Wednesday, Rep. Jason Chaffetz (UT-03) introduced the Review Every Dollar Act (RED Act) as part of a comprehensive set of ten reforms that strengthen spending controls, enhance oversight of government spending and bring honest accounting to Washington’s broken budget process.
“Washington D.C. must change the way it does business,” said Chaffetz. “The RED Act makes fundamental changes to the appropriations process and requires Congress to be more accountable for their financial decisions. By improving the process this legislation will help Congress do the right thing and slow down spending. If we want different results, we are going to have to change the process.”
The bill has five provisions that reform the way Congress creates budgets. First, the bill requires periodic sunset reviews and reauthorization of federal programs. Committees of jurisdiction shall consider whether spending programs should be modified, terminated, or reauthorized. Criteria include cost effectiveness and efficiency of the program, whether the program is duplicative with other programs and should be consolidated with similar programs, whether the original objectives of the program have been achieved, and whether alternative methods exist to carry out the objectives.
Second, the bill creates deficit reduction accounts. This reform would ensure that if an amendment is adopted that reduces the amount of budget authority provided in a bill, then that budget authority is not merely shifted to some other part of the bill but is instead made permanently unavailable and thus used to reduce the deficit.
Third, general fund transfers to the highway trust fund will be scored as spending. In recent years, the federal government has transferred more than $34 billion from the general fund to the highway trust fund. This provision does not prevent general fund transfers to the highway trust fund nor does it reduce highway spending, which includes the mass transit account, but this provision does require that such transfers be scored as spending.
Fourth, Pell Grant funding will be entirely discretionary. Currently, Pell Grants are funded through a mixture of annual appropriations and direct spending. This provision shifts current Pell Grant mandatory spending to discretionary spending without reducing Pell Grant spending or the current maximum award of $5,550. This provision simplifies the program and gives Congress better control over costs.
Fifth, this bill requires that administrative actions that increase costs of mandatory programs cannot go into effect unless Congress enacts legislation to fund them. Under current law, agencies that run programs funded through direct spending can take administrative actions such as changing eligibility that increase the cost of that program to the federal government without approval from Congress. Congressional approval should be required for all spending, including mandatory spending.
Together with the other nine reforms, including the Expedited Line-Item Veto and Rescission Act which has bipartisan support, the Review Every Dollar Act reforms the federal government’s broken budget process by increasing oversight and transparency.