You read that right: Today, 86% of all federal spending is on autopilot and does not require annual approval from Congress. Only 14% of federal spending now requires approval by Congress, according to a new report from the Government Accountability Office (GAO), the federal auditing agency.
That report studied federal spending in 2015 when the government spent $3.7 trillion. Of that amount, $3.2 trillion, or 86%, did NOT require authorization by Congress. Only 14% had to be approved by Congress. Sounds crazy, doesn’t it? And it is!
No wonder federal spending is out of control. Budget deficits are now projected to be $1 trillion a year or more as far as the eye can see, according to the Congressional Budget Office – starting next year most likely or at the latest in 2020.
The budget deficit spiraled to $779 billion in FY2018, up 17% from the prior year, and significantly above the CBO’s prediction in 2017.
You’re probably wondering how in the world did we get to the point that 86% of federal spending is on autopilot, not requiring congressional approval. Here’s why.
Over the years, Congress has passed more and more laws that allow federal spending without any annual congressional approval. The biggest chunk is for so-called “entitlement programs” like Social Security, Medicare, Medicaid and welfare. Congress provided these programs with “permanent appropriations.” Spending levels are set automatically, based on eligibility rules, benefit amounts and cost-of-living adjustments.
Most people know about these programs. In 2015, they accounted for $2.6 trillion in spending authority. Over half of Americans receive some monthly payment from these entitlement programs and/or other government agencies.
Making matters worse, Congress has granted numerous federal agencies a variety of other ways to spend money without having to get approval from lawmakers each year. As the GAO notes, these include contract authority, borrowing authority and “offsetting collections.” Offsetting collections refers to fees, fines, charges for permits, etc. collected by government agencies. Congress typically lets the agencies spend that additional money on their own without formal approval.
Explosion in Spending by Irresponsible Lawmakers
Over the years, this kind of autopilot spending authority exploded from $1.7 trillion in 1994 to $3.2 trillion by 2015. That’s an 87% increase, after adjusting for inflation.
Permanent appropriations to fund entitlements climbed 81% over those years. But “offsetting collections” rocketed up by 126% over the same period. In 2015, federal agencies spent more than $421 billion this way. And contract authority – by which Congress lets agencies under certain conditions spend money before Congress approves it – has climbed 166% to $165 billion.
The GAO says that this federal spending authority is supposed to provide government agencies with greater flexibility, because they can run programs without having to wait for Congressional approval each year. But it really amounts to an abdication of responsibility on the part of elected officials.
By putting more and more of the government on autopilot, lawmakers – and I’m talking both Republicans and Democrats – can wash their hands of most of the federal budget. Sure, Congress can change the rules to rein-in entitlements, offsetting collections and the like. But if it does nothing – as is usually the case – the spending happens automatically.
And as noted above, the spending increases every year.
Unfortunately, Congress doesn’t have any incentive to change this. But you would think a businessman like President Trump can see this and put a stop to it – especially with deficits climbing back to $1 trillion a year and the national debt approaching $22 trillion. Yet I’ve seen nothing to suggest he’s seriously looking at it.
Even worse, President Trump doesn’t seem to think our exploding deficits and debt are a top priority. Earlier this month, we learned that in 2017 senior officials in the Trump administration presented him with charts and graphs showing how the debt is exploding and how it could lead to another financial crisis.
To that, the president reportedly responded: “Yeah, but I won’t be here,” a suggestion that he’ll be out of office before such a crisis occurs. I hope this quote isn’t true, or was taken out of context, but it came from a senior aide who was reportedly in the room when the comment was made.
In closing, if you were not aware that 86% of federal spending is on autopilot, don’t feel alone. No one I’ve spoken with was aware it is that high.
On a brighter note, let me wish you a very Merry Christmas or whatever holiday you may be celebrating! Thank you as always for your continued confidence and for reading my work. Your comments and suggestions are greatly appreciated!!
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