Congressman Cloud introduces Cost Estimates Improvement Act
Congressman Michael Cloud recently introduced common-sense, government reform legislation, H.R. 638, the Cost Estimates Improvement Act. The bill would require more accurate cost estimates when the Congressional Budget Office and Joint Committee on Taxation evaluate the price tag of proposed spending.
The Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) are nonpartisan institutions that produce reports and cost estimates for proposed legislation.
Congress determines the processes that CBO and JCT follow in producing these cost estimates and currently does not require them to include the cost of servicing the additional debt created by new spending. This results in cost estimates that are lower than the actual total cost of the new spending.
Furthermore, servicing the national debt is becoming a substantial part of federal spending. Last week, the U.S. national debt hit $22 trillion, according to the Treasury Department.
By 2025, interest payments on the debt will be the federal government’s third-largest spending program – exceeding defense spending, Medicaid, and Social Security Disability Insurance. CBO estimates that payments for net interest will nearly triple by 2028, climbing to $915 billion. This will increasingly crowd out other spending priorities.
The Cost Estimates Improvement Act would address these problems by requiring CBO and JCT to add the cost of servicing the debt to the cost estimate of any future legislation.
The bill would also require the agencies to produce a duplication report documenting how services provided by the proposed legislation might be repeating work already being done by other government agencies. This would provide Members of Congress and their staffs with a clearer understanding of the costs and benefits of proposed pieces of legislation.
“Congress hides the true cost of new spending by ignoring how much our nation will have to pay to cover the extra debt that new spending would create,” said Congressman Cloud. “The American people have to account for the cost of debt in our family budgets, and the Cost Estimates Improvement Act would hold Congress to the same standard and force lawmakers to deal with the actual cost of raising our out-of-control national debt.”
The Cost Estimates Improvement Act has gained 22 cosponsors at this point, and Congressman Cloud will be working to attract bipartisan support for this practical solution.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, released this statement:
“We commend Congressman Cloud for proposing to include interest costs in budgetary estimates for legislation. If interest on the debt is not counted, the official scores of legislation can be deceptively low, especially when offsets would occur years in the future. American taxpayers and future generations deserve honest accounting, not more gimmicks that attempt to paper over our huge and unsustainable deficits.”
The bill can be found at https://www.congress.gov/bill/116th-congress/house-bill/638
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