Today, Congressman Michael Cloud (TX-27) introduced the Cost Estimates Improvement Act (H.R. 638), a common-sense government reform bill to help address the ballooning national debt. Congress routinely ignores the true costs and overstates the benefits of new spending by ignoring the interest costs of legislation. Congressman Cloud’s bill would improve the process for estimating the cost of new legislation, forcing lawmakers to reckon with the actual cost of raising our national debt.
The Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) are nonpartisan institutions that produce reports and cost estimates for proposed legislation. Members of Congress count on the accuracy of these reports when considering their votes. However, the cost estimates do not currently contain debt servicing estimates, which results in cost estimates that are lower than the actual total cost of the new spending.
In other words, when buying a car with a loan from a dealer, the average American knows the true cost of the car isn’t the list price. It’s the standard loan plus the interest rate. In budgeting for monthly car payments, the extra cost of interest payments must be factored in.
Unfortunately, Congress does not do this when considering new spending.
The American people have to account for the cost of debt in their family budgets, and this bill would hold Congress to the same standard.
The Cost Estimates Improvement Act would require more accurate cost estimates when the CBO and JCT evaluate the price tag of proposed spending. The addition of the cost of servicing the debt to the cost estimate of any future legislation must be included.
The bill would also require the agencies to produce a duplication report documenting how services provided by the proposed legislation might be repeating work already being done by other government agencies. This would provide Members of Congress and their staff with a clearer understanding of the costs and benefits of legislation.
“Our country is facing a spending crisis,” said Congressman Cloud. “Big, bloated government spending bills and congressional inaction have led us to this point. Reigning in our debt and deficits only gets harder the longer we wait. My bill would require a full and complete picture of the cost of the legislation we are voting on.”
“This isn’t a right or left, Republican or Democrat issue — this is simply good governance,” he added.
First introduced in the 116th Congress, Congressman Cloud reintroduced the bill this Congress and is working to attract bipartisan support and get this practical solution signed into law. It currently has 21 original cosponsors.
Heritage Action for America, FreedomWorks, and the National Taxpayers Union support the bill.
“Americans deserve an accurate picture of how much money their government is going to spend and why they’re spending it,” said Garrett Bess, Vice President of Government Relations and Communications at Heritage Action for America. “Rep. Cloud’s Cost Estimates Improvement Act would hold Congress accountable for the true cost of legislation and the hundreds of billions of dollars America pays in interest on its debt every year, while calling out redundant programs. This legislation is a critical step towards long-needed transparency in Washington.”
“Our nation’s debt and deficit crises are at risk of spiraling out of control in the near future,” said Andrew Lautz, Policy and Government Affairs Manager at the National Taxpayers Union (NTU). “Rep. Cloud’s Cost Estimates Improvement Act would ensure that lawmakers understand the costs a particular piece of legislation will pose for servicing additional debt, better illuminating fiscal tradeoffs for lawmakers. NTU is glad to support this bill.”
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