The Good, the Bad, and the Bipartisan Budget Act of 2013

On December 26, 2013, President Obama signed H. J. Res. 59, the Bipartisan Budget Act of 2013, which sets a two-year budget for fiscal year (FY) 2014 and FY 2015.  Although H.J. Res. 59 included some positive provisions, on the whole, it is an ugly deal for taxpayers. 

The most disheartening element of the budget deal is the abandonment of sequestration spending levels that were codified by the 2011 Budget Control Act (BCA).  H. J. Res. 59 increases discretionary spending by $63 billion above the $967 billion FY 2014 BCA level, split evenly between defense and non-defense accounts, with $45 billion of that applied to FY 2014 and $18 billion to FY 2015.  The $1.012 trillion cap in FY 2014 is not only $45 billion above the $967 sequester cap for FY 2014, it is also $26 billion above the $986 billion level set in the continuing resolution (CR) that expired on January 15, 2014.

If Congress had not agreed to any budget deal, spending for FY 2014 would have decreased by $20 billion, all of which would have gone toward deficit reduction.  Unfortunately, Republican defense hawks were unable to stomach a two-year cut of $31.5 billion to the Department of Defense (DOD), which has a combined two-year budget of $1.042 trillion for FY 2014 and FY 2015.  As Citizens Against Government Waste (CAGW) and others have pointed out, $31.5 billion is chump change compared to the total amount of waste at DOD and such a reduction would not have had a negative impact on national security.    

The budget deal did include some positive changes for taxpayers.  Notably, the enactment of H. J. Res. 59 marks the first time since April 29, 2009 that the House and Senate agreed to a budget.  CAGW has advocated returning to the regular order budget process and moving away from the irresponsible practice of budgeting through short-term CRs. 

Other favorable provisions of the bill include:

• Increasing pension contributions paid by federal civilian workers hired after Jan. 1, 2014 by 1.3 percentage points.
• Restricting access to Social Security death records, which are used by identity thieves to file fraudulent tax returns.
• Increasing the premiums paid by corporations to the Pension Benefit Guarantee Corp
• Eliminating the requirement that the Maritime Administration reimburse other federal agencies for any extra costs associated with shipping food aid on U.S. ships.
• Increasing Treasury Department access to prison data to prevent prisoners from claiming improper payments.
• Gradually reducing the automatic, annual cost-of-living benefit increase for military retirees under the age of 62.  

Everyone agrees that sequestration was not the most effective method to reduce wasteful government spending and then-record budget deficits.  However, if members of Congress were concerned that sequestration discretionary spending levels were insufficient, the solution should not have been to increase both spending and revenue, but rather to trade cuts in entitlements and/or cuts in wasteful spending to fund essential discretionary spending within the caps.

Recommendations to eliminate waste, fraud, abuse, and mismanagement are regularly provided by the Government Accountability Office, the Congressional Budget Office, members of Congress, and the President in his annual budgets.  Private-sector think tanks, advocacy groups, and companies also continually analyze federal expenditures.  For example, CAGW’s 2013 Prime Cuts contains 557 recommendations that would save taxpayers $580.6 billion in the first year and $1.8 trillion over five years.  GAO has issued three annual reports that identify more than a thousand duplicative and overlapping programs.  According to Sen. Tom Coburn (R-Okla.), $295 billion could be saved annually be eliminating the GAO-identified duplication and overlap. 

In the coming months, Congress will face numerous opportunities, such as the Farm Bill, the highway bill, and the Water Resources Development Act to save tens of billions of dollars by reducing mismanagement and duplication.  Given the failure of lawmakers to preserve the BCA spending caps, it is even more essential that Congress take full advantage of these golden opportunities to achieve substantive, long-term deficit reduction.

  — P.J. Austin