Summer Reading: Budget and Spending

It was a productive August for the Taxpayers Protection Alliance (TPA), providing Congress with reading material during their August vacation with the 2015 Summer Reading series (click here for more). The final installment for this summer focuses on what’s ahead for lawmakers in September with the looming budget deadline of September 30. The House and Senate have major work to do in order to pass a spending bill that will keep the government funded to avoid a shutdown.  And, as usual, there won’t be much time for them to get it done.  In fact, Congress will only be in session for 12 days in September, making the budget deadline more ominous.

Let’s start with how Congress ended up in this familiar situation. The last several years have been marked by multiple stop-gap spending measures that seem to get passed at the last minute. This has been a trend because the annual appropriations bills never made it out of both chambers. Though the House has been working to pass all the needed appropriations bills, the Senate has failed to pass spending bills.

The government will run out of money at the end of September, so there will have to be some kind of funding bill passed in order to avoid a shut down. There are some key issues driving the debate over what any short-term funding package will look like, but TPA is calling on Congress to avoid using this must-pass legislation as a vehicle for irresponsible spending.

The most preferred way to resolving the budget impasse is for both chambers to pass appropriations bills; but that option is no longer on the table. Another option would be a major budget deal; that is also off the table due to the lack of time before government funding expires. In lieu of those two preferred pathways, House and Senate leaders will likely move another short-term spending measure that will fund the government from anywhere from one day to a year. TPA has some major concerns over what could potentially happen during this process so here is what Congress should and should NOT be doing when putting together this short-term package.

Congress should stay within the spending caps:

The spending caps set forth by the Budget Control Act (BCA) and implemented through sequestration are the first nominal (real) cuts in spending that the federal government has seen in decades. Those spending caps are one of the few successes that fiscal conservatives have achieved under President Obama. It is critical those spending caps are retained. It is bad enough that they broke the limits set forth by the BCA once, but to do so again would be nothing short of unacceptable.

Congress should NOT add any earmarks:

Though the conventional wisdom has been that earmarks are a thing of the past, TPA has been uncovering billions of dollars in wasteful and unwanted spending by Congress through earmarks for several years. Last year alone, the Cromnibus was filled with $13 billion (click here for a full list) in defense appropriations earmarks. Congress shouldn’t be using must-pass bills to spend billions of dollars for pet-projects that agencies neither want or need.

Congress should extend the moratorium on Internet access taxes

TPA is continuing to call for the permanent extension of the moratorium on internet access taxes. This is a critical issue and Congress should stop passing only temporary extensions and give online users nationwide the assurance of knowing they won’t have new taxes imposed upon them, simply for using the Internet.  Allowing the moratorium to expire would mean a tax increase for millions of Americans.

Congress should include Gift Tax clarification language:

Another issue that Congress has yet to move over the finish line is the Gift Tax. Passing H.R. 1104, the Fair Treatment for All Donations Act sponsored by Rep. Peter Roskam (R-Ill.) would prevent the Internal Revenue Service (IRS) from any future targeting of nonprofits in a selective way.  It would also provide clarity for how charitable donations are handled by the tax code, eliminating the risk that nonprofits face with potential new taxes on donations.

Congress should NOT reauthorize the Export-Import (Ex-Im) Bank:

Throughout the entire first half of 2015, the discussion on the Ex-Im Bank was focused on how proponents of the poster child for corporate welfare could save the needless New Deal-era agency. Much of the talk in the second half of this year from the crony capitalist members of Congress has been on how to bring Ex-Im back from the dead. The House has held firm on not holding any votes to reauthorize Ex-Im, and there is no reason for any spending bill to come to the floor in September with any such provision attached. The crony bank is dead and it should stay dead. Taxpayers don’t need to waste another dollar on an agency that even President Obama said was “Little more than a fund for corporate welfare.”

The items outlined above are the best way to move forward on any stop-gap budget bill that Congress will have to pass by the end of September. The budget battle over the next few weeks will be important and will also happen very quickly, so TPA will be paying very close attention to all developments as they occur.