At the beginning of every new session of Congress, the House of Representatives passes a new set of rules that governs how they operate. The 118th Congress, which began on January 3, 2023 and ends January 3, 2025, is no different. Below is a curated list of the most impactful taxpayer-friendly measures in the new rules package. The House plans to pass the new rules in the first week of January, after they elect a Speaker.
Guarding Against Tax Hikes
Supermajority Required for Income Tax Rate Increases
This measure would allow Congress to pause and consider the impact of federal tax increases. As we continue to experience the impacts of the COVID-19 pandemic and skyrocketing inflation, this simple change to House procedures will ensure the financial health of taxpayers is front and center in debates over any potential federal income tax rate increases that may be considered in the 118th Congress. The rule would require three-fifths (60 percent) support for any legislation that increases federal income tax rates, a higher threshold than simple majority (50 percent plus one) support.
Exercising Spending Restraint
Opportunities to Stop Bills With Long-Term Spending Implications
Lawmakers in Congress often manipulate the Congressional Budget Office (CBO) “score” for a particular piece of legislation, using budget gimmicks and games to make the bill appear to balance over a 10-year window while ignoring the long-term budget effects. The House rules package would allow Members to raise a point of order against legislation that increases mandatory spending – i.e., the 70 percent of federal government spending not approved by Congress in the discretionary budget from year to year – by more than $2.5 billion in any of the four decades following the initial 10-year budget window.
This new rule, if enforced by Members through points of order, could help ensure that new legislation doesn’t pretend to balance over the course of a few years while bankrupting future generations of taxpayers decades down the road.
Preventing Reconciliation Measures That Increase Spending
Congress often utilizes the reconciliation process in order to achieve policy priorities that otherwise would struggle to pass through regular means due to the lower barrier to success. That’s because reconciliation bills are not subject to a potential Senate filibuster, which typically requires 60 votes to overcome. Twice in the 117th Congress, the reconciliation process was used to pass such priorities: the American Rescue Plan Act and the Inflation Reduction Act. The new rule would bar any consideration by the House of a budget resolution with reconciliation instructions that would result in a net increase to mandatory spending. NTU and NTU Foundation have long advocated against massive spending increases and sees this as a positive step in the right direction to decelerating large scale spending.
Halting the Growth of New and “Zombie” Spending
No New Authorizations Through Amendments to Spending Bills
Given appropriations bills to fund the government are among the few major pieces of legislation that still reliably pass Congress from year to year, more and more Members have tried to cram unrelated and potentially expensive priorities into annual spending bills. These priorities often don’t appropriate taxpayer dollars to specific programs right away, but authorize future spending on a new or expanded program. This paves the way for Congress to increase spending further in the future, and makes it easier for lawmakers to add new programs to the sprawling federal bureaucracy.
This new rule would prohibit amendments to appropriations bills that increase spending through budget authority, strengthening existing rules that also prohibit amendments to appropriations bills that increase spending through outlays. It would prevent one behind-the-scenes legislative process that often only serves to add spending items to the taxpayers’ credit card.
The rule would also allow Members to offer amendments to appropriations bills that simply reduce spending amounts, rather than swapping one type of spending for another. Lawmakers should be actively working to reduce both defense and non-defense discretionary spending in all 12 appropriations bills, so this aspect of the new rule is most welcome.
No Increased Appropriations for Unauthorized Spending
A Congress that is functioning in regular order is supposed to spend money in a two-step process, by first authorizing a program or expenditure and then following up with an appropriation of funds for the authorized expenditure. Over the last few decades this process has broken down. According to a report by CBO, Congress allocated $461 billion in spending for expired federal programs in 2022 alone. The House rules for the 118th Congress bars general appropriations bills from providing a spending increase for any unauthorized program. If a point of order is made and sustained, the bill would automatically be amended to reduce the appropriation to be equal to the most recent amount provided.
Make the Committees Work on Expired and Expiring Authorizations
CBO, NTU and NTU Foundation, and other government and non-government watchdogs have warned for years that Congress is abdicating its duty to reauthorize expired and expiring government programs. These “zombie” programs often continue to exist – and receive taxpayer dollars – long after their authorization, a program charter of sorts, has expired. Expired or expiring programs lack the Congressional oversight that is necessary to ensure taxpayer dollars are being spent efficiently and effectively.
The new rules package would require committees throughout Congress to list out their expired programs by March 1, 2023 and offer a plan for reviewing those programs. Committees would have to also make plans for shifting more mandatory spending, which is effectively on autopilot, to the discretionary budget controlled from year-to-year by Congress. These efforts will strengthen the Congressional power over the nation’s purse strings and compel more effective Congressional oversight of trillions of dollars in federal spending.
Building a Better CBO
Accounting for the Inflationary Effects of Legislation
The trillions of dollars in spending hikes over the past several years have not only piled up federal debt, they have also contributed to higher inflation. The rules package would have CBO analyze the inflationary impact of legislation that would boost mandatory spending by 0.25 percent of gross domestic product (GDP) in any year over the next ten years. GDP was estimated at $25.7 trillion in 2022, so the threshold would be triggered for bills costing at least $64 billion in any year. The Chair of the Budget Committee could also request inflationary analysis of bills that do not reach that threshold. This would help inform taxpayers and lawmakers of the additional negative impacts of large scale spending proposals.
Restoring Dynamic Scoring
The rules package would restore a previous House rule to have CBO conduct dynamic analysis of revenue and mandatory spending in proposals that would have a budgetary impact of at least 0.25 percent of GDP, equal to about $64 billion in 2022.
Dynamic scoring assesses the macroeconomic impact analysis of major proposals, a critical tool that helps lawmakers understand how economic behavior will respond to changes in policy. For example, under the current static analysis used by CBO and the Joint Committee on Taxation, reducing marginal income tax rates would lower tax revenues. A dynamic score would also look at how the lower rate would enable further investment and economic growth, which could potentially offset a portion of the foregone revenues.
Keeping an Eye on the Nation’s Ailing Trust Funds
Two of the government’s largest programs are facing insolvency. Medicare Part A, hospital insurance, is projected to be insolvent in 2028. By 2033, the Social Security trust fund will only be able to cover 76 percent of benefits. Unfortunately, many lawmakers have proposals to continue to irresponsibly expand these programs rather than reform them. The rules package would have CBO provide additional information on legislation that would increase outlays for either Medicare Part A or Social Security by 0.25 percent of GDP in any year over the next decade. CBO would analyze the unfunded liabilities of Medicare over the next 25 years, and 75 years for Social Security.
Together, these nine budget and scorekeeping rules included in the House rules package for the 118th Congress represent a promising step forward for taxpayers concerned about the nation’s fiscal trajectory. While harder work lies ahead, foremost the need to reduce persistent trillion-dollar deficits and soaring national debt, the rules package is a good start for the brand new Congress.
Demian Brady is the Vice President of Research for the National Taxpayers Union Foundation. Andrew Lautz is the Director of Federal Policy for National Taxpayers Union and National Taxpayers Union Foundation. Alex Milliken is a Policy and Government Affairs Manager for National Taxpayers Union.