It’s April 1^st and for the first time in TCS history, we are unequivocally endorsing a President’s budget. After combing through President Biden’s Budget Request for Fiscal Year 2023, we were impressed by its organization, its transparency, and its commitment to protecting taxpayers. We believe the proposed budgets for every federal agency outline reasonable funding levels and describe nothing but worthwhile investments while wisely paring back unnecessary programs. Congress should immediately agree to spend the $1.6 trillion in discretionary budget authority it requests….. APRIL FOOLS!

President Biden did release his Fiscal Year 2023 budget request this week. And it contains a number of items TCS does endorse. But presidential budget requests are aspirational, more about signaling principles and directions. Don’t be fooled into thinking this is the final say on federal spending. As lawmakers like to state, the president proposes and Congress disposes. Congress still needs to draft, debate, and enact annual spending (appropriations) bills to allow the rubber to meet the road.

Speaking of which, Congress just passed the FY22 spending bills a few weeks ago. No joke. The omnibus that President Biden signed into law was for FY22, not FY23. That was nearly half-way into the Fiscal Year. Fast forward to Monday when (at least some of) the President’s budget was released.

Here’s a full analysis. Double April Fools! Actually, we have a partial analysis because as of this writing, not all of the budget docs have been released.

There are a few areas where the budget is trying to fool taxpayers.

The President’s budget saves taxpayers $1 trillion. We like that the budget proposal contains various changes projected to increase revenue or reduce spending compared to current law. This is especially welcome after experiencing $5.9 trillion in deficits just the last two years. But the budget still projects $1 trillion+ annual deficits in perpetuity. Overall debt would actually increase to a record 106 percent of annual GDP. That’s not fiscal responsibility, even if it was real savings.

Deficit reduction is based on major tax changes with slim to zero chance of adoption. There’s a minimum tax on billionaires. It calls for an increase in the individual rate for the highest tax bracket. Leaving policy merits aside the problem, from a budget reality angle, is they’ve already been rejected by this Congress. Budgets need to be built with the taxes and programs you know you have or are likely to have one day. Not the ones you’d like to have in a “perfect” world.

The budget excludes spending we know is next to inevitable. Continuing a bipartisan tradition, the budget request lowballs spending for the flood control, navigation, and ecosystem restoration projects for the Army Corps of Engineers. Presidents know whatever they request, Congress will add billions. And while the budget requests included increases in many lines focused on preparing for future pandemics, there is no request for “emergency” spending in response to COVID-19. This while the administration is actively seeking up to $28 billion, now more likely $10-15 billion, in an emergency COVID-19 supplemental. Sure that would technically be in FY2022. But do you really think the demand for pandemic spending will disappear after September 30?

Farm subsidies are ripe for reform. Did President Biden agree with his predecessors – including both Presidents Obama and Trump – that some spending should be cut from ag subsidy and crop insurance programs? Nope. Not $1 was found in cuts to programs that cost taxpayers tens of billions of dollars each year. Independent analysts like the Government Accountability Office – and farmers themselves – agree the programs should be trimmed.

Now don’t be a fool and think the budget request is a waste of time. Each request is a starting point for negotiations with Congress. And they often contain some good ideas.

Proposes numerous needed reforms to the tax code. This request revives items we’ve advocated for some time, like cutting tax breaks for fossil fuel companies. The oil and gas industry is riding high on huge profits, and even if it wasn’t, asking taxpayers to needlessly subsidize mature companies is always wasteful. The proposed cuts would raise $44 billion over 10 years if enacted. But that total is well shy of last year. Turns out the budget included a silent ‘April Fools’ when it promised to end ALL fossil fuel subsidies. This year, two are conspicuously missing from the list of cuts. Both let companies game international tax rules and need to be cut.

Both the shipbuilding and F-35 budget lines in the President’s request are relatively modest – emphasis on relatively. After years of a sharp upward trajectory to spending on the F-35, the request has leveled off at cruising altitude. The request across the three military services flying the F-35 is just over $8 billion for procurement and advance procurement of 61 F-35s. If past is prologue, the Congress will lard this up with dozens more aircraft as the Pentagon spending bill makes its way through the Appropriations Committees. (Sigh.) And the Navy’s shipbuilding request is for “just” 9 new hulls. But, then again, the FY22 request was for just 8 hulls and that ballooned up to 13 by the time the President signed the spending bill into law, mere weeks ago. But, credit where credit is due: the Biden Administration is making a reasonable request. TCS is here to tell you, throughout the process, when political interests infect budget decisions.

There’s a glimmer of hope on hardrock mining reform. Some of the widely coveted “critical minerals” needed for advanced technology and manufacturing fall under the “hardrock” umbrella. There’s a mining boom coming, and taxpayers need to get our share. In 1872, President Grant signed the General Mining Law providing incentives for anyone to start mining on federal lands with the express aim of helping settle the West. Well, it’ll be 150 years this May, the West has been settled, and the law is still on the books. The Department of the Interior (DOI) is creating an Interagency Working Group to put together a reform plan for hardrock mining. Proposing a royalty in the budget request would’ve been better, but it’s a good start. One of our former Presidents once said, “Fool me once, shame on you. Fool me…you can’t get fooled again.” Let’s hope that’s true for hardrock mining policy.

Now, the ball is in Congress’s court to pass spending bills individually and on-time, shepherding them to the President’s desk before Sept. 30. Stay tuned over the coming months as we dig in and see if taxpayer dollars are being spent wisely – or not. No joke.