How Conservative Spending Bills Should Cut the Size and Scope of Government

Blog Articles · Jul 19, 2023

Fiscal Year 2024 Appropriations: Policy & Spending

Year after year of runaway federal spending and weaponized power grabs by the Left have paved the way for our current economic state. Annual budget deficits are at record levels, a self-inflicted inflation crisis caused a destructive increase in interest rates, and we now own a historic national debt exceeding $32.5 trillion. As Congress undergoes another year of debate on federal spending, both the policy and funding levels should reflect the priorities of who that money came from in the first place: American taxpayers.

Setting the Policy: Congress Must Protect Taxpayer Dollars From Biden’s Political Agenda

The Biden administration’s continued abuse of federal rulemaking authority has resulted in taxpayer-funded agencies advancing a large-scale political agenda of unprecedented impact and scope. Exercising Congress’s Article I responsibility to fund government functions and programs involves more than simply appropriating money to the executive branch to spend however they see fit.

Recognizing this, Republicans must push back against the administration’s politicization of federal agencies in the Fiscal Year 2024 (FY24) appropriation bills. To date, all appropriation bills advanced through the House Appropriations Committee include key pro-life provisions to prevent taxpayer dollars from being used to access abortion. The committee also advanced several other funding limitations to prevent political overreach. Examples include: dismantling DEI offices, trainings, and programs; restricting partnerships and agreements with China and affiliated entities; protecting against religious discrimination; defunding policies that enable the illegal immigration crisis; restricting funds for “gender affirming care”; reducing burdensome, misguided climate regulations; eliminating funds for the World Health Organization; and many more.

These efforts to reclaim congressional authority through the appropriation process are an important responsibility. As Congress continues considering spending bills this year, conservatives must work to maintain these and other strong policy provisions aimed at protecting taxpayer dollars from Biden’s political agenda.

Setting the Spending Levels: Congress Must Rein in the Size of the Federal Government

After a surge of inflation fueled in large part by wasteful and fraud-riddled stimulus spending, Americans are pushing for spending bills that meet the moment—this means passing a budget that actually spends less money and reduces the deficit. Following the recent debt limit deal establishing caps on certain federal spending, the House Appropriations Committee announced it would draft all the upcoming non-defense discretionary spending bills at a level lower than those established in the agreement. However, this stated reduced topline spending is coupled with the use of “rescissions” (canceled spending previously provided by Congress) in programs where little to no money would have otherwise been spent—leading to increased spending while technically not counting toward those stated caps. This means that true federal spending for FY24 would still be comparable to the inflated level of FY23, and the size of the federal government is not being reined in.

How We Got Here:

The recent debt ceiling negotiations between Congress and the White House resulted in the Fiscal Responsibility Act (FRA), establishing FY24 spending caps totaling $1.59 trillion. The bill also included budgeting maneuvers that could be used to make up to $54 billion in additional spending available, bringing true total discretionary spending above $1.644 trillion—which is more than FY23 levels. Raising spending to $1.644 trillion in the FRA is achieved by classifying what would normally be “emergency” spending and thus not subject to caps, along with a variety of other budget gimmicks such as “cuts” that do not actually reduce spending.

Many conservatives were right to assert that the spending levels set forth in the FRA were too high and pushed for the House to use the appropriation process to reduce spending. As a result, the spending plan laid out by the House Appropriations Committee establishes discretionary spending at $1.471 trillion for FY24, which appears to be $119 billion less than the caps outlined in the FRA and $131 billion less than the current fiscal year.

All of these reductions proposed by the House Appropriations Committee would be applied to non-defense discretionary spending (defense spending is not being cut). The committee also plans to rescind, or “clawback,” roughly $115 billion from previously enacted - but still unspent - funding. Congress is right to claw back wasteful spending and the Heritage Foundation has recommended additional woke and weaponized programs ripe for rescission, amounting to billions of dollars in savings.

But here’s the catch: That $115 billion in clawbacks is outside the regular appropriation topline number, or cap, established by the committee and will be repurposed to offset spending—bringing actual FY24 spending level much closer to the $1.59 trillion level in the FRA. In essence, the House Appropriations Committee’s current plan isn’t cutting the size of government—it is using unspent funds from previous years of Democrat pet projects to pay for the current size of government at relatively similar levels to last year. The trajectory of government spending is not being changed, and the size of government is not being reined in under this current plan.

Trajectory of Spending:

The economic effects of the growing national debt and recklessly high deficits are already hammering the American public. The trillions of dollars of COVID-19 emergency response spending, slow economic growth, passage of the catastrophic Inflation Reduction Act, ongoing military aid to Ukraine, and the resistance from lawmakers to address the budget deficit have resulted in a national debt (held by the public) that is $4.6 trillion higher than the CBO projected it would be at this time before the pandemic.

This trajectory of spending is expected to push the annual budget deficit to more than $2 trillion in the coming years. Coupling this reckless spending with the increased interest rates, payments on the national debt cost more than they have in decades as a share of the economy. This means the U.S. will look to borrow even more money just to make payments on current outstanding debt. In this context, deficit reduction is both a way to prevent economically catastrophic levels of debt and taxation in the long-term, and a short-term necessity to stabilize the economy. The FY24 appropriation bills offer an opportunity to make necessary cuts and eliminations across the federal government—using recissions to reduce the deficit rather than plus up agency spending.

Roadmap for Real Spending Cuts:

The current fiscal year (FY23) ends at midnight on September 30, 2023. Congress will soon enter its August recess, with the House scheduled to return to Washington on September 12th and the Senate on September 5th. Congress should not wait until September to develop a plan to right-size the government and reduce the deficit. Conservatives have already charted the course.

The Heritage Foundation’s Budget Blueprint provides over $12 trillion in potential deficit reduction over 10 years, with savings compounded over time through enhanced economic growth and lower interest costs. This is possible by targeting wasteful spending, corporate welfare, unnecessary handouts to state and local governments, economically disruptive subsidies, and programs that were created for or captured by the Left.