Vote Notes: H.R.3, Spending Cuts to Expired and Unnecessary Programs Act
The House voted earlier this week on the president’s rescissions package. It passed, 210 to 206, and I voted for it.
I wrote about the details of the proposal when it first appeared back in May, and my post is copied below.
I’d ask that you take the time to read that post, given the merits and demerits of the rescissions package. In shortest form, the merit is that we’re actually cutting something in Washington; the demerit is that what we’re cutting is unbelievably small relative to the size of the increase that we just saw in the omnibus package. The degree to which this is the case is shown by this chart.
There are only two things worthy of mention in updating my post from May:
One, the low bar in a small cut became a lower bar. In May, it was going to be $15.2 billion, the bill today dropped to $14.7 billion. Which is to say that in the course of about a month, the government was able to claw back $500 million from your pocket.
Two, the Senate might actually take the bill up. This looked unlikely in May, but there are several tea leaves out there suggesting that the Senate is finally feeling some degree of heat in their inactivity on things that would matter to people who want government limited.
I frequently say to my team that absolute numbers mean absolutely nothing to most people. When you hear the number $5 billion, or $5 trillion…or $5 million…we know that it is a big number, but it is the context of that number relative to others that gives it meaning and weight. Five million as a part of five trillion is not that big a financial commitment. Five million of six million would be.
In light of this notion of context, let me offer a few thoughts on the administration’s announced proposal to cut spending by $15.4 billion in what’s called a “rescissions” package.
Within the next few weeks, Congress will vote on it, and I intend to vote for the package.
Doing so will be good from the standpoint of every little bit helps when it comes to financial restraint in Washington…but these rescissions packages are hardly a cure-all in holding the line on Washington spending.
In this regard, for all the bluster for and against, let me give you a little context as to what this spending cut package really means.
This cut represents one-third of 1% of Washington spending this year. To put it another way, between this year and next year, the federal government’s interest payments on the national debt will increase from $316 billion to $390 billion. The funds rescinded under this proposal represent only one-fifth of that increase….and that’s just the increase in interest spending.
So for all the hyperbole, it’s symbolic no matter how you look at it. Some Democrats have exaggerated, suggesting these cuts are ominous for their implications on children's health care and more. This is not true. These monies could not be spent - their funding time period had lapsed, and this money was going to be reprogrammed one way or the other toward other spending or debt reduction.
On the other hand, some Republicans have suggested this rescissions package points to financial restraint’s long-awaited arrival finally coming to Washington. This is equally untrue. It’s one-third of 1 percent and is dwarfed by the size of how much spending will grow this year.
A little more detail on both sides of this debate...and let's start with the $7 billion the measure would rescind from the Children’s Health Insurance Program (CHIP). It may seem ironic for Congress to be rescinding money from this program only months after reauthorizing and funding it for five more years. However, funds in the CHIP program are only available to be spent for a two-year period, hence the $7 billion just sitting in the program’s coffers. This money literally cannot be spent under current law, so rescinding it will not affect the program in any way.
Not all unspent funds are the products of rules and restrictions governing how they can be spent. Sometimes, a program simply slows to a halt, and its allocated funding freezes in place with it. For instance, President Trump’s proposal would rescind $4.2 billion from a Department of Energy program that guarantees loans to manufacturers of electric cars. Since 2007, this program - called the Advanced Technology Vehicle Manufacturing (ATVM) Loan Guarantee Program - has approved five loans of which two have failed, leaving taxpayers on the hook for tens of millions of dollars. Not only has the ATVM program failed to issue a new loan since 2011, its lending authority expired in 2012, and it hasn’t considered new applications since 2013. The $4.2 billion in its account will never be spent, so it makes sense to return that money to the Treasury.
The Advanced Technology Vehicle Manufacturing Loan Guarantee program is something I’ve targeted a couple times in the past, introducing amendments in 2015 and 2016 to defund it. It’s not being used, it can’t be used, and there are certainly other areas that could use the funding.
One thing that’s important to understand about this proposal is that it’s not a spending “cut.” The funds it targets were never meant to be spent in this fiscal year, and so “cutting” them will not actually reduce the amount of taxpayer dollars the federal government plans to spend this year. What the proposal would do, however, is reduce this year’s budget deficit. The funds it rescinds would be returned to the Treasury and therefore would count as an increase in revenue.
In recent years, Congress has made a habit of rescinding these kinds of unspent funds just so it can use the increase in revenue to offset the cost of new spending somewhere else in the budget.
That’s dishonest budgeting because, as I mentioned earlier, these rescissions don’t really cut any spending from this year’s budget. They’re not real spending cuts, so they shouldn’t be used as excuses for real spending increases.
Finally, it need to be remembered that rescissions have been used by past presidents...Republican and Democrat alike. Neither Presidents Obama nor George W. Bush rescinded a penny during their time in office, but Presidents Clinton, George H.W. Bush, Reagan, and Carter all did. By far the president to use them the most was President Reagan who rescinded $43 billion worth of spending.
I’m getting into the weeds here, so will stop...but the larger point here is that a rescissions package is a useful tool to slowing spending…but in this instance, a small one in the scope of the spending before us.