Built-In Growth is “Crowding Out”

During a House Budget Committee hearing today on “The Need for Fiscal Goals,” witnesses Douglas Holtz-Eakin and Maya MacGuineas delineated the challenges policymakers face when trying to tackle the nation’s long-term fiscal challenges. MacGuineas, president of the Committee for a Responsible Federal Budget, outlined the “built-in growth” in our nation’s finances that make even slowing such growth difficult:

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“We have so much built-in growth in our budget, and that is where the bulk of the problem lies. And as a result, when we want to slow the growth of something – even so it is still growing faster than the economy – it’s called cutting spending, and it becomes very difficult to do.”

Holtz-Eakin, former CBO director and president of the American Action Forum, noted how automatic, or mandatory, spending is “crowding out” resources for other priorities – specifically those priorities which our nation’s founders actually envisioned as the role of our government:

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“No budget process can be perfect, but you should budget for the problem you have. The problem the federal budget has is mandatory spending, and it is one thing to worry about the mismatch at the topline and the revenues. It’s just as important to recognize that the rise in mandatory spending is crowding out the annual discretionary accounts that contain national security, basic infrastructure, education, research, all the things that our founders saw as the role of government are now imperiled in a budgetary sense. I think that’s what you should focus on getting a handle on.”