The U.S. budget deficit is expected to increase by nearly $2 trillion this year. President Joe Biden’s policies, including his student debt relief program, are responsible for this rise, but it is Americans who will suffer the consequences. Rising deficits threaten higher interest rates, inflation, and taxes.
We cannot afford to stay on this path.
The good news is that a return to prosperity is possible if lawmakers unite behind principles that have driven progress in the past. These include sound budgeting, smart regulation, and the belief that Americans should get to choose the employment arrangements that work for them. We can’t spend our way out of economic distress, but if lawmakers reform budget, energy, and labor policies, they can create a strong foundation that helps families thrive.
Here are three smart places to start.
First, reform the National Environmental Policy Act (NEPA).
When the NEPA — the federal law outlining the process by which energy infrastructure projects are approved by the federal government — was signed into law in the early 1970s, environmental impact reviews took a matter of weeks to conduct. Now they take five or more years.
The astonishing increase in time it takes to break ground on a project dampens our home-grown energy supplies, driving up energy costs and making U.S. consumers more dependent on foreign producers of oil, gas, and other energy. Permitting reform is necessary because energy costs in the U.S. have risen 39% since Biden entered office.
U.S. lawmakers should reform the NEPA to facilitate the creation of new energy projects. They also should enact the RESTART Act, which would reduce the number of regulatory hoops necessary to build new projects.
Most importantly, we need leaders who will treat all energy sources equally. Too often, federal agencies form a shadow government for the cronies and by the cronies. We need policies that keep bureaucrats from picking winners and losers when they mandate what types of energy is used to fuel our home appliances and cars.
Second, we need to rein in burdensome regulations that keep Americans from discovering, developing, and deploying the skills that help them contribute to society and to their own communities and families. The Biden administration’s recently finalized independent contractor rule is a good example of how overregulation can harm the economy. The aim of this rule is to reclassify as many independent contractors as possible so that they become full-time employees– even against the workers’ will.
California implemented a similar regulation a few years ago with disastrous results. A George Mason University study found the rigid California rule resulted in a 4.4% decline in employment among affected occupations and a 10.5% decline in self-employment in that same group. The rule has been particularly devastating for women, who studies suggest, tend to prefer more flexible work situations.
Congress needs to roll back these burdensome regulations and champion a more flexible workforce.
One way to do that is through the Employee Rights Act, which would protect independent contractors and freelancers, defend small businesses and franchises, and protect workers in matters with labor unions. It would be a major step toward meaningful reform.
Another key labor reform is the Working Families Flexibility Act, which would offer workers more options regarding overtime work, giving workers the chance to earn extra pay as well as accumulate paid leave for overtime work.
Lastly, lawmakers need to budget smarter.
Perhaps the most obvious way to prevent future inflation, interest rate, and tax increases is to enact changes that help lawmakers budget responsibly. One such reform would entail getting Congress to do a comprehensive budget.
Imagine trying to set your family spending plan without knowing what you’re spending or your salary for the next year. Right now, that’s basically what Congress is doing.
Lawmakers decide annual federal spending amounts through 12 separate appropriations bills that all together cover only 26% of spending. These bills say nothing about the federal revenue needed to finance federal spending, and this process often results in duplicative programs sprinkled throughout the government.
A comprehensive budget would give legislators a full and better view, so all committees could manage their programs in a smarter way.
Lawmakers also should approve the bipartisan, bicameral Prevent Government Shutdown Act, which would require Congress to stay in session until the annual budget process is complete.
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As incumbent lawmakers and challengers head out onto the campaign trail, they have a choice: double down on the Biden administration’s policies that have led to high inflation and interest rates, or recommit themselves to the principles that fuel prosperity.
Voters are waiting to see what they decide.
Akash Chougule is vice president of government affairs for Americans for Prosperity.