Analysts often speak figuratively about “out of control” federal spending, but a House subcommittee hearing this week showed that most federal spending quite literally is out of control.
As in, Congress doesn’t directly control it at all.
Instead, some 84 percent of all federal spending in 2015 (and likely a higher percentage now) consists of what subcommittee chairman Rep. Gary Palmer calls “backdoor spending” that Congress allows without providing explicit annual authority. In all, $3.2 trillion of the total federal budget that year of $3.8 trillion fell into this broad category.
Palmer, chairman of the Intergovernmental Affairs Subcommittee of the House Oversight Committee, commissioned a study by the Government Accountability Office to analyze such spending.
As GAO described it, such spending includes not just the familiar “entitlements” such as Social Security and Medicare, which operate on a sort of autopilot based on fixed formulas for benefits, and not just the hundreds of billions of dollars in annual interest on the federal debt. Those are familiar, and overwhelming, examples of federal spending almost never changed by Congress’ annual appropriations process (and they constituted a rapidly growing $2.3 trillion of the $3.2 trillion at issue) but in themselves, they aren’t news.
Other types of backdoor spending include the contracting authority of five departments to obligate funds without advance congressional approval, the ability of some agencies to collect fees or fines and then spend that money without it reverting to the general federal treasury, and the “borrowing authority” some agencies exercise for uses such as income and price support to agricultural producers. In effect, even agencies subject to annual congressional appropriations have some sort of their own spending on something close to autopilot, and discretion over other parts, without line-item examination thereof by lawmakers.
Individually, it might make sense, or once have made sense, for Congress to allow all this barely reviewable spending. Considered collectively, though, it means that far too much of the federal budget is not being directly managed by those we elect to manage it.
To combat one part of the problem, Palmer has introduced H.R. 850, a bill providing that agency fines and fees go to the general treasury, needing further direct appropriation by Congress, rather than becoming internal piggy banks for the agencies. This is important, as the number of internal agency “accounts” allowing these collections to be re-spent internally rose from 294 in 1994 to 538 in 2015, and the amount of money involved grew (in inflation-adjusted dollars) from $186 billion to $421 billion. If Congress reclaims more direct authority over that $421 billion each year, it might just start to find savings.
If one believes, along with former Sen. Phil Gramm, R-Texas, that we face a growing threat of a debt crisis (partly because, as GAO noted, “net interest on the federal debt is on track to be larger than any other category of spending in coming years due to continued projected growth in federal debt, and expected increases in interest rates”), then it becomes crucial for Congress to have the tools to find savings wherever it can.
Palmer’s attention to this matter is one small, but helpful, step in using the tools it does and should possess.
