Congressmen Join Chorus Calling for Tax Expenditure Scrutiny

The House Budget Committee yesterday held a hearing on the president’s most recent spending control measure, the Reduce Unnecessary Wasteful Spending Act of 2010. The hearing presented lawmakers with an opportunity to press the administration about why the bill—which would give the president greater flexibility in trimming appropriations packages—excludes one of the largest categories of government spending: tax expenditures.

Before the hearing, the Center for American Progress urged lawmakers to raise the issue—and they did.

House Ways and Means Budget Chairman, John Spratt (D-SC), flat out asked the administration why it had failed to include tax expenditures. And in a heated series of questions, committee member Lloyd Doggett (D-TX) derided the administration for subjecting tax expenditures and direct spending to different treatment. “If you were to come on behalf of the administration and ask us to write a check through the appropriations process for $38 million for this year only to NASCAR . . . you’d be laughed out of this room,” Doggett said, referring to a tax expenditure under consideration in the Senate.

Tax expenditures, or government spending through the tax code, will amount to over $1 trillion in spending this year. Yet this shadow spending is not included in the president’s spending control bill, despite making up nearly 25 percent of total government spending. These tax preferences are largely ignored in the congressional budget process, making spending through the tax code more prone to wasteful subsidies. This will not change until tax expenditures are integrated into the budget process.

CAP has called for the administration to take leadership in this area, and Thursday’s hearing signals a growing chorus calling for more action on this important issue.

Sima J. Gandhi is a Senior Policy Analyst at the Center for American Progress.

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