For those who wish to see government spend less, these are frustrating times. A bill that cut spending by a minuscule amount passed Congress earlier this year by the slimmest of margins. The Senate is undermining the cuts in President Bush’s new budget while voting to expand home heating subsidies. Reform of the budget process has gotten no traction. Other than the plan released by Republican Study Committee last week, there is little for limited-government types to cheer.
The temptation at times like these is to reach for policy ideas that look good at first glance but end up making the problem worse. Case in point is Senator George Allen’s proposal to dock Congress members’ paychecks if they do not finish each year’s budget on time. In other words, should members let the end of the fiscal year (September 30) pass without finishing all those omnibus-spending bills, then their checking accounts would be hurting.
To be fair, Senator Allen is promoting some worthwhile ideas to get spending under control, such as a balanced budget amendment and an amendment authorizing the line item veto. And he has what seems like a good rationale for his paycheck-suspension proposal:
It is absurd that full-time legislators can’t get their job done on-time by October 1 — then several months later — all kinds of unknown, unchecked spending occurs. They pass it in the dead of night, thinking nobody will notice what’s in these appropriations bills….What my measure will do is say very clearly, “if you fail to pass appropriations bills by the start of the fiscal year — which is your job, which is what you are paid to do — your paycheck will be withheld until you complete your job, period.”
However, it is hard to see how finishing on time relieves the problem of earmarks being snuck into budget bills in the middle of the night. It seems likely that in the mad rush to finish by September 30, it would be even easier to slip in items with no one looking. Indeed, threatening to withhold members’ paychecks would seem to give them more incentive to look the other way.
Allen’s proposal might also prove to be an example of the law of unintended consequences. Penalizing members for failing to meet a deadline means that members will be in a mood to compromise and back-scratch to meet said deadline. Unfortunately, Congress finds it easier to scratch backs by spending more than by cutting spending. Thus, it’s possible that Allen’s proposal would make the budget even more bloated.
If we really want to give members an incentive to cut spending, then let’s connect their paychecks directly to the budget axe. A better idea is to force members to take a pay cut by the same percent that increased spending on the budget exceeds inflation and population growth. For example, if population growth combined with inflation totaled 3 percent, and Congress decided to increase spending 4 percent, then all members would see their pay cut in the next year by 1 percent. The money saved from the pay cut would go toward deficit reduction. Although that amount would be very small relative to the entire budget, it would have the benefit of changing Congress from an institution that spends other people’s money to one that also has to spend its own.
This idea is by no means limited to spending. For example, we could also require members of Congress to take a pay cut by the same percentage that they, say, raised taxes. This would have the added benefit of forcing those tax-raising politicians who call on the American people to “sacrifice” to put their money where their mouth is.
Any budget reform that involves members’ paychecks must ensure that members are penalized for not exercising spending restraint. To simply require them to meet a deadline, and only dock their pay when they do not, would be ineffective if not counterproductive. George Allen’s heart is in the right place. He just needs to make sure his policy is too.