The New Budget: Hits and Misses
Last week congressional Republicans reached an agreement on the budget for the year going forward. The proposal calls for reforms to struggling entitlement programs, clamps down on inefficient and ineffective government programs, and lays the groundwork for strong economic growth.
The most important aspect of any budget is whether it is balanced. The FY2016 conference agreement brings spending restraint to the federal government and creates a $32 billion surplus by 2024—meanwhile no new taxes are levied on individuals. This stands in stark contrast to the $1.44 trillion in new taxes requested in the president’s FY2016 budget.
The new Republican budget agreement also maintains the most important conservative victory in the last five years: the sequester caps. The FY2016 Budget maintains the spending restrictions mandated in the Budget Control Act of 2011, ensuring the continuation of the savings from discretionary spending. Here again the Republican budget agreement stands in stark contrast to the White House budget, which ignores 2011 sequester spending caps and raises spending through misleading promises, the Senate budget abides by federal law. It is important to keep these caps in place; caps that have stabilized federal spending since 2011 and will lead to $1.79 trillion in savings through 2021.
Moreover, the economic benefits of the agreement would help spur our sluggish economy. In total, $400 billion would be added directly into the economy over the next ten years, according to The Congressional Budget Office. After years of lackluster growth, it is time to enact fiscal policies that put the economy back to work.
Unfortunately, not everything about the deal is perfect. In order to appease some of the more hawkish legislators, the Overseas Contingency Operations Fund (OCO) has gotten a very generous increase. OCO is the fund that the pentagon uses to fund overseas engagement…theoretically. Though the Pentagon has requested $50.9 billion for OCO, the budget sets aside $96 billion for the same fund. This extra money will go to pad military budgets without ensuring an equivalent offset somewhere else in the budget.
Examples of OCO’s largesse abound. FY2016 has over $500 million set aside for construction projects that would only be relevant to fighting ISIS if the Air Force were to literally drop buildings (presumably flown over by multiple F-35s) on top of Mosul.
Using the Overseas Contingency Operations Fund as a way to skirt the Budget Control Act’s caps is disingenuous and unfair to taxpayers. Fortunately, there are redeeming qualities to be found in next year’s budget.