Congress and the Power of the Purse

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Sunday, November 18, 2001
Ask the average American what Congress accomplishes, and the answer usually comes back: not much. Progress in Washington can be slow, with strong differences of opinion reflecting the fact that Members deal with a large number of exceedingly difficult problems and come to the nation's capital from all corners of our large and diverse nation. Yet on its single most important responsibility, Congress year after year is able to overcome differences and in the end reach an agreement that helps set national priorities. 

That responsibility is Congress's “power of the purse” — its ability to set the spending and taxing policies of the nation. Not one dime can be spent from the federal Treasury without the approval of Congress. The determination of the budget by Congress is usually the most important political process of any year, partly because of its size (approaching $2 trillion) and partly because it is the principal means by which government establishes its priorities. 

The annual consideration of the federal budget is an enormously complex undertaking and can be highly contentious. The budget submitted to Congress by the President is often proclaimed “dead on arrival” by the opposition party; headlines throughout the year, such as one just last week, declare how the President and congressional leaders “clash on spending”; and competing factions warn that if they don't get their way, a budget "train wreck" will occur, and the government will shut down. 

That rarely happens, and even if it does, the deadlock doesn't last for long. To be sure, the movement toward compromise is often slow and tortured. But in the end, the House and Senate reach an accommodation with each other, and with the President, that enables the federal government to meet its responsibilities from programs as large as Social Security and national defense, to activities as small as repairing the panda cages at the National Zoo. 

The framers of the Constitution, mindful of "taxation without representation" suffered by colonists under the British crown, took care to specify in the Constitution that the ultimate power to tax and spend resides in the hands of the legislative branch - which is closer to the people - not the executive branch. 

The power of the purse is the most important power of Congress. James Madison in the Federalist papers called it “the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people”. It checks the power of the President and gives Congress vast influence over American society, because federal spending reaches into the life of every citizen. Under congressional direction, the government funds a nearly endless list of programs and activities: highway construction and student loans, retirement benefits and health care for seniors, military hardware and border security, disability insurance and agricultural price supports, subsidized housing for the poor and the mortgage-interest tax deduction for homeowners. The list goes on and on. In the past quarter-century, Congress has become much more ambitious about shaping a coherent federal budget policy. It seems hard to imagine it now, but prior to the 1970s, Congress usually passed tax and spending measures without worrying much about their cumulative impact on the government's bottom line. The executive branch kept an accounting of whether the government ran a surplus or fell into a deficit at the end of each fiscal year. That changed in the 1970s, when Congress approved a series of budget-process reforms. Since then, lawmakers have made their decisions about spending in a much more coordinated way, with a close eye on how their decisions will affect, and be affected by, the economy. 

The work involved in doing this is arduous, and — a reflection of its importance — it is the single most time-consuming thing Congress does. One veteran observer of Congress, asked to estimate how much time Members spend on budgetary matters, replied: "Almost all." That's an exaggeration, but it may not seem like it during those many weeks each year when Congress is preoccupied with the budget resolution or the appropriations bills. In recent decades, about half of all House roll call votes have been budget-related; in the Senate the percentage is even higher. 

The budget process has many flaws. It is so complex and unwieldy that it is difficult for Members — and virtually impossible for the public — to follow. The average American may not know all about the several thousand pages of the federal budget, but he does know that Congress perseveres, and ultimately fulfills the major responsibility assigned it in Article 1, Section 8 of the Constitution - "to pay the Debts and provide for the common Defence and general Welfare of the United States." 

(Lee Hamilton is Director of the Center on Congress at Indiana University. He was a member of the U.S. House of Representatives for 34 years.)