No Budget, No Pay Act: It's Hard to Argue Politicians Should Get Paid If They Don't Perform


In the four years that President Obama has been in office, Congress has only passed a single budget. Republicans blame Senate Democrats, who under the leadership of Harry Reid haven't passed a budget in over 1,370 days. Democrats insist that excessive Republican partisanship makes negotiation impossible. Whichever you believe, this is no way to run a government. That's where the "No Budget, No Pay Act" comes in.

Our nation faces significant fiscal challenges. In the Government Accountability Office's annual audit of the government released last week, the agency found that "the current structure of the federal budget is unsustainable." It's not hard to see why, as the Bush and Obama years have seen significant growth in federal spending.

After falling under President Clinton to 18.2% of GDP, spending has since soared to 24.3% today. By comparison, post-World War II tax revenues have averaged about 18%, and stayed fairly consistent even as income tax rates have varied dramatically over the decades. The key to resolving our fiscal mess is thus the return of spending to a level commensurate with average expected revenues.

Automatic spending programs like Social Security, Medicare, and Medicaid, however, are making that task ever more difficult. By 2020 these three programs will account for about 50% of the budget, and absent a course change spending as a share of GDP is projected to almost double over the next 30 years.

Passing a budget would require acknowledgement of this stark reality, and would therefore create pressure on legislators to act. But they don't want to act, and seem to believe that sticking their heads in the sand and not looking at the problem will cause it simply to go away.

I'm a firm believer in the power of incentives. Structural and institutional pressures are needed to compel legislators to tackle our fiscal problems. The "No Budget, No Pay Act" offers just such an incentive. It requires that members of Congress pass a budget and subsequent appropriation bills by the dates required by statute, or not be paid. It's hard to argue with the principle. Do your job or don't be paid. In fact, I would go one step further and require not just any budget, but a balanced one.

This approach is not a sure thing. There are constitutional obstacles surrounding the legislation, for instance. The Twenty-seventh Amendment prohibits congressional pay from being altered in the middle of a term. Supporters of the law argue that they solve this problem by placing salaries in escrow if a budget is not passed, and conclude that the salaries are not changed, just withheld. Moreover, this also requires the money to be released at the end of a Congress even if no budget is ever passed.

Given these requirements, and the fact that many members of Congress are wealthy enough to render negligible the financial pressure of not receiving a salary, the “No Budget, No Pay Act” may end up making no difference. We won't know for sure until it is tried, but it's a welcome attempt to create rules that force politicians to act in the interest of taxpayers. Other structural reforms, such as a carefully crafted Balanced Budget Amendment or a federal spending cap, should also be considered.

An ability to manage our nation's finances ought to serve as the bare minimal level of competence we expect from elected officials, yet it is precisely this task at which politicians have repeatedly and spectacularly failed. But they work for us, and taxpayers are right to insist that they either do their jobs or not be paid.