4 Means of controlling inflation and government spending

“No taxation without representation” was a powerful rallying cry during the American Revolution, and self-government was a fundamental principle in the founding of the United States. This principle meant that we, the people, could voice our opinions through our elected representatives before a penny of tax money could be spent. This limitation of arbitrary power helped encourage investment, entrepreneurship, and economic growth, transforming the American economy into a global model of innovation and prosperity.

Unfortunately, this essential control of government spending is failing. Each year, an ever-larger portion of the federal budget is no longer as closely scrutinized as it should be.

The budget is divided into so-called “mandatory” and “discretionary” spending, which is financed by taxes and borrowing. To receive funds, discretionary spending must be reviewed annually and voted on in Congress. Mandatory spending, on the other hand, continues automatically – without reconsideration, without debate, without vote. In the 1960s, discretionary spending accounted for about two-thirds of spending. By the end of the 1990s, that share was almost half. Today, it is barely more than a quarter. The majority of spending and funding is now largely unrepresented.

The erosion of this guarantor of fiscal responsibility has led to runaway deficits and crippling inflation. Deficit spending causes inflation because it forces the Federal Reserve to monetize the debt.

Currently, about 11.5% of government spending is spent just on interest payments on the debt. At the same time, inflation has hit the American consumer hard. The average family now needs an additional $11,400 to maintain the same lifestyle as in 2021.

The solution lies in repairing the congressional budgeting mechanisms that once helped make the American economy the envy of the world. Here are four remedies

1. Create a comprehensive budget: All spending and revenue policies should be up for debate and subject to the close scrutiny of our members of Congress. Proposals like the Comprehensive Congressional Budget Act of 2024 would restore real oversight by helping Congress create a real budget from the input of many committees.
2. Presidential accountability: Congress cannot pass annual budgets or security legislation without timely information from the executive branch. Innovative legislation such as the Submit It Act is a step in the right direction. This measure would not allow the president to deliver the State of the Union address before submitting a budget request and national security strategy to Congress.
3. Prevent government shutdowns: The all-too-common drama of government shutdowns is costly political theater that centralizes power and inflates budgets. We can achieve better results by maintaining current spending when no new appropriations legislation is passed, rather than imposing shutdowns. The Prevent Government Shutdown Act does just that, and also requires Congress to remain in session until the appropriations are finalized.
4. Restoring the authority of Congress: Congressional control of the budget means little if all the president can do is declare a “national emergency” and then spend whatever he wants. A bill modeled on the ARTICLE ONE Act would give Congress back authority over federal spending by ending emergency declarations after 30 days unless Congress specifically approves them.