Will Budget Rules Rewrite Help Slash Spending?

The House is giving budget committee chair Paul Ryan unprecedented powers over federal spending to help push cuts. But will the new rules work?

New House of Representatives' budget guidelines —which give Budget Committee Chairman Paul Ryan unprecedented power over total federal spending—will almost certainly pass the Rules Committee and go into force. Anybody who wants smaller government can’t help but cheer and root for Ryan and his spending-cutting compatriots in the House. All that said, passing tough-sounding budget rules is a far cry from the drop-in-a-bucket Republican promise to cut $50 billion from this fiscal year’s spending.

In fact, rules, including those even stronger than those placed into effect in the House don’t have a very good track record. All states but one (Vermont) have provisions mandating balanced yearly budgets and nearly all sizeable municipalities do the same thing. While the economy means that hardly any state faces a happy budget picture, stark differences nonetheless emerge even though almost all states have the same mandate of responsibility. Better governed states – Virginia, Utah, and Missouri to name three – have retained AAA bond ratings, kept taxes level, balanced their budgets more or less honestly, and avoided draconian cuts to core government services. States with serious governance problems like California and Illinois have raised taxes steeply, cut basic services like law enforcement and street repair but “balance” their budgets through sleight of hand.

And these state rules, invariably, have many more teeth – most are written into state Constitutions – than the new House provisions. California’s hugely complex balanced budget provision is almost 1,000 words longer than the entire United States Constitution.

Rules, of course, can help around the margins. Illinois, terribly governed under members of both parties, probably wouldn’t have just imposed a massive tax increase on its citizens if it weren’t for balanced budget language in its constitution. States like North Carolina (where the governor can unilaterally cut spending if revenues come in below projections) and Maryland (where the governor’s budget proposal has to be voted up or down by the legislature) might be in much worse fiscal shape if it weren’t for their legal structures.

The new House Rules may improve some things and make it easier to cut spending. But, alone, they do nothing to cut spending or reduce the size and scope of government. The hard choices—the actual spending cuts—still lie ahead.

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