By Rick Manning – The incentive to spend more and more money is at the heart of our government’s budget crunch as millions of dollars are spent simply because there is no incentive not to spend it all, even if t isn’t needed.
U.S. Congressman Denny Rehberg (R-MT) is trying to tackle this problem as it relates to state spending of federal funds by allowing state governments to apply federal money they receive, but don’t spend, directly to pay down the national debt.
As Rehberg explains, “Instead of the wasteful ‘use-it-or-lose-it’ approach to federal spending, the REFUND Act, H.R.1358, creates an efficient system that operates on the principle of ‘a dollar saved is a dollar earned.’”
REFUND stands for Returned Exclusively for Unpaid National Debt, and the bill lives up to its name.
What many people don’t realize is that under current law, if a state is entitled to federal government money through one of hundreds of programs, and they either don’t spend all of the money or decide to not accept the money at all, those dollars don’t go back to the federal government to lower the debt. Instead, the saved dollars are spread out to states that are using every dime of the federal subsidy.
As Rehberg explains, “It’s really very simple. If a responsible state like Montana tightens its belt, we shouldn’t be rewarding irresponsible states like California by adding those savings to their take.”
Many fiscally conscious state legislators come under political fire by tax dependent constituencies for failing to use every federal tax dollar that is available, and Rehberg argues that his legislation would change that political equation stating, “We’ve got to put an end to the Washington system that subjects state lawmakers to partisan attacks for having the audacity to save taxpayer money.”
Bill Wilson, President of Americans for Limited Government calls the proposal, “a commonsense step to help lower the debt rather than allowing federal money to turnstile back out to higher spending states.”
The legislation has been referred to the House Appropriations Committee, where Rehberg is the Subcommittee on Labor and Health & Human Services Chairman.
Rick Manning is the Communications Director for Americans for Limited Government. You can follow Rick on Twitter at @RManning957.
