Real test of Fiscal Responsibility Act will be sturdiness of spending targets

OPINION:

Without taking sides on the wisdom of the debt limit increase (unironically named the “Fiscal Responsibility Act”), a couple of features of the deal and the surrounding conversation are worth noting.

First, let’s think about federal budget outlays. Since the end of World War II, there have been only a handful of years in which federal budget outlays decreased year after year. Not surprisingly, three of those years — 1946, 1947 and 1948 — occurred as the nation wound down from the war. Outlays decreased again in 1965 and, more recently, in 2022 as the federal government came down from the sugar high of COVID-19 spending.

Most importantly, for our purposes, outlays decreased in both 2012 and 2013 as a direct result of the budget sequestration process established in the Budget Control Act (part of the debt increase deal) in 2011. That legislation, which set enforceable — emphasis on “enforceable” — appropriations levels, was the product of negotiation between congressional Republicans and a Democratic president, Barack Obama.

Whatever else you think about the Fiscal Responsibility Act, there is no enforcement mechanism to ensure that federal spending in the next few years will be characterized by modest increases. Indeed, the day before the House vote, Sen. Jack Reed, Rhode Island Democrat and chairman of the Senate Committee on Armed Services, openly discussed how best to get around the newly agreed-upon spending targets.

And despite all the talk about retrieving unspent cash from legislation associated with the response to COVID-19, the amount recovered in the debt limit deal is essentially de minimis — less than $30 billion of more than $5 trillion appropriated. The story with respect to the $87 billion in new funding for the Internal Revenue Service is essentially the same. Despite specifically campaigning on doing something about that particular swarm of officers sent hither to harass our citizens and eat out their substance, the legislation fails to reduce the cash heading to the IRS.

Perhaps the most inexplicable part of the process is that Rep. Garret Graves, Louisiana Republican and one of House Speaker Kevin McCarthy’s negotiators, managed to get the Mountain Valley Pipeline permitted in the legislation. This natural gas pipeline — a prized project for Sen. Joe Manchin III, West Virginia Democrat — has been stuck in permitting limbo for years.

Good for Mr. Graves. But Republicans would be within their rights to ask why, if he wanted to solve permitting problems in specific projects, he didn’t focus on the Keystone pipeline, the Resolution Copper Mine in Arizona, or the Twin Metals project in Minnesota.

The speaker’s other negotiator, Republican Patrick McHenry of North Carolina, chairman of the House Financial Services Committee, was also an unusual choice. As recently as last November, he made it clear that, like President Biden, he preferred a “clean” increase in the debt limit — that is, one without any effort at all to address the addiction that the federal government has to spend cash it doesn’t have.

In short, one of the Republican negotiators was working to make sure Mr. Manchin gets reelected in West Virginia, and the other, up to a few weeks ago, sought the same outcome as the Biden administration.

Finally, it is notable that former President Donald Trump — unlike the other candidates who uniformly expressed their opposition to the deal early and often — managed to avoid taking a stand on the legislation until after the House had voted on it. Not exactly a profile in courage.

A vote for the Fiscal Responsibility Act is certainly defensible. It is possible that the legislation is the best that could be done under the circumstances. It is possible that the spending targets proposed for the coming years will happen. We won’t know for some time.

Similarly, a vote against the Fiscal Responsibility Act is also defensible. Indeed, perhaps the most likely defense that we will see from those who voted against it is that House Democrats made up a majority of the affirmative votes and that Mr. McCarthy could not deliver the 150 House Republicans he promised (there were ultimately 149 Republicans who voted yes). Republicans in the Senate were more skeptical — 31 Senate Republicans voted against the legislation.

But the real test of the legislation will be the sturdiness of the spending targets in 2025 and beyond. Given the rapaciousness of Congress with respect to spending, a healthy skepticism about the durability of those targets seems prudent.

• Michael McKenna, a columnist for The Washington Times, is president of MWR Strategies. He was most recently a deputy assistant to the president and deputy director of the Office of Legislative Affairs at the White House. He can be reached at mike@mwrstrat.com.