Congressional bipartisanship shouldn’t lack fiscal responsibility
Photo 161345961 © Christian Offenberg |


Congressional bipartisanship shouldn’t lack fiscal responsibility

Today’s bipartisan action makes the debt challenges we’re imposing on our children and grandchildren even worse.

In previous decades, bipartisan congressional action was often associated with fiscal responsibility. But today references to the bipartisan ‘adults in the room’ too often mean the two major political parties have come to an agreement on unfunded federal spending increases that worsen the nation’s already dire debt and long-term fiscal trajectory.

My recent Reason Foundation analysis showed that the federal government had run budget deficits in 52 of the last 57 years, so any discussion about fiscal responsibility should be viewed in that context. But from the mid-1980s to the early 2010s, the perception of bipartisan policymaking frequently centered around reducing deficits through spending reductions and revenue enhancements.

This approach started with the Gramm-Rudman-Hollings Deficit Reduction Act of 1985 (GRH), which was intended to rein in deficits that blossomed during the Reagan era in the 1980s. The law, which passed with large bipartisan majorities, set steadily declining maximum budget deficits for each of the next fiscal years with a balanced budget mandated for 1991. If the congressionally-adopted budget was projected to be above the deficit target for any given year, the excess would be eliminated through an across-the-board spending cut equally impacting all federal departments and agencies, a process known as sequestration.

Because the executive branch implemented GRH’s sequestration process, courts declared it unconstitutional. Its budget projections also often proved to be too rosy. As a result, deficits continued rising, although perhaps at a slower rate than in the absence of any deficit control legislation.

In 1990, a much narrower bipartisan majority replaced GRH with an omnibus budget bill that increased taxes—famously in violation of President George H.W. Bush’s 1988 campaign promise not to raise taxes— and introduced the pay-as-you-go (PAYGO) rule under which new congressional spending measures had to be offset by new revenues or spending cuts.

Later in the 1990s, deficits briefly gave way to surpluses after Democrats unilaterally passed a set of tax increases and spending reductions in 1993 and a growing economy produced a spike in federal revenues.

Although the 1990s were a time of heightened partisanship, culminating with President Bill Clinton’s impeachment, some Democrats and Republicans continued to collaborate on the issue of fiscal discipline. In 1992, former Sen. Paul Tsongas (D-MA), former Sen. Warren Rudman (R-NH), and philanthropist Peter G. Peterson founded The Concord Coalition to advocate “generationally responsible fiscal policy.”

In the early 2000s, red ink returned with the wars in Iraq and Afghanistan, plus Medicare Part D—and there were more bipartisan efforts to right America’s fiscal ship. In 2010, the Bipartisan Policy Center launched a Debt Reduction Task Force “to develop a comprehensive, bipartisan plan to reduce projected federal debt” co-chaired by former Sen. Pete Domenici (R-N.M.) and Dr. Alice Rivlin, a centrist Democratic economist.

Also in 2010, President Barack Obama formed the bipartisan National Commission on Fiscal Responsibility, chaired by former Sen. Alan Simpson (R-WY) and Erskine Bowles, a former chief of staff in the Clinton administration. The commission’s report proposed entitlement reform and eliminated most income tax exemptions and deductions while lowering marginal tax rates. But the report did not receive the supermajority support of its own commission members that were required to put the package to a vote in Congress.

When Republicans took control of the House of Representatives after the 2010 election, we saw one last effort at bipartisan deficit reduction. Large majorities voted in favor of the Budget Control Act of 2011, which imposed annual discretionary spending caps for fiscal years 2013 through 2021, and provided for a constitutionally-valid sequestration process if the limits were breached. Unlike the Simpson-Bowles Commission, the BCA did not address revenues. Subsequent bipartisan legislation extended and raised the sequestration caps but did not make substantive reforms.

While the momentum toward budget reform stalled, the COVID-19 pandemic ushered in an era of bipartisan support for massive deficit spending. In 2020, Democrats and Republicans enacted over $3 trillion of COVID-19 stimulus and relief without any offsets. This series of spending bills signed by President Donald Trump and President Joe Biden led to record-setting, multi-trillion-dollar deficits in 2020 and 2021 and contributed to the inflation the country is now experiencing.

The current Congress, although highly contentious, has seen some bipartisan action, but the most consequential measures attracting support from both parties have increased budget deficits. The Infrastructure Investment and Jobs Act added the most red ink. The Congressional Budget Office estimates the bill will add $256 billion in deficit spending over the 10-year budget window.

Two other bipartisan measures — the Consolidated Appropriations Act of 2022 and the Additional Ukraine Supplemental Appropriations Act — are expected to add another $54 billion of deficit spending.

This summer, Congress is debating the bipartisan Creating Helpful Incentives to Produce Semiconductors (CHIPS) legislation which would provide $52 billion of subsidies to encourage domestic production of computer chips. Once again, this bipartisan legislation does not include any revenue or expenditure offsets.

Admittedly, the deficit impact of these bipartisan bills is dwarfed by the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act signed by President Donald Trump and the $1.9 trillion American Rescue Plan Act signed by President Joe Biden, but they illustrate the concerning move toward bipartisan spending rather than bipartisan fiscal responsibility.

Today’s bipartisan action makes the debt challenges we’re imposing on our children and grandchildren even worse.

Fixing the nation’s infrastructure, helping Ukraine, or encouraging domestic semiconductor production may be valid policies deserving of bipartisan support. But in a previous era, Democratic and Republican negotiators may have at least tried to find some new revenues or spending reductions to offset the fiscal impact of these bipartisan spending initiatives. Unfortunately, today’s bipartisan priorities completely lack any interest in fiscal discipline.

With inflation rising and a growing number of Americans blaming government policies and stimulus spending for some of the price increases they’re experiencing, perhaps political momentum can eventually shift back toward a bipartisan righting of America’s financial ship.

For now, since neither political party is showing serious interest in meaningful entitlement and federal budget reforms, maybe they can take bipartisan baby steps toward fiscal responsibility by requiring spending offsets or revenue increases for all new spending.

A version of this column was first published in The Hill.