The Honest Expenditure Limitation Program (HELP) Act of 2010


On February 1, 2010, President Obama released his Fiscal Year 2011 budget with a funding request of $3.8 trillion.  In it, he announced a three year freeze of discretionary spending for all non-security related agencies at FY2010 levels which amounts to a total spending level of $460 billion each year for those agencies.  Non-security spending is defined as all agencies except for Department of Defense, the Department of Homeland Security, the Department of Veterans Affairs, the Department of State, and one national security related agency at the Department of Energy.  The Administration’s Office of Management and Budget estimates that this initiative will save $250 billion over the coming decade.

On the surface this proposal gives the President the appearance of being fiscally prudent, something the American people have been demanding of their government especially in recent months.  But when I look closely at the numbers he’s presented, it is as clear as day why he’s able to offer this spending freeze without batting an eye.  For one, discretionary spending has increased by 20% in just two years.  Second, the massive $787 billion stimulus package provided substantial spending cushion for nearly every agency, making a spending freeze like the President’s inconsequential.

Additionally, this spending freeze proposal does too little to improve the long term fiscal outlook of our nation. We all know where we stand—at the edge of disaster.  Doug Elmendorf, the director of the non-partisan Congressional Budget Office, recently testified about our nation’s fiscal outlook before Congress.  He did not deliver good news. 

Last year our budget deficit was a staggering $1.4 trillion, which represented about 10% of our total economy.  He expects 2010’s deficit to be only slightly lower at $1.3 trillion – or 9.2% of GDP.  Looking further out, the average deficit between now and 2020 is forecast to be $600 billion per year.  Additionally, CBO estimates that the amount of debt held by the public will skyrocket to $15 trillion by 2020.  If it sounds like a staggering number, that’s because it is. And when you consider the amount of interest that we’ll be paying to China, Japan, and others – it’s embarrassing.  $700 billion each and every year in 2020 and beyond if we do nothing about our rising deficit levels.

Let’s do the math here and put that in perspective.  If $700 billion of interest were paid evenly by every household in the United States today, it would amount to more than $6,000 per household, each and every year after 2020. Put another way, the entire financial industry bailout, which I voted against, was $700 billion, and it falls just short of the $787 billion stimulus package, which I also voted against.  But the $700 billion we could spend on interest in 2020 happens each and every year, and we don’t get anything for it.  It’s just the cost having this much debt in the first place.  At this rate, it will become more and more difficult for the government to fund priorities that are truly important, like national security and infrastructure spending. 

To combat this, several proposals have recently been introduced that I support.  In the House, Congressmen Pence and Hensarling introduced a Constitutional Amendment that would cap federal spending at 20% of the economy.  Additionally, Senator DeMint has introduced an Amendment requiring a balanced federal budget.  I support these endeavors to be sure.  Some of my colleagues support a year-long earmark moratorium.  It was reported on Monday that Speaker Pelosi has suggested a year-long earmark moratorium as well.  My colleagues need to consider a couple of issues in taking about earmarks.  One, an earmark moratorium does nothing to combat the increase in government spending.  Funding that would have been spent in earmarks will simply be spent by Obama Administration bureaucrats.  I suppose it should come to no surprise that Speaker Pelosi supports the Democratic Administration fully funding its own priorities.  Secondly, last year earmarks accounted for 1.5% of discretionary spending.  Where’s the focus on the other 98.5%?  Where’s the focus on what I call bureaucratic earmarks?  Yes, the President earmarks too.  If you don’t believe me, look at an appropriations conference report.  Where’s the focus on the vast majority of discretionary spending which is doled out every year by bureaucrats?  I believe something needs to be done immediately and seriously.  Today I am introducing the HELP Act - The Honest Expenditure Limitation Program Act of 2010.  The bill does three things: (1) It places caps on non-security discretionary spending, which I define exactly as President Obama’s budget does, (2) It enforces the caps by sequestering any spending above the cap through across-the-board cuts, a process that currently applies to mandatory spending but not to discretionary, and (3) It disallows Congress from evading the sequestration cuts through a 67-vote point of order against any attempt to exempt new spending from this legislation.

Rather than simply freezing spending at the artificially high 2010 level for three years and then allowing spending to explode again, which is what the President’s proposal does, my bill will actually cut discretionary spending for non-security agencies back to FY2008 levels of about $400 billion per year.  Spending would then be frozen there for five years through 2020.  So rather than simply freezing spending levels for only three years at an artificially high level, as the President proposes, my initiative would hold the federal government more accountable for the next ten years by creating real, meaningful spending cuts and then placing the cap at the reduced level.

The difference in savings between my plan and President Obama’s plan is clearly displayed on this chart [CHART].  The blue bars represent how non-security related discretionary spending levels will rise over the next ten years if allowed to increase according to OMB’s numbers.  The red line illustrates the impact President Obama’s plan will have if spending is allowed to increase following his three year freeze using OMB’s estimates.  Clearly, the $250 billion in savings is not substantial when spread over a ten year period.  It really doesn’t tighten the belt at all. 

My proposal is represented by the green bars.  Here we phase down the spending levels from their high point in 2010 to a more reasonable level between 2011 and 2015, and then stay flat thereafter.  My plan, when compared to the blue bars of doing nothing, will save more than $880 billion dollars over the next ten years.  Let me say that again, by reducing non-security discretionary spending levels to 2008 levels, and then holding them there through 2020, our nation can save nearly $1 trillion.  When I compare my plan directly with President Obama’s, my plan saves $634 billion more than his.

I have made my estimates using the methodologies of the Obama Administration’s Office of Management and Budget, and they are probably conservative.  First off, if you look at the history of discretionary spending, annual increases are far greater than what we assume here.  Second, we don’t estimate how much we’d be saving in interest by not having to borrow the spending we’re cutting. So overall, this proposal will likely save much more than the nearly $1 trillion we estimate here. 

If we do nothing to curtail skyrocketing government spending, or merely freeze it at artificially elevated levels for a few years, as President Obama proposes, we will find ourselves in a tragic situation. The clock is ticking.  Congress must act.

Some of my colleagues will probably attack this proposal because the hardest thing to do around here is cut spending.  Without cutting spending, we only leave one alternative: massively raising taxes.  That is not what the American People want, and it would harm our economic recovery.

Others may charge that this proposal will harm the government’s ability to help citizens in their time of need.  But what’s important to realize about this spending reduction is that it will have no impact on mandatory spending programs like unemployment benefits, social security, Medicare, and Medicaid. Those programs are in need of reform as well, but this bill affects only the agencies identified by President Obama as non-security. 

My bill, the HELP Act of 2010, would take President Obama’s proposed spending freeze and make it truly impactful.  Rather than merely freezing spending at the inflated levels of 2010 for three years, and then allow spending to explode again, my bill will return discretionary spending levels of non-security agencies to 2008’s levels over a period of five years and then hold them there through 2020, as you can see in this chart.  It actually trims the budget of the federal government, which should come as a relief to most since that’s what state legislatures and American families all across the country are having to do right now.   

We can make a meaningful impact on our deficits and debt right now by enacting my proposal. I hope that my colleagues can join with me to take a step toward fiscal accountability and reform.  I yield the floor.