Don't Be Penny Wise and Pound Foolish With the Budget

Blog Post
Monday, June 04, 2018

“As we look at keeping discretionary spending under control we do want to be careful and maintain a fiscally responsible approach, but we don’t want to cut the heart out of things that are needed for investment or national security,” said Robert L. Bixby, executive director of The Concord Coalition.

On the latest "Facing the Future" episode, Bixby joined the program to discuss discretionary spending and entitlement programs.

Discretionary spending, which is subject to the annual appropriations process and includes spending on national defense and domestic investment, is near an all-time low as a percentage of the economy. That could be a positive contribution if Congress were simply looking to help control growing deficits, Bixby said.

But there is a significant downside to relying on the shrinking of discretionary spending to achieve some semblance of fiscal responsibility.

“There are some things that we do in regards to defense and non-defense discretionary spending that are very important to do, that can be considered an investment in the future,” Bixby said. “So we may actually be squeezing discretionary to a point that is penny wise and pound foolish.”

Bixby said that the major mandatory spending programs, like Medicare and Social Security, are consuming more and more of the budget. If that trend continues, the budget would eventually become little more than a tax-revenue transfer mechanism without any thought given to investments in the economic future.

Joshua Gordon, Concord’s policy director, was also on the program to discuss a recent Congressional Budget Office report concerning federal health insurance subsidies for people under the age of 65.

I host “Facing the Future” each week on WKXL Concord News Radio (N.H.), which is also available via podcast. Join us as we discuss issues relating to national fiscal policy with budget experts, industry leaders, elected officials and candidates for public office. Past broadcasts are available here. You can now subscribe to the podcast on iTunes, Google Play or through RSS.