Dear Representative Brady,

Without a doubt, Washington has a spending problem. In real terms, adjusted for inflation, the federal government grew by a whopping 55% in the first decade of the new century, adding well over a trillion dollars of new spending to the budget over that time. This reflects a massive shift toward a larger presence for the federal government in the economy (spending grew to 25% of GDP by the end of 2009, compared to just 18% ten years earlier), but more importantly it reflects an inherent bias on the part of Washington policymakers toward more government spending.

The Joint Economic Committee (JEC), where you serve as vice chairman, recently introduced a report outlining the many powerful incentives that favor the perpetual growth of government. The current culture in Washington supports such fiscally irresponsible tactics as grabbing billions of taxpayer dollars in pork and government handouts for constituents, while financing these purchases with debt and promising to pay for them later. The deck is simply stacked against sustainable reductions in government spending, and unless we level the playing field to allow limited government and fiscal restraint to thrive, the out-of-control spending and soaring national debt burdens will not come to an end.

But, as you know, Americans that favor small government can fight back. As the JEC report goes on to explain, one way to overcome these biases toward higher government spending is to adopt robust fiscal rules in Congress: force politicians to make decisions within a limited, responsible framework that puts mandatory constraints on spending and budget deficits. Your recent introduction of the Maximizing America’s Prosperity Act (“MAP Act”), H.R. 2319, provides one set of fiscal rules that would force politicians to use taxpayer dollars responsibly and make the tough budgeting decisions Washington is currently avoiding. On behalf of more than 1.7 million Americans for Prosperity activists in all 50 states, I write in strong support of this thoughtful and well-crafted bill.

The highlight of the plan is a cap on non-interest federal spending at 16.5 percent of potential GDP. This improves on other, similar federal spending caps in two ways. First, the numerator of the ratio (federal spending) excludes interest payments on the national debt. Among other reasons, this is to prevent the use of tax increases to “reduce spending” under the cap and eliminate incentives that would create a bias against tax cuts. Second, the denominator uses potential GDP instead of actual (“nominal”) GDP. This creates a more predictable path for the spending cap over an extended period of time – reining in spending in good years (when actual GDP climbs above potential) and avoiding large cuts in bad years (when actual GDP falls below potential), eliminating a great deal of uncertainty for policymakers and business owners regarding future government policy.

Your bill also contains a number of innovative budgeting mechanisms that will help to ensure spending restraint and long-term fiscal solvency. Many are ideas drawn from state governments that have successfully implemented fiscal rules across the country. These include forcing the president to prioritize spending and rank programs from most to least essential, providing for a rainy-day emergency fund, and adopting a permanent continuing resolution that cuts spending by 10 percent automatically unless Congress produces a budget through the appropriations process.

Perhaps most interesting of your proposals is the mandatory sunset of federal programs. Under your plan, all agencies and federal programs would be terminated over a 12-year cycle unless Congress takes specific action to extend them. This idea rests on a simple premise: agencies that regularly have to justify their existence will be more accountable to taxpayers. Your home state of Texas used this approach to abolish ineffective agencies, cut wasteful programs, and consolidate duplicative functions, saving the states’ taxpayers $784 million through 2009.

The MAP Act is an important bill coming at just the right time. It inserts a number of innovative ideas already being used successfully at the state level into the current national conversation. With a $14.3 trillion national debt coming due, representing a burden of more than $46,000 per citizen, indeed it’s time to rein in out-of-control spending in Washington. The MAP Act provides small-government advocates with the tools to do this responsibly.

Americans for Prosperity is proud to support your legislation. I urge your colleagues to support its passage, and I look forward to working with you in the future.
Sincerely,

James Valvo
Director of Government Affairs
Americans for Prosperity

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