Congressional Budget Committee chairs Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA) are working to finalize a deal on the federal budget. Reportedly, the two are just “a few billion” away from an agreement to fund government and replace the automatic sequester cuts. The deal may also increase government revenue through higher “fees” for airline security and other government services. This idea should never get off the ground.
“That sort of thing is a user fee, it’s not a tax,” said Rep. Tom Cole (R-OK) (R-Okla.), a party to the negotiations. “It’s not something that I would have an objection to as a tax increase. But we’ll see where [Ryan and Murray] end up.”
Calling higher government revenue a “fee” rather than a “tax” is mostly a distinction without a difference. Money to pay a fee still comes from a consumer’s wallet, not some magical “fee” account.
Reportedly, Ways and Means Chairman Rep. David Camp, has briefed several Republican colleagues about the possibility of including “revenue raisers” in any budget deal. As if the federal government had a revenue problem.
According to the Congressional Budget Office, government revenue currently equals about 15% of GDP. Next year, the amount the government takes out of the economy will spike to 17.5%. Over the next two decades, the government’s take will gradually increase to equal 19.5% of the economy, higher than its historical average. Over the past 4 decades, government revenue has averaged 17.5% of the overall economy.
If anything, the government should be trimming its revenues.
Cole and other Republicans will likely defend the fee hike as necessary to cover the costs of airport security. Never mind that the federal government shouldn’t be in this business, it isn’t at clear that it needs more funds to perform this function. In the past 5 years, the TSA budget has grown 18% even while the number of passengers screened has fallen by 11%. The agency already collects more than $2 billion in fees from air travelers. It is absurd to collect even more in fees for less work.
Fortunately, any budget deal between Ryan and Sen. Murray is largely meaningless. Even if an agreement passed both chambers of Congress, it has no legal force. It is more of a set of guidelines, rather than a law, Congress can use to craft its actual appropriations.
Any increased “fees” included in a budget agreement would still have to be separately enacted into law. Still, it is disconcerting that Republicans seem to believe that the government needs additional revenue. That is certainly a change we shouldn’t have to believe in.