We have set up Trust Funds to help cover growth and costs. There is Social Security, Highway, Post Office, Military Retirement, etc. These funds collect money from use taxes and the like, with the expectation that it will be spent sometime in the future. It is setting aside money collected today to pay for a rainy day.
But Congress, in its infinite wisdom, has made the revenues collected and distributions part of the federal budget. So the money collected on the sunny days is counted as Federal Income and the money spent on rainy days is subject to political debates, every time. The Highway Trust Fund is a good example. We have gasoline taxes that go into the fund and should go to pay for highway repairs ten or twenty years down the road. If the Fund is On Budget, then some or all the monies go into the General Fund controlled by Congress and when it comes time to actually repair the bridges and roads Congress won’t provide the funds because it is not politically expedient to spend the money and increase the deficit.
Take the trust funds off-budget and the money in-out flows don’t count towards the federal budget. If the Fund actually needs an infusion of cash, then Congress can debate if it is deserved instead of debating whether to payout monies that should already be in the fund or not.
Infrastructure support. If we build infrastructure we need to expect and plan to maintain that infrastructure for the ongoing future. Highways, airports, pensions, these are all part of the infrastructure we need to maintain the society we are building. If we don’t want the building to collapse, with us in it, we need to keep it repaired and growing. Congress is not doing that.
Even cities and states should be setting up trust funds to maintain the public infrastructure of roads, sewers, water mains and public buildings. These shouldn’t be subject to debate every time a bridge collapses or water treatment plant fails.
Saving for a rainy day is an axiom that is based on common sense. It isn’t always easy to see a large nest egg being built up and not used when you have so many ‘better’ things to spend it on, but it needs to be done.
Take the Trust Funds off budget.