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Oct 21 2011

An End to Budgetary Trickery

When is money it spends considered money saved? When Congress says so.

“The whole art of government,” Thomas Jefferson wrote in 1774, “consists in the art of being honest.” Yet Washington today relies on budget gimmicks to enable and conceal countless billions in federal deficit spending—skirting the rules and misleading the public.

That is why we have introduced the Honest Budget Act. It will strip away many of the most blatant and dishonest gimmicks—making it harder to spend money we don’t have, and helping to confront the larger culture of fiscal corruption that is bankrupting the country and eroding public confidence in government.

The place to start is with the budget itself. For two years in a row, the Democratic-led Senate has failed to adopt a budget as required by law. Meanwhile, our gross national debt has climbed to almost $15 trillion—as large as our entire economy. Our bill puts in place a 60-vote threshold before any appropriation bill can be moved through Congress—unless both houses have adopted a binding budget resolution.

The bill also eliminates other budget tricks, including:

• Emergency Spending. In recent years, Congress has added billions to the deficit by labeling routine expenditures as “emergency” spending, allowing lawmakers to skirt normal budgetary rules. For example, Congress included $210 million in “emergency” spending for the 2010 Census even though, since its ratification in 1788, the Constitution has required a census every 10 years. Under current Senate procedure, attaching the “emergency” designation to a measure is easy—it’s simply tucked into the bill text by a single senator before the bill ever comes to the floor. The Honest Budget Act makes the process more open and transparent by requiring a supermajority of the Senate to add the designation.

• Phony Rescissions. One of Congress’s favorite gimmicks is to rescind, or cut, money that was unspent—or never going to be spent in the first place—and then use those “savings” to claim that increased spending elsewhere has been paid for. For instance, suppose $10 million has been appropriated to renovate a federal building that turns out to cost only $8 million. Instead of reducing the debt, Congress can rescind the $2 million difference (that never left the Treasury), and use it to increase spending by $2 million elsewhere. Thus, Congress can claim a bill that spends two million taxpayer dollars has no impact on the debt.

Since 2005, Congress has used this gimmick on 12 occasions to increase spending by $29.5 billion by rescinding unused highway money previously authorized. The Honest Budget Act prohibits rescissions from being counted as spending cuts unless they produce actual cash savings over the budget window.

• Fake Federal Pay Freezes. In November 2010, the president promised to institute a “two-year pay freeze for all civilian federal workers.” He explained that “getting this deficit under control is going to require broad sacrifice.” But 70% of civilian federal workers have continued to receive 2%–3% automatic “step” increases just for showing up—costing taxpayers an extra billion dollars every year. The Honest Budget Act, in keeping with the president’s pledge, would simply make the federal pay freeze real by legislative mandate.

• Timing Shifts. The drafters of bills use this device to cheat the budget rules prohibiting legislation from increasing the deficit. By shifting expenditures or tax due dates from one period to another, legislation can appear to be deficit-neutral in the near-term when it really isn’t. Since 2009, Congress has used timing shifts to claim $42 billion in bogus “offsets” that don’t actually save money in order to increase spending and claim budget neutrality. The Honest Budget Act would establish a new rule to prevent these artificial savings from satisfying the requirement for budget neutrality.

Washington has produced three consecutive years of deficits in excess of a trillion dollars. We are borrowing 40 cents of every dollar we spend. In order to restore public confidence, create long-term job growth, and prevent a European-style debt crisis, we must rein in the explosive growth of the federal government. No more gimmicks, tricks or shell games.

Mr. Sessions, a senator from Alabama, is the ranking Republican on the Budget Committee. Ms. Snowe, a senator from Maine, is the ranking Republican on the Small Business and Entrepreneurship Committee.

This op-ed originally appeared in the Wall Street Journal.