As Summer heats up, lawmakers in Washington have an opportunity to get their legislative bodies in shape. The looming debt ceiling, 2026 appropriations process, and negotiations on the poorly named “One Big Beautiful Budget” reconciliation bill will require Congress to flex their spending oversight muscles. What we’ve seen so far, however, indicates that if taxpayers want the nation in a stronger financial position, lawmakers need a new approach to how they exercise their constitutionally derived power of the purse.
House Republicans this week made their first major spending move since passing their reconciliation package, by adopting the spending rescissions package requested by the President. Wherever you stand on the merit or appropriateness of the president’s $9.4 billion rescissions requests, the process is an important tool for adjusting spending that was created in the Congressional Budget Reform and Impoundment Control Act of 1974. Sometimes Congress provides more spending authority than is needed to meet a need or fund a program. Perhaps events on the ground change and funds that were previously appropriated no longer rise to the same level of importance. By making a formal rescission request, Congress and the President have the chance to re-engage the spending process during the current fiscal year. It can be an exercise in fiscal responsibility.
This particular package, however, is not a profile in fiscal courage. The items included are the lowest of low hanging fruit for many Republicans—foreign aid and public broadcasting. While various lawmakers have raised concerns with some of the cuts, conservative budget proposals and the president’s past budget requests frequently call for elimination of these accounts. And their elimination polls as widely popular amongst the Republican base. These kinds of cuts don’t require most elected Republicans to exert much, if any, political effort or risk. The bill squeaked through the House 214-212.
Importantly, even if the Senate votes in favor and the bill is enacted, it’s not going to even slightly shift the spending needle. Rescissions are backward looking and limited to funds appropriated on the discretionary (annual) side of the ledger. They are an important tool, but not a key driver to fiscal responsibility. And not something that is even allowed to affect funding on the real drivers of our deficits—mandatory programs that account for two-thirds of the federal budget.
A tool that can fundamentally move the spending needle is the budget reconciliation process, and this week’s steps in the Senate indicate that needle is moving, but in the wrong direction. Senators engaging in the process are having a hard time coming up with anywhere near the level of spending reductions the House included in their bill. And they are intent on even larger revenue reductions which would be like pouring gasoline on the deficit fire.
House Members are so concerned their Senate colleagues will fail to pull their weight that 38 of them sent a letter to Senate Majority Leader Thune (R-SD) imploring him to maintain the framework of the bill and match any additional tax cuts dollar-for-dollar with additional spending reductions.
It should come as no surprise that the Senate is having a hard time. Remember the Senate isn’t even pretending to pay for their package and their reconciliation instructions actually allow for even higher spending than the House’s. The reconciliation instructions for the Senate allow up to a $500 billion increase in spending for agencies responsible for defense and border security, $1.5 trillion in new tax cuts from the president’s campaign promises while mandating a mere $4 billion in spending cuts. While this sleight of hand is fiscally dishonest, it is politically advantageous. Freed from having to pay for the TCJA extension, they can instead come up with new tax breaks intended to score political points. It doesn’t take a math major to know that $1.5 trillion plus $4.5 trillion in revenue reduction plus $500 billion in more spending vastly overwhelms a relatively paltry $4 billion in cuts.
Lawmakers’ inability to pull their weight shows a need for a different process. Partisan processes lead to partisan outcomes. It’s time to reconsider a bipartisan, bicameral fiscal commission. Just last year the House Budget Committee Chair and Ranking Member proposed such an effort. By centralizing deficit reduction discussions within a dedicated commission, we can more effectively scrutinize the federal budget, identify waste, evaluate potential reforms, and propose effective, data-driven solutions. We’ve got to change the approach to how we work out our fiscal management if we want a different result.
