As Congress begins consideration of the fiscal year (FY) 2021 budget resolution, which would adopt President Biden’s $1.9 trillion plan and set spending targets through FY 2030, taxpayers should hold onto their wallets.
Passage of this unnecessarily exorbitant legislation would increase the total spent on pandemic “relief” to more than $5.7 trillion, even though more than $1 trillion remains unspent from the five prior bills enacted into law. Outlays in FY 2021 of $6.14 trillion would be more than twice the average amount of money spent during the eight years of the Obama-Biden administration. The national debt will increase by 50 percent over 10 years.
H. Con. Res. 11 and the Senate version of the bill, both of which include the full Biden Budget, are not traditional budget resolutions. Indeed, the budget and appropriations process for FY 2021 has been completed. The resolution’s sole purpose is to trigger the reconciliation process and rush through the president’s misguided proposal on a partisan basis, making it the first such response to the COVID-19 pandemic.
Vaccination numbers are rising rapidly, and the Biden administration has promised a significant increase in availability in the next 100 days. COVID-19 cases and hospitalizations decreased for the second week in a row as of Jan. 28, by 17 percent and 10 percent, respectively. More vaccines and lower cases and hospitalizations will be a natural and far less expensive stimulus to the economy. As further evidence of the need to reject the Biden Budget, the Congressional Budget Office estimates that economic growth will return to pre-pandemic levels by the middle of 2021 with GDP increasing by 3.7 percent by the end of the year, and the labor force will completely recover by the middle of 2022 without any of the $1.9 trillion.
The most wasteful and unnecessary provision in the proposed budget is the $350 billion provided for state and local governments. According to the Treasury Department’s most recent interim report on CARES Act spending, which provided $150 billion for that purpose, only three states have spent more than 50 percent, 23 states have used less than 10 percent, and 11 of those have used less than 5 percent of that money.
Several states that are clamoring for more money have not only failed to use all funds prior to the Dec. 31, 2020 deadline, they are also in excellent financial condition. For example, the West Virginia state auditor’s office reported $668.5 million in unspent CARES Act funds as of Feb. 1, 2021, or 53.5 percent of the initial $1.25 billion. The state had a $28 million budget surplus in fiscal year 2020 and has a $174 million surplus through the first five months of fiscal year 2021, nearly 5 percent above the same time in the prior fiscal year.
Yet West Virginia Gov. Jim Justice (R) channeled his inner Robert Byrd, the late senator from the Mountain State who purloined more than $2 billion in earmarks, when he said that we need to “go big” and “if we actually throw away some money right now, so what?”
In Wisconsin, Gov. Tony Evers (D) claimed in November that the state needed more help, even though there was a $1.2 billion positive balance in the general fund at the end of fiscal year 2020 and tax revenue was up by 50 percent in the first quarter of fiscal year 2021. The state was able to add $105.8 million to the Rainy-Day fund and reduce tax rates for the two lowest brackets.
And California, which was clamoring for more help from the federal government after Gov. Gavin Newsom claimed in May there would be a $54 billion deficit in fiscal year 2020, began fiscal year 2021 with a $15 billion surplus. There are many other states with surpluses, most of which do not have their hands out begging for more money they do not need.
Republican senators were completely justified in excluding another penny to state and local governments in the $600 billion proposal they presented to President Biden on Feb. 1. If the states cannot spend $150 billion in a timely and effective manner, they will certainly fail to spend more than twice that amount efficiently.
Starting the 117th Congress with the passage of H. Con. Res. 11 is not a path to unity; it is a road to fiscal ruin for taxpayers. It does not target money to those most in need; it just spends money. Taxpayers should be very wary of the Biden Budget.
Tom Schatz is president of Citizens Against Government Waste (CAGW), which seeks to eliminate waste, mismanagement, and inefficiency in government.