About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

1 Washington News 1 (1985)

handle is hein.tera/wingnews0038 and id is 1 raw text is: W*A*S HI N *G *T*0 N
N EWS

Volume 1, Number 1

Lifting the Lid on
Washington's New Spend
and Spend, Tax and Tax,
Formula-And its Effects
Grassroots pressure on the
incoming 99th Congress to bring
Federal spending under control
will lead to a spate of proposals
to decrease spending while in-
creasing taxes. But a look at
the last few years gives the lie
to this balanced approach. The
brokering process in Washington,
whereby spending cuts are tied to
tax hikes, is a trap. The brok-
ers renege on promised spending
cuts. In 1982, a deal was cut
for $3 of spending reductions for
every $1 of tax increase. End
result? Thirty cents of spending
cuts for every $1 of tax in-
crease. In 1984, we got 24 cents
of cutback for every $1 of tax
increase, and much of that was a
bookkeeping flimflam in Medicare.
Americans don't understand
what is actually going on with
the spending and tax policies of
their Federal government. The
policies are complicated, and
they're rendered incomprehensible
by purse politics--budget resolu-
tions that bear no relationship
to real spending and appropria-
tions, reconciliations that
require cuts that are never
realized, entitlement programs
that are financed without any
legislative action or oversight,
tax deals cut behind the scenes
with little consideration for the
long-run impact on our business
community or quality of life.
PURSE POLITICS
Politicians are masters of
the big disguise; we are the
victims--individually and as a

1                                                                                          1

EXECUTWESUMMARY
The pressure to bring Federal
spending under control will lead
to more proposals coupling spend-
ing cuts and tax increases, but
the experience of the last few
years clearly shows that while
the tax increases are enacted,
the spending cuts are not.
The budget problem is both an
administration and a congression-
al problem, with three aspects
that prevent taxpayers from know-
ing that no real steps have been
taken to control the budget:
1. The construction of the
document itself.
2. The congressional rules
of procedure. which allow
Congress to shield actual
spending activities.
3. The vast complexity of
individual agency and
program budgets.
We need clear,. straight-
forward analysis of program costs
and agency spending to show where
our money goes so we can compare
this with where we want it totgo.
The Tax Foundation, Incorpor-
ated, which has successfully
carried out such work on an
item-by-item basis in the past,
is now producing this needed
analysis as part of a compre-
hensive new Federal spending
review.

February 1, 1985

society. And the disguise be-
comes increasingly effective as
the government becomes ever more
adept at hiding the real situa-
tion; a budget gone totally awry
and tax and spend policies that
could drive our economy into yet
another recession just as we are
recovering from over a decade of
stagflation.
We know that the Federal
budget process is out of con-
trol. Federal expenditures are
soaring to new heights, on the
verge of passing the $1 trillion
mark in 1985. The gap between
revenues and expenditures does
not diminish despite tax in-
creases. The question is, Why?
Congress is greatly to blame
in spite of electioneering and
finger pointing to the contrary.
As laid out in the Constitution,
Congress has the Power to lay
and collect taxes, duties.. .to
pay the Debts and provide for the
common Defense and general Wel-
fare... to borrow Money... to coin
Money.... And No money shall
be drawn from the Treasury but in
Consequence of Appropriations
made by Law; and a regular State-
ment and Account of the Receipts
and Expenditures of all public
Money shall be published from
time to time. Have no doubt.
The budget problem is a congres-
sional problem, not just an
administrative problem, in spite
of attempts to lay it at the door
of the Presidency.
THE ADMINISTRATION'S ROLE
Presidential spending initia-
tives and budget requests do have
an influence on the programs that
are financed by our freewheeling
Congress, but the bottom line is
that a majority of the budget is
not new. Each year, the White
House and Congress argue about

Copyright 1985 by Tax Foundation, Incorporated, One Thomas Circle, N.W., Suite 500, Washington, D.C. 20005 (202) 822-9050

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Already a HeinOnline Subscriber?

profiles profiles most