Budgeting in Neverland: Irrational Policymaking in the U.S. Congress and What Can Be Done about It

Publication Date: July 2006

Publisher: Cato Institute

Author(s): James L. Payne

Research Area: Government

Type: Report

Abstract:

Many Americans are disappointed by the huge amounts of money Congress spends, but that's not the real problem. The real problem is the profoundly irrational system Congress uses to decide how much to spend.

The basic requirement for intelligent decisionmaking is to hear arguments and evidence from both sides of an issue. Congress ignores this requirement in its budget-making process. Instead of hearing both the pros and the cons of spending on particular programs, Congress usually hears from only the self-interested supporters of programs. Those biased advocates of spending typically include federal program administrators, whose careers depend on making their programs look good, and lobbyists paid by program beneficiaries to promote programs.

The avalanche of one-sided propaganda in favor of federal programs creates a false picture for policymakers. They live in a Neverland where federal spending programs are routinely portrayed as necessary, helpful, and effective. The result is that Congress continues to fund, decade after decade, many programs that are wasteful and harmful.

The corrective is for Congress to adopt measures to balance the decisionmaking process by hearing from opponents of spending programs. The committees that oversee spending should routinely invite critics of programs to participate in the congressional information-gathering process. Another reform idea is to create a federal "office of taxpayer advocacy" charged with voicing the taxpayer interest when Congress considers program funding decisions. Such procedural reforms are needed if Congress is to get spending under control and begin making serious tradeoffs regarding priorities in the federal budget.