Government Must Switch to Zero-based Budgeting
Right now, the government spends more and more money on X, Y or Z program, and the standard operating procedure is to maintain the status quo.
An unused parking garage in Maryland for $120 million? Go for it. Half a billion for a faulty health care website? Why not?
Is it any wonder our national debt has raced past $17 trillion?
Perhaps it’s time for the federal government, which has no problem wasting taxpayer money, to get a crash course from financial advice guru Dave Ramsey – the king of “no debt.”
Currently, the federal government relies on what’s called “incremental” budgeting, which carries over costs from the previous period as a given.
It relies on rolling over programs from year to year with little review or scrutiny of cost, which allows it to spend more taxpayer dollars and balloon our deficit and debt with little accountability.
The actual need for the programs is rarely questioned, their duplicity never challenged, their ability to carry out their designed task ignored.
This apparent simplicity, however, pales in comparison to the ruinous path tread by our gluttonous spending on wasteful programs.
It turns out President Ronald Reagan’s observation was right: “Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth.”
But the House has acted to pursue a path to fiscal sanity. H.R. 1871, which I voted for in the House, would require the Congressional Budget Office to use “zero baseline” budgeting when making projections about our nation’s discretionary spending.
So what is “zero baseline” budgeting?
When completing a zero-based budget, the income minus the expenses must equal zero. Dollars come in, and they’re matched against dollars going out. Every dollar has a job. Every dollar is accounted for, even savings.
Every budget period, each and every expense is reevaluated and must be justified. Every line of the budget must be approved, not just what’s changed from the period before.
Many make a budget fearful of what they’ll uncover, fearful of finding out what they’re actually spending their money on. It’s only natural.
But this simple tool can help even the worst spendthrift. This isn’t a novel concept. Ramsey is a fan of this approach. To reach that baseline zero, he recommends eating out less, buying a used car instead of a new one and shutting off the lights when you leave the room to cut down on utility bills.
Now, following a budget doesn’t have to feel like putting on shackles. Just like personal budgets help people save money for a home or college education, a federal budget – when followed – can help the federal government know where the money it spends is going and prioritize it. It’s imperative for the federal government to embrace a zero-based budget (or a variation of it).
Does the prospect of starting from zero every year daunt lawmakers? Try re-evaluating it every five, then.
Is the proposition of dragging the entire federal government to examine its spending each year overwhelming? Then stagger when each agency must tackle its budget. Or how about launching a pilot program at the Department of Energy, for instance, and then duplicating best practices elsewhere?
Let’s not let the inertia of “this is the way it’s always been done” hinder real reform, nor let the perfect get in the way of the good.
Families with less take-home pay each month are forced to reevaluate their budgets and spending on a monthly or even weekly basis, determining if certain items, like cable TV or investing in a new suit, are a necessary and worthwhile expense for that pay period.
The federal government – shackled by debt exponentially greater than the American family – must do the same. Let’s scrutinize where every last penny of American taxpayer dollars goes. Let’s turn off the spending autopilot.
Randy Hultgren represents Illinois’ 14th U.S. Congressional District. This piece originally appeared in the DeKalb Daily Chronicle.