The Power to Tax and Spend

The Constitution gives the Congress the power to tax and spend. According to the Spending Clause, "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States” (U.S. Const. art. I, § 8, cl. 1). The Constitution also regulates, albeit to a limited extent, how Congress considers legislation that authorizes new taxes and spending. The Origination Clause stipulates, "All Bills for Raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills" (U.S. Const. art. I, § 7, cl. 1). And the Army Clause limits to two years the time a congressional appropriation to raise and support the army can remain in effect (U.S. Const. art. I, § 8, cl. 12). 

In addition to these grants of legislative power, the Constitution explicitly bars the executive from withdrawing money from the Treasury without prior congressional approval. Specifically, the Appropriations Clause stipulates, “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law” (U.S. Const. art. I, § 9, cl. 7). The clause also requires the government to publish information about the federal budget so that the American people may evaluate the fiscal decisions that their elected representatives make while in office.

How Congress budgets today technically adheres to the primary process outlined in the Constitution. That is, Congress must authorize by law both the collection of government revenues and their expenditure before executive branch agencies are allowed to spend money. And while Congress can fund the government for any length of time, its members have chosen to do so on an annual basis since the first Congress in 1789, thereby complying with the spirit of the Constitution's two-year time limit on appropriations to raise and support the army while applying the limit broadly to cover all government departments. Finally, through reports by legislative support agencies like the Government Accountability Office (GAO) and the Congressional Budget Office (CBO), as well as in hearings like this one, Congress makes an effort to comply with the Constitution's directive to publish information detailing the budgetary decisions its members make when they tax and spend.

Yet notwithstanding this, the budget process followed by Congress at present makes it unnecessarily difficult for its members to discharge their constitutional duties effectively. Its complexity obscures the real nature of today's dysfunction and inhibits efforts to fix it. Moreover, the closed-door nature of budgeting makes it harder for rank-and-file members of Congress, and the people they represent, to evaluate budgetary decisions as they are made. Reforms aiming to improve the efficiency of federal budgeting without tackling this more profound dysfunction are unlikely to fix the broken process. For reform efforts to be effective, they should be grounded in a clear understanding of what the act of budgeting actually entails. Only then is it possible to fully appreciate the challenges presented by backdoor spending and to identify the reforms needed to overcome them.