NCPA - National Center for Policy Analysis

Reining in Federal Spending

March 11, 2004

Following a multiyear spending spree that pushed federal spending above $20,000 per household and the budget deficit up to nearly $500 billion, lawmakers are finally seeking ways to control federal spending. President George W. Bush's 2005 budget provides a positive first step by proposing to freeze most nonsecurity discretionary spending at 2004 levels, says Brian M. Riedl of the Heritage Foundation.

If they are serious about controlling spending, lawmakers and the president should take the following five steps, says Riedl:

  • Veto legislation to expand highway spending by 72 percent, increase special education spending by 151 percent, and once again extend unemployment benefits.
  • Balance the budget with spending cuts; this will improve the country's ability to deal with the massive Social Security and Medicare liabilities that will come due when the baby boomers retire.
  • Even after excluding defense and costs related to September 11, discretionary spending is rising 7 percent annually; Congress and the President should set priorities and balance each high-priority spending increase with a low-priority spending cut.
  • Lawmakers seeking to rein in spending should put all entitlement spending on the table, including the 2003 Medicare drug bill and the 2002 farm bill.
  • Fix the budget process; currently, it provides no workable tools to limit spending, no restrictions on passing massive costs onto future generations, and no incentive to bring all parties to the table early in the budget process to set a framework.

In 2004, national defense, homeland security and entitlement challenges make spending reform more important than ever. It is time to step back and think about the role of government, the obligations of the private sector, and the delineation between federal and state responsibilities, says Riedl.

Source: Brian M. Riedl, "How to Get Federal Spending Under Control," Backgrounder No. 1733, March 10, 2004, Heritage Foundation.


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