it. Including SS is a bad idea and it should not be at the whim of any Congress or President either. SS started as an entity divorced from the swamp and should be returned to itself as such. The funds it has should not be used to pay for the so-called disabled income people(basically just a bunch of beggars) and none of the funds should be used for anything or anyone but the retirees who paid into it. Otherwise, the other 3 previous points are fine.
So, what are the big spenders in DC, both Democrats and Republicans, going to do when they’ve extorted all the money from We, the People, and there is none left to take? What happens when those Congressional amadans have impoverished all the rest of us, forcing us onto government welfare programs? How will they fund those welfare programs when there is no one left with enough money to pay taxes? These are the possible consequences of their fiduciary irresponsibility. One thing I know, they won’t delve into their private fortunes to pick up the slack. They are only interested in depleting everyone else’s savings accounts with no thought given to the financial difficulties which the majority of the population are experiencing due to their lack of budgetary self-control.
Cutting the deficit means government spending less on itself… good luck with that!
If you want a balanced budget, dont hand out BILLIONS in the first Damn place. Kyle L.
Balance the budget!
We all can talk all the trash we want right now and it won ‘t change a thing until we get someone in office who is really in there for the Peoples!? 45+ years and still no true change!? The facts are as long as you have the Stupider following the “Great Con” nothing will change for the better!?
Regarding: #2 A super-majority vote requirement to raise taxes. I’d say if a bill passes with a simple majority, LET THE MONEY COME FROM THE DISTRICTS/STATES THAT PASSED THEM. That would put an end to Area A spending money coming from Area B.
Democrats utilize VOCABULARY well. They call things words that are NOT. They call out Good using mean or derogatory terms. They cover EVIL n wickedness by twisting or ruining nice words. The Republicans then converse against dems using THEIR Vocab. Brilliant. Stupid n wrong but the pro marxist press takes off with this n reinforces it and the media succumbs to it and many WeThe PEOPLE swallow in ignorance and compliance. Starts in public school Early. Indoctrination stations, college, really poisons the minds with terminology. So… ????????♂️
1000% support for this plan! Seems there are no constraints on spending currently and tax increases seem fueled by whims. One area that needs even more attention is the size and reach of the FED.
Paying Congress members and staff with budget dollars is particularly interesting as a way to control deficit spending…certainly no intelligent individual would choose to be paid with a 90 cent dollar…but then we are talking about members of Congress and their staffs.
I do not see any merit in any of these options! JO Bama and Comrades have flunked the Budget 101 class ,!: oops, do we have a current approved NEW BUDGET ?????? I do .not think so but I may be wrong!!!!!!!!!!
When the hard working tax payers finally wake up and say NO MORE!! Then maybe something will be done! Too many greedy corrupt politicians in Washington giving away the store! Close the Bank!
Good luck! The morons in charge of this country would not give this plan a moments thought.
As a retired practicing analytical economist who has a doctorate in public administration and economics, I am sorry to say that I disagree with the implementation of any of the above the four suggestions of “new”‘ economic policy implementation. First, I disagree with the idea of a president being able to impound funds because it is simply against the U. S. Constitution. The President does not have the authority to impound funds any more than he/she has the authority to spend money not appropriated by the Congress. (See Article I, Section 9, Paragraph 7 of the U. S. Constitution).
As for the second suggestion, low tax rates on the wealthy that have been employed since the Reagan Administration have gutted the tax revenue for the U. S. Treasury. Granted we have experienced extremely unconscionable payments to individuals with no incentives to become productive employees with good paying jobs. Additionally, the federal tax rates on people who earned $500,000 per year or more were in the range of 70% to 90% from the 1930s through the early 1960s. The income taxes on wealthy individuals were reduced to 50% during the mid-1960s, and then around 35% early in the Reagan Administrations. It is not only the explosion in new payments to individuals that arose from the Johnson “War on Poverty” programs, but lower tax revenue due to the great reduction in tax rates for the high income earners that helped us get the mind-blowing increases in the federal deficits during the last 30 plus years. I believe that a tax rate of 70% for people earning $400,000 or more a year is both reasonable AND necessary. We will never dig our way out of our current debt hole that we have built over these last thirty years. I also would increase taxes on corporations who make an excess of profits over some stated return on investment. If you will remember we had an excess profit tax placed on the oil companies during the late 1970s and early 1980s. This concept should be placed on all companies that are fairly easily identified as gouging the American consumer with their prices. Look at this year’s Fortune 500 and it won’t take to much time to see whose corporate profit percentages were unreasonably high compared to their revenues.
Eliminating subsidies to wealthy annual personal income earners, is something that I support given it would be applied in some kind of an excess income measure form.
Tying payments to all recipients of federal payments to individuals is a wholly ridiculous idea, because both the programs and those who received dollars from these differing programs have very divergent goals. For federal civilian and military retirees, the Congress has specifically tied their annual increases to the CPI in order that they not suffer unnecessary purchasing power during their retirement years. As for most other government subsidy people, loosely called “welfare recipients,” the agreement made between the Gingrich lead House and President Bill Clinton made welfare a closely associated term of “workfare.” The principle was simple, welfare recipients had only a limited number of years to collect welfare and then had to get a job to become a productive member of society. Since the Obama years, this workfare concept has become moot and we now have a life-long welfare program.
I have several other analyses and projected fixes for the U. S. Economy, including the Federal Government’s finances in my newest book just released entitled, “Conservative Views On Modern Capitalism in the United States. I believe it is worth a read to all conservative Americans and any liberals that have an open mind.
John Bredfeldt
That white house and those squatters who slink through the hallways is nothing more than a satanic roach motel.
I vote for people who are supposed to take care of the DC budget stuff for me. Everyone is fiscally conservative until they go to DC. By the time they leave they all believe in MMP. Republicans must agree on balanced budgets and a line item veto, it’s really that simple. Congress is supposed to prioritize spending not just give cash to every idiot who comes by with his hand out. Congress needs to commit to a balanced budget! After the appropriate personnel cuts in the federal government it should be much easier to meet that goal and keep the Trump budget cuts.
Just as an example of the budget insanity given our immigration invasion crisis, we really have to ask if anyone read the Ukraine/Israel bill before signing it? Gaza gets $9 billion (almost as much as Israel and nearly 5 times their GDP? If that isn’t bad enough there is reportedly almost $4 billion in the bill to open immigration offices in the middle east to facilitate more immigrants from those Countries.
After Speaker Johnson promised us that closing the border was a hill this republican Congress would fight for and die on before giving money to Ukraine this bill was a real disappointment. What will it take for these CLOWNS to understand what the people want/demand? Or am I the only one that thinks we send “smart” people to Congress to make tough choices and it is infuriating that they have not done their job in a very long time?
Perhaps it’s time for a budget pledge that says “I will demand that Congress pass a balanced budget and close the year within budget or I hereby agree to reimburse the government for my salary and all appropriations related to running my office (including all salaries) each year I am in office”. Where has Grover Norquist been all these years, oh that’s right he opposes tax increases and between spending the Social Security Trust Fund and monetizing the debt to cause inflation Congress is generally able to avoid tax increases.
I like the thinking here. Now is definitely time to institute new programs based on new ideas and common sense. And I like how you put the blame on both parties. Are you folks aware of the Common Sense Party? I ask because the thinking here is very similar. It’s a fast-growing independent party who thinks the government should work for the good of the people, not itself. You might want to check them out. We’ve seen what our current system has done and what it’s doing. Nobody is happy with it. Both parties. The time is ripe for a third party.
Good luck with any of these “radical” ideas getting so much as spoken out loud in Congress, or the White House, much less considered; and even less chance of enactment.
when exactly did the 1974 budget act pass?
before or after nixon resigned
Its