Balanced Budgets and Regulatory Budgets

The Joint House-Senate Conference Meeting on the federal budget has begun. Chairman Tom Price of Georgia remarked:

Completing a budget is one of Congress’ core legislative responsibilities. It helps ensure we are embracing our Constitutional power of the purse and legislating in an orderly manner….we must remember that a budget is more than just a set of numbers. It is a reflection of our priorities and vision for how we can achieve real results and move our country in the direction of greater opportunity, economic growth and a safer and more secure nation – one where Americans have the best chance of achieving their dreams for the future. 

The basic plan purports to just barely balance the budget within 10 years. We’ll have a $6 trillion annual fiscal budget under Obama in 2025—but it’ll be at least $5 trillion under Republicans. Under Obama’s plan, we’re going to spend $49.3 trillion between 2016 and 2025; Republicans, $43.1 trillion. 

The initial Republican plan released in February promised to get rid of Obamacare. However, Republicans are running away from that despite pre-election promises and can be counted on this summer to advance legislation embracing fundamental premises of Obamacare (even keeping “kids” on the parents’ policy until age 26 by force. Take a look at Los Angeles Times: “Obamacare Repeal Falls Off Republicans's To-Do List as Law Takes Hold.”)

This issue alone assures no balanced budget in 10 years, as does the inevitable one-upsmanship among Republicans to spend more on defense.

For future entrepreneurial progressives, the summer 2015 cave-in on Obamacare will remove key barriers to single-payer for some future Congress when the mixed approach fails. If Republicans are choosing government controls, then they are choosing government controls.

As I’d noted in a recent column, this a good time to pause and marvel at just how big the federal government has become. Even under the Republican plan, by 2019 we re-enter the $4 trillion spending levels we saw during the height of downturn and stimulus days.

The deficit for the year that just ended was $485 billion; OK, that’s better than the trillion dollar deficits between 2009 and 2012. But Obama’s budget sends the deficit back to $600 billion in FY 2016—then beyond. The CBO is reckoning the deficit will exceed $1 trillion again by FY 2025.

This never-ending deficit is what Republicans say they want to address. But the Republican plan has a lot of cutting to get their $13 billion surplus in 2024. This is not the Republican House of the 1990s that promised to get rid of departments like Energy and Education, and present an agenda for privatization.

Yet part of the answer is fundamental economic liberalization of that very kind. In flexing balanced-budget biceps, the Congress must not neglect the greater “core muscles” problem of federal regulation of the economy, of red tape, of illegitimate federal expansion into areas like the Internet (“net neutrality,” antitrust, and the looming bipartisan centralization of “cybersecurity” ).

Federal reach extends well beyond the taxes, deficits and borrowing that utterly dominate policy discussion. Regulations affect the economy by hundreds of billions in addition to the deficits that monopolize debate. Obviously Congress must address spending threats like the entitlement crisis, but even that time bomb can be defused by cutting red tape and getting the economy healthier. When jobs are abundant, Americans help themselves, their families, and better provide secure retirements and health care for themselves.

Spending cuts will make this administration deploy its “pen and phone” to regulate the private sector to carry out “transformation” instead. So: the cuts must be made, but policymakers must simultaneously assure no regulation (or agency “guidance document” or “memo”) becomes law unless Congress affirms it.

The REINS Act (“Regulations from the Executive In Need of Scrutiny” from Sen. Rand Paul and Rep. Todd Young) would do that.

This House has already passed important measures like the Regulatory Accountability Act (H.R. 185), and it needs to proudly collect some Obama vetoes on these and more job boosting reforms.

Since we’re in budget season, the time has come to consider a “Regulatory Budget.” Republicans clearly believe capping what the federal government can spend matters for the economy and individuals. But capping what the government can force the private sector to spend matters, too. The last Congress saw regulatory budgeting proposals from Sen. Marco Rubio and Sen. Mike Lee that should re-emerge.

As healthy as the fiscal budget debate is, it says here that reforming the regulatory state matters even more—and improves the environment for getting spending under control. So balance the fiscal budget, but don’t neglect the regulatory “budget.”

The cost of regulation, too, borrowing the words of Chairman Price, “is more than just a set of numbers. It is a reflection of our priorities and vision.”