Loophole Disguises How the Budget Control Act Endangers Kids

Federal Budget

Crucial resources to help children have suffered from a steady tide of divestment in federal spending in recent years. The dozens of children’s groups that make up the Children’s Budget Coalition (CBC) believe the caps on non-defense discretionary spending mandated by the Budget Control Act (BCA) present a major obstacle to more spending on initiatives to improve the lives of kids.

Congress itself seems aware that current spending levels aren’t sufficient. That’s why they frequently rely on a budget gimmick allowing them to appropriate above BCA limits: Changes in Mandatory Program Savings (CHIMPS).

Appropriators utilize CHIMPS by setting “spending limits” in mandatory programs whose previous authorizations overestimated future spending (the Children’s Health Insurance Program and the Crime Victim’s Fund are two frequent targets). Under scorekeeping rules, the “savings” generated by these caps are then allowed to offset discretionary spending above BCA caps.

The only problem? Those savings aren’t real, because the money wasn’t going to be spent in the first place. The CBO notes this by scoring CHIMPS as a net zero in actual outlay savings.

Without CHIMPS, sub-allocations to non-defense discretionary spending would likely be even lower than current levels. Yet Congress has begun cracking down on this budget loophole, capping the amount of discretionary spending that appropriators can offset from CHIMPS that don’t correspond with net outlay savings. For Fiscal Year 2017, that number was $19 billion—and in Fiscal Year 2018, it’s $17 billion. A reduction down to $15 billion is set for Fiscal Year 2019.

Those rules illuminate the underlying problem with using a budget a gimmick to get around BCA caps: it’s not sustainable. Meanwhile, because CHIMPS rely on overestimations for future mandatory program spending, the available “savings” can also fluctuate year to year. When CHIMPS decrease, discretionary spending available to appropriators like the subcommittee on Labor, Health and Human Services, and Education takes a serious hit.

On the one hand, CHIMPS are an important tool for continuing funding for vital non-defense discretionary spending that benefits children. But a much simpler, and more sustainable, solution is available.

If Congress is serious about investing in children’s futures, they need to stop maneuvering around the Budget Control Act using tricky math and start working to lift the caps on non-defense discretionary spending altogether.