Happy fiscal new year. For budget watchdogs and federal lawmakers, every October is an opportunity. A new fiscal year offers a chance to reflect on the last and a moment to plan for the next. This year our nation’s finances are poor and the system seems broken. But Congress, in part, has itself to blame. To get our finances back in shape lawmakers must look at themselves and resolve to do better.
Fiscally, the nation is unfit. The $32.4 trillion in debt owed to the public alone roughly matches the size of the annual U.S. economy. It’s a level of debt unmatched since the aftermath of World War II, and it’s growing as annual deficits exceed $2 trillion. Add in the $7+ trillion the government already owes itself, mostly in IOUs for the Social Security trust fund, and debt-to-GDP reaches historic levels. With benefit cliffs approaching in Social Security and Medicare and debt-service costs exploding due to rising interest rates, it’s undeniable the fiscal trajectory of the country needs to change.
Like a traditional New Year’s resolution to improve one’s health, a resolution to improve the nation’s finances needs to focus on the most efficient means to do so. Our system of government relies on a separation of powers. That system works best when all three branches are empowered to fulfill their respective roles. But Congress, frankly, has allowed too many of its constitutionally derived powers to atrophy. A lack of exercising these powers has led the other branches to take the reins of policymaking often in ways that greatly impact the nation’s finances. A fiscally fit federal budget will require a Congress dedicated to improving core (constitutional) strength.
First is the Power of the Purse (Article 1 Section 9 Clause 7). “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” There is no duty bestowed on Congress more basic than the right and obligation to manage the nation’s purse strings. But this role is under threat. Directly from the current administration as it seeks to illegally withhold funds that Congress has appropriated. By proposing onerous politically motivated requirements on federal grants. Or by simply shifting funds in defiance of congressional direction. Congress has the tools to undo, preempt, and punish perpetrators of these actions. It just requires a Congress willing to stand up for itself.
Another constitutional muscle that has atrophied is (Article 1 Section 8 Clause 11), the power “To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water.” The United States Congress has not formally declared war since World War II. Instead, most foreign entanglements have relied on congressionally adopted Authorizations for Use of Military Force (AUMFs). But these, at times after the fact, endorsements act more as rubber stamps, leaving not just operational details but the very decision to engage in protracted, all but in name only, wars. And in the current administration, actions, such as the war with Iran, are being taken even without an AUMF. Foreign conflicts impose tens to hundreds of billions of dollars in spending and economic impacts. It’s time Congress reassert its war powers.
A third critical area for Congress to flex is the Tax and Spending Clause (Article 1, Section 8, Clause 1). “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States;” In this area, Congress seems quite active, routinely endorsing changes to the tax code, either through massive bills like OBBBA or special interest laden tax extenders packages. But where they get quiet is on tariffs. Tariffs, duties and imports in 18th-century parlance, are Congress’s job. For decades, through multiple acts of legislation, Congress has authorized the executive branch to modify, impose, or otherwise manage tariffs under certain circumstances. The latest and repeated misuse of this authority by the current administration should compel lawmakers to reassert their role.
New Years are for new opportunities. Lawmakers, both those returning to Washington for the post-election lame duck session and members seated in the 120th Congress beginning in January, must seize this opportunity. Congress plays the key role in establishing public policy and managing our nation’s finances. They have the ability to do it better. It won’t be painless, and it certainly isn’t easy. They just need to focus and build the strength from within.
